15/09/2026

The wine industry is navigating changing consumer behaviour, rising costs, slowing demand and growing pressure on both revenue and profitability. During a visit to Rack & Riddle, Beverage Trade Network CEO Sid Patel spoke with Jeff Tuttle, CEO of Rack & Riddle, and Mark E. Garaventa, Chief Commercial Officer and General Manager, about how leaders can remain focused, bring their teams with them, and uncover new opportunities during uncertain times.

In this conversation, Tuttle and Garaventa discuss innovation, sparkling wine, alcohol-removed products, SKU rationalisation, operational efficiency, collaboration, and the importance of understanding where the white space exists in the market.

Sid Patel: What is it taking out of you right now, these days, as a leader? Personally, how are you fighting this solo fight on one side, while on the other side there is a face that you have to show to the company?

Jeff Tuttle: There’s definitely a big change happening, right? And it’s been happening now for a few years. So, we’re to the point where people are looking for progress and for things to sort of turn around. They’re slower than we all would want.

So, in this kind of environment, we’re spending a lot of time maintaining focus and sort of keeping an eye on the vision that’s longer-term while we get through what we’ll say is a short-term set of challenges. But as long as we have our teams all focused and sort of believing in the future, we’ve found so far that people are maintaining sanity and excitement to do that.

Mark E. Garaventa: I echo what Jeff is saying. Our team is important, and communicating to the team and keeping the openness with the team as to what we’re doing and innovating during this time, looking at opportunities out in the market and then bringing them back here and working on that to deliver products that are in need in the market.

Sid Patel: Rack & Riddle is a great example of how you are always aligning with the trends. At least you have some tailwind, with the sparkling category and now the big investment in no and low. But let’s say a winery has not been able to make that pivot—perhaps a Napa Cabernet producer facing turbulent times. What would you tell them? Do you think this is going to come back, or is this the new reality?

Jeff Tuttle: Like us, I think any of the industry participants are going to need to rely on innovation. I think we’ve heard a lot of that discussion at the various industry gatherings—that innovation is key.

So, I think whether you’re in sparkling or still wine, red wine, white wine, whatever, there are things like alcohol-removed products and different packaging that are innovations that meet consumers in a new way. We’re hearing from a lot of our winery partners—and we have a lot of them—that they’re doing that. We’re playing a role for them that way.

Mark E. Garaventa: I think what it is for the still-wine wineries is obviously, like you mentioned, the innovation piece, but also catering to the new generation—Gen Z and Millennials. They’re up-and-coming. They are going to be the customers of the future, and how are wineries addressing that within their own business?

Sid Patel: On innovation, one of the questions is how much to invest and how long to wait to see results. One thing I personally challenge myself on is whether we should change the domain—go into food, CPG, or something beyond wine. Has that question come to you?

Jeff Tuttle: Frankly, no. We’re very satisfied with the focus we have on sparkling. We’ll do some still-wine things and bottle for people, but the big growth driver for us is sparkling, and there’s so much opportunity there for us and really for all of our partners.

We have plenty to do to achieve our goals, and consumers are agreeing with that, whether it’s simply doing more sparkling at some of these wineries or doing different sparkling things like alcohol-removed products or our CalSecco product, which goes after a California version of Prosecco. Those kinds of things—sparkling will be where we can focus to achieve our goals.

Sid Patel: Mark, are you worried about the alcohol category continuing to decline overall?

Mark E. Garaventa: All businesses go through peaks and valleys, and the wine industry has certainly been in a valley for the last couple of years. I think we’re going to come out of this. I think it’s going to be a different landscape than it has been in the past, but I think there’s still plenty of opportunity.

As Jeff mentioned, we’re doing CalSecco. We’re doing flavoured products, and not just sweet flavoured products—mildly flavoured products. The wine industry needs to continue to innovate beyond its standard Cabernet, Chardonnay, or sparkling wine, and I think those that are doing that are seeing the wins.

I don’t think we’re going to venture into anything necessarily outside wine. Obviously, we are in alcohol-removed and low-alcohol products, but what we do will continue to be wine-based products.

Sid Patel: Right now, you have to meet profit targets. On one side, there is top-line pressure because the consumer is not there for many wineries. Then there is bottom-line pressure, which can involve becoming leaner, job cuts, or optimisation. That may make employees feel that the ray of light is not there because you are just optimising for profit. How do you balance that?

Jeff Tuttle: Hopefully this isn’t too obvious, but the top line and the bottom line go hand in hand. Top line is very critical for us. We want to make sure that we’re maintaining and increasing growth. But to do that, we’ve got to have a cost structure that supports investment and eventually delivers the long-term profitability that comes from that top-line growth and diversification.

So, we’ll do both. We’ll focus on the top line, but we’ll invest our cost savings to drive that. That means you have to get more efficient. You have to do things such as consolidating some of your activities, being more efficient in the plants, and doing more with a little less. But that’s an opportunity for everybody if you do it right.

Sid Patel: Let’s go a little deeper. What have you stopped doing or cut down, and what are you focusing on more?

Mark E. Garaventa: I think during these times all organisations start to focus on the operational inefficiencies in their business, and that’s what we’re doing. We’re looking at the operations and the efficiencies within the operations. Are we doing all the right things and cutting out the excess?

We’re looking from top to bottom, from an operational standpoint, at those efficiencies and where we can get better at what we’re doing. With products, what is our cost structure? Do we have the right structure?

Sid Patel: Have you cut down some categories or products because you do not think they are the future?

Mark E. Garaventa: SKU rationalisation is something I think all businesses need to take a look at on an annual basis. We certainly have done that to become more efficient—not producing products where we don’t do the volume, that cost more and have a greater cost structure.

We have done that, but from a personnel standpoint, we’ve maintained our staff. We have very good, efficient people, so we’re not looking at any cost savings from that standpoint.

Sid Patel: When things are not working out, it can be demotivating every month and every quarter. At one point, you may doubt yourself as a leader and wonder whether you are justifying your team or whether they have stopped believing in you. How do you regain that self-belief and confidence when the metrics have been falling quarter after quarter—not because of your fault, but because the whole industry is going down?

Jeff Tuttle: Probably one of the main things is to be more present with your leadership—my own leadership, but also with the leadership that’s around me.

I get a lot of renewed energy and confidence, frankly, from hearing from our teams what they think we should be doing and then involving them in the process of problem-solving, understanding the threats and coming up with ways to address those.

Whether you’re leading a function or everything, you’re relying on everybody. To the extent that you can double down on that, really get involved with everybody, be present every day, get the feedback, and make the communication flow even more consistently, it’s going to help my confidence and help my knowledge that we’re doing what we’ve got to do.

Then I can feed that back to everybody and say, “Here’s what I’ve learned. Here’s what we need to be doing.” At the end of all that, stay focused.

Sid Patel: If you don’t mind sharing, are you growing right now, or has it been a flat year?

Mark E. Garaventa: We’ve been growing. We started a custom-brands division a couple of years ago, and we’re seeing success on the custom-brands side.

The winery side of the business is tough, like it is for everybody. Small tasting rooms are struggling and not seeing the visitation they’ve seen in the past. Costs are rising for visitors going to these various areas, whether it’s lunches, dinners, or staying over. But we’re continuing to grow as a company.

I think all companies need to take a look within the wine platform and ask: Where is the white space, and are we executing in that area? The nice thing about Rack & Riddle is that we’re diversified. We do contract bottling.

Sid Patel: By white space, you mean where the opportunity is. How do you analyse that?

Mark E. Garaventa: On the commercial side, we evaluate our grocery partners and do an evaluation of what’s on their shelves, what price points they have, and what products they have. What innovation can we bring to the table—alcohol-removed or low-alcohol products, flavoured products? CalSecco is an example. That’s becoming a nice growth area for us and getting some attention.

It’s constantly looking at your business and seeing where we can grow. Where can we grow incrementally, or where do we have a large opportunity?

Jeff Tuttle: To double down on that, the business we’re in is a partnership, B2B business. In some ways, we have the added advantage of having a large village of customers who can tell us what they’re seeing.

We owe it to them to hear their feedback on what they think is going to drive their business and then be there to support that, while also balancing our own expertise and knowledge of trends to collaborate with them and come up with good growth solutions.

Sid Patel: Based on your experience, are there three or four things other wineries should start focusing on to find white space within their own capabilities?

Mark E. Garaventa: We’re not a winery in the traditional sense that a tasting-room winery is, so that’s not our knowledge and expertise per se. We try to be the experts in the products we bring to the market.

In the sparkling-wine category and the best of all things sparkling, we know the space, we know it well, we know the price points, and we know the data. We become the experts for our clients to talk about what white space they may have, whether it be in their tasting room or on the commercial side themselves.

That’s what we try to bring to the table for our customers: that expertise and knowledge in the sparkling space, whether it’s an inline-carbonation product in a can, the Charmat process and utilising CalSecco and the meaning and reasoning behind it, or the traditional méthode champenoise side and the quality of the various products and where a customer may see the greatest success.

If we can come to them, teach them the why, and help them figure out what product they should have in their line-up, they then trust us. If we get the trust of those customers, hopefully they then have success and can execute on their side.

Sid Patel: Imagine you were both hired by another winery and were responsible for its pivot and growth. It is a Napa or Sonoma winery facing serious headwinds and continuous decline in the US, with exports under pressure as well. How would you audit it? What would you do, given that a pivot also requires capital investment that the winery may not be able to afford? How do you turn that ship?

Jeff Tuttle: I would probably resort to the tried-and-true SWOT approach: strengths, weaknesses, opportunities, and threats. Get the team to think broadly and creatively about what we do best and what we don’t do so well. Focus on our strengths, understand where the key threats are that you’re going to have to deal with, and then go after those top opportunities.

That’s a pretty vanilla-sounding answer, but you’ve got to start with that. There is always a growth opportunity. I know the big numbers look bad in the wine industry, but Sauvignon Blanc is doing well, sparkling is doing well, and there are nuggets of growth in the red-wine area.

If you’re in that still-wine area, let’s go and find what those are and start to focus on those. Those are the opportunities. If you have a strength in developing some premium things, let’s go after a premium version of those. If you’re more of a value player, double down on those things.

Focus in. Stop doing the things that are getting you nowhere. I think that’s how I’d start the day and jump-start growth.

Mark E. Garaventa: I think collaboration with your team is important. Your team is in it every day—certainly the people on the streets, but also people throughout your organisation. You’ve got to collaborate together. Some of them may have ideas or thoughts, or be in the tasting room hearing what consumers are asking for.

As Jeff said, use the SWOT approach to evaluate your entire organisation. It’s got to be a team effort, not an individual effort, in order to be successful. We may think one way, but our team thinks another way. You’ve got to be on the same page and in concert with your team, driving that additional growth during difficult times.

Sid Patel: Why would you want so much friction in a category that is becoming harder and harder? Wouldn’t it make sense to stop producing Napa Cabernet completely, use a third party, and start a sparkling SKU? It will take a lot of effort, time, and money to earn the same return from the existing category.

Jeff Tuttle: Don’t get me wrong. Don’t keep doing what isn’t going to work in the future. You’re going to have to do the research and get uncomfortably real with yourself about what may have been a core product for you. If it is no longer going to be sustainable, get out of it sooner rather than later.

But you can’t jump to that conclusion in these uncertain times, which still have to shake out, particularly if your business is, let’s say, all about Cabernet. If you’re going to go away from Cabernet, that’s an identity shift in the business in total, and you have to think long and hard about that.

I’m saying there are probably nuggets of growth even within that deliverable—a small shift that is going to create the growth opportunity.

Mark E. Garaventa: Rebranding is always very difficult because you’re turning your company on a dime and changing who you were to become something else. It can be successful, but it could be catastrophic as well.

I think strategically looking at your SKUs, talking about SKU rationalisation and saying what’s working and what’s not working, and then going to that white space: What can work? What’s working for other wineries? I think it’s always good to collaborate with your competition and other wineries to have success together.

But to completely rebrand and change what you do—if you’re a small winery, you have a customer base that’s accustomed to you doing it one way. If you change that completely and say, “We’re outsourcing everything now, and we’re not doing anything internally,” what does that do to the story you’ve been telling those customers who have been your good customers for so long?

I understand looking at cost reduction. If we’re crushing in-house instead of outsourcing the crush and bringing it in, or if we’re doing bottling and that’s costing us more than the value of bottling in-house, maybe we look at outsourcing. That’s where you look at your operations.

A small winery is different from an operation like us. With a facility that can do 3.5 million cases and has as many bottling lines as we have, this is what we do. We’re a custom-wine-service business. Our challenges are slightly different from the challenges of a small winery.

Sid Patel: When you see news from big companies such as Constellation, Pernod Ricard, or Gallo, it can be scary to see where the industry is going. When Gallo thinks it is moving into the wider beverage industry, like Coca-Cola, it signals that something is happening. Do you pay attention to these cues or get affected by what is happening among the world’s largest companies?

Jeff Tuttle: Remember that many of them are our customers. We are there for them, and we learn from them in terms of the things that we do now.

We do some of that, but we know our business, and we know the marketplace quite well. We do a lot of trend analysis, and we’re all obviously capable, experienced executives. We’re going to take the information that’s all around us, consolidate and summarise it, and then take our plan that’s currently in action and make sure that we’ve considered everything, given some of the new information you’re talking about.

It’s all about having a plan that we all believe in and have confidence in, but being willing to pivot with new information. Be patient and considerate. Don’t be too short-term in your thinking when it comes to some of that pivoting. But certainly, every plan is subject to some pivoting, particularly in an uncertain environment like the one we’re in.

Mark E. Garaventa: I think all wineries at this time—but large wineries especially—are chasing the consumer and the latest trend. That can be a short-term play or a long-term play.

One thing you’re seeing with all the majors is that sparkling wine is the category they all need to be in. Gallo has had tremendous success with La Marca. Prosecco is a 13-million-case import into the United States. There are very few major producers that do not have a sparkling wine in their line-up.

We’re seeing trends of those large wineries coming to us or innovating themselves and coming out with a sparkling wine to grab part of that category. Sparkling wine is the third-largest varietal being consumed today.

If you take a look at the 13 million cases of Prosecco coming in, that’s an opportunity. It’s an opportunity for domestic supply and California wineries—CalSecco—to go after that business, get a piece of it, and keep it here domestically.

If you look at still wine and sparkling wine, domestic still wines are larger than imported wines. On the sparkling side, that’s not the case, and we need to turn that tide.

You’re seeing Gallo, as you mentioned, lean into Prosecco. They are 10% of the growth of that category, or 10% of that sparkling category. If you want to ask whether we look at the trends of the large companies, take a look at Gallo with sparkling wine. Other wineries need to follow suit as well because it’s white space for them. It’s an opportunity for them.

Where are you going to grow revenue? On the still-wine side, it might be challenging. That is the white space we talk about. Whether it’s an RTD, sparkling, or a non-alcoholic product, where can we have success?

Sid Patel: What do you mean when you say the wine industry is going through a seismic shift? Do you mean reducing vineyards?

Jeff Tuttle: That’s an outcome from the seismic shift, but I would go back to the consumer behaviours that are happening. There’s a reduction in alcohol consumption and a perception of alcohol consumption that’s affecting consumer behaviour.

There’s a dynamic around different demographics and how they will treat beverage consumption, particularly alcoholic-beverage consumption. A bottle of wine sitting on the table and being served with your friends is happening less often, or is less prevalent, than sessionable consumption of beverages, whether it’s beer or RTDs. Wine is starting to see that as well.

If you look at those consumer-behaviour changes, that is where this wine business is starting to shift. I’ll point to the two I just mentioned. One is alcohol consumption. You’ve got the opportunity for all the wine purveyors and sparkling purveyors to address that change with alcohol-removed or reduced-alcohol products. That’s slowly but surely happening with better and better products and more innovation.

The other is sessionability and having smaller-format products. I’d say it’s just now starting to happen as everybody is seeing that innovation is going to be what helps them get through this tough, uncertain time.

Mark E. Garaventa: The wine industry hasn’t been faced with a change like this in years and years and years. The Boomers were the big wine drinkers. The younger generation that has come up has more opportunities to select from—whether it’s an alcoholic or a non-alcoholic beverage—than there have ever been. It has flooded the market.

Generationally, they’re kind of the “me too.” It’s about me and what I want. I want it now, I want something different, and now I’m off to the next thing. If you look at social media and where it started with Myspace, then Snapchat, and where it is today, they keep jumping. They’re very fickle and constantly want to try something different.

That’s one of the challenges for the wine space: How do we create a wine-based product for that generation that they’re going to enjoy? On the flip side, you’ve got XXL, which is 17% to 18% alcohol, and that has had very good success.

I think trends are going to come in and out more quickly. We’re getting away from the traditional Cabernet, Pinot Noir, Sauvignon Blanc, and so on. We’re seeing a shift in reds going into whites, where Sauvignon Blanc and Pinot Grigio are growing, and Chardonnay is not declining quite as much as Cabernet.

Chardonnay used to be the largest category, with Cabernet right behind it. Now it’s a very tight bandwidth. It’s about paying attention to those trends.

This interview was conducted by Sid Patel for Inside the Drinks Business, a Beverage Trade Network series. CEO of the International Bulk Wine and Spirits Show

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