I don’t know much about wine except that I enjoy reds more than whites. I know that reds go with beef and the whites go with poultry and fish.
I know my limit is two glasses, a threshold which — regrettably — I have violated more than once.
That makes me a casual wine fan, and a potential customer of Destination Cellars, a Dulles-based business catering to the world’s growing fascination with wine.
“We create experiences,” said founder David Keuhner, 42, a self-described foodie with whom I share some Nationals baseball tickets.
Want to fly to Tuscany and travel from luxurious villa to villa, lunching, dining, touring and sipping from a $100 bottle of Brunello? Five days will cost you $10,000, which is what a top golfer recently paid.
How about some Chateau Lafite Rothschild 1982? Keuhner recently brokered the sale of two bottles to a Hong Kong client for $12,700, earning a $2,000 commission.
What’s also interesting is the dual career track that led to Keuhner’s wine company. His boots-on-the-ground apprenticeship started as a teenager, when his uncle, a sommelier at the historic 21 Club in New York, instilled in him a love of wine. He continued the learning experience, including the importance of customer service, running a couple of Ruth’s Chris Steak House restaurants in the Washington area.
But he also developed a knowledge of technology, jumping from startup to startup — think Open Table, the restaurant reservation Web site, or Fishbowl, a company that helps restaurants with marketing — where he developed sales skills, learned how to pitch venture capitalists and gained expertise in how to use the Internet to learn more about a restaurant’s clients.
The result is Destination Cellars, a seven-employee company that might gross $2 million this year, double its 2010 revenue and several times the $300,000 that Destination Cellars grossed in 2009. It has yet to turn a profit, and has no debt.
The company is getting noticed. Keuhner recently received a request for a meeting from Accel Partners, a top Silicon Valley venture capital firm known for savvy investments in companies such as Facebook.
Keuhner’s clients include passionate wine collectors known as oenophiles (Look it up. I did), casual fans who want to know more and know-nothings who are intimidated at the pop of a cork.
More than 3,000 customers have used his services. Clients include Doug Donatelli of First Potomac Realty Trust, MasterCard, Bain Capital, Steve Case’s Exclusive Resorts, business groups such as the Young Presidents’ Organization, Merrill Lynch and Denver-based Inspirato, a hot new vacation club.
About half of Destination’s $2 million revenue comes from the travel tours, while 40 percent comes from wine sales and 10 percent from corporate wine events. The big profits and growth come from sales, where overhead is low and volume is virtually unlimited. Wholesalers and retailers don’t like Keuhner because he brokers sales directly between the winery and customer, circumventing traditional bricks-and-mortar stores.
“If you go on one of our trips, we want you to become a trusted client,” said Keuhner, whose network of associates hold the hands of clients on the trips. “Then we start buying you wine. We become your resource, your friend, your educator and your broker to acquire wine.”
He even sells the right to buy future bottles that are still in the cask, known as wine futures.
“Think of it as purchasing a stock, pre-IPO,” he said.
Keuhner pays himself a $100,000 salary and owns more than half the company. Individual investors own the rest. They include Chad MacDonald, founder of ServiceForce USA, a Dulles-based building management company; Allen Cage of Chantilly-based AOC Solutions; and investor Justin Wender, who found Destination Cellars through a Young Presidents’ Organization online chat.
The company doesn’t spend much on marketing. Instead, Keuhner has carefully cultivated clients such as YPO and Mastercard World Elite to help expand the brand and recruit customers.
He was born and raised in Alexandria. His father, a helicopter pilot in Vietnam, survived two tours only to die from injuries in a car accident, leaving a wife and six-year-old David.
After high school, he was working at a restaurant in Alexandria when a consultant recruited him to run the Ruth’s Chris store in Crystal City, where he was earning $100,000 a year at age 23.
But he walked away when he noticed an ad in an industry publication for a job selling the restaurant paging systems that notify customers when their table is ready.
After some success, a recruiter called in the late 1990s and asked him to join Open Table, the San Francisco-based restaurant reservation site that helped bring online reservations to the restaurant industry. He learned the nascent business of online data collection, and the role it played in marketing restaurants.
He walked away from Open Table in 2001 to help a friend create Fishbowl, a marketing services company that manages databases for restaurants ranging from Red Robin to Chili’s to Dairy Queen.
“What I learned at Open Table and Fishbowl was the value and the opportunity of collecting loyal customer data,” Keuhner said. “Half of my business is built on that.”
He helped grow Fishbowl from two employees in a corner office in Alexandria to a 75-person staff with dozens of big clients ranging from The Palm to Maggiano’s Little Italy restaurants. His six-figure compensation grew and he received equity in the company.
But Keuhner needed to satisfy the urge to run his own company built around the lifestyle of good wine. He launched Destination Cellars in 2006 at his dining-room table with $250,000 in savings.
The money helped fund a five-week, $50,000 trip through Europe and the United States, where he and a well-connected sommelier cold-called important players in the wine industry, establishing relationships.
“It’s insanely hard” to crack the French wine industry, he said. “I used my past life of being at Ruth’s Chris as an entry point. Seasoned winery owners recognized that name. It got me in the door.”
It took two years to cobble together a network of winery partners that now spans 150 establishments across eight countries, which is Destination Cellars’ biggest advantage over potential competitors.
“It’s going to be hard for anyone to duplicate,” he said.
The first sale didn’t come until January 2008, when a Philadelphia physician who sat next to Keuhner on Amtrak’s Acela bought a trip to Bordeaux for $11,850.
The company is now getting requests to partner with big-name department stores and luxury travel companies. Next week, Keuhner is sending out 100,000 mailings to doctors, lawyers, financiers and investment bankers.
“I want to be a $30 million company by 2015,” he said.
I hope he makes it. Then he can still be in my baseball ticket syndicate.
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