Washington's fine wine scene is about to get a jolt. Zachys, a premier New York retailer, has come to town. With an innovative marketing strategy combining elements of direct-to-consumer sales with traditional retail, Zachys aims to change the way we buy and experience wine.
Zachys has been a wine retail fixture in Scarsdale, N.Y., for 73 years. It also conducts wine auctions in the United States and Hong Kong. Looking to expand, the third-generation family owners sensed opportunity in Washington.
"We've seen an increase in our online and phone traffic from the D.C. area, showing us there is a demand for a premium wine retailer and auction house in the market," says company president Jeff Zacharia.
The new Zachys is the first real entry into the top tier of Washington's fine wine market, an area that has remained stable for decades, led by stores such as Calvert Woodley, MacArthur Beverages and Wide World of Wines. But Zachys isn't your traditional brick-and-mortar wine store with shelves of wine on display and bargain bins or weekly specials. Rather, it's a 17,000-square-foot warehouse in an industrial area of Northeast, just off New York Avenue. Half the space is designated to store Zachys wines for sale, the other half for private storage of clients' collections. The warehouse — a former D.C. forensics lab — is refrigerated, allowing proper temperature control for wine storage. Additional space includes offices and an event room for tastings, classes and corporate meetings.
So don't expect to pop into Zachys on your way home from work to pick up a bottle or two for dinner. You'll need to make an appointment — which may be as easy as calling to say you are on your way — to drop off your collectible wines for storage, retrieve some from your personal stash or take delivery on an order. With enough notice, that order can include wines from the New York store or warehouse, meaning Zachys can leverage the wider availability of wines in New York to benefit its D.C. customers.
Wine lovers know that half the fun of shopping is ogling all the bottles in the store. But the cost of real estate and shifting market dynamics led Zachys to risk a different model: Instead of luring us into a store with displays of wine bottles, the store will try to bring the wine experience to us.
"It's too expensive to have a 3,000-square-foot retail store in downtown D.C.," says Tim O'Rourke, business development manager for the new Zachys. Washington wine lovers may remember O'Rourke from the six years he spent managing Weygandt Wines in Cleveland Park, a store of about 3,500 square feet. He is focusing on ways to expand the experience for customers, such as master classes and tastings involving winemakers from around the world.
"The younger generation is experience- and event-driven, so we want to focus on the experience of wines to expand the brand," O'Rourke said as he showed me Zachys' event space, which can hold 50 people. "The wine retail market is changing. Millennials are five to 10 years away from being some of our best customers."
So Zachys is focusing on higher-end wines, and the company believes younger wine drinkers will be receptive. Aging baby boomers, who have been collecting wines for decades, may be logical customers for sales, storage and to supply the auction pipeline, but millennials are the growth market: Young, affluent and urban, needing reliable space to store their burgeoning collections. The generational shift is driving a change in marketing strategy.
Zachys had a quiet opening in July but will celebrate its grand opening later this month with two winemaker dinners at area restaurants — one featuring wines from Burgundy's famed Domaine Leroy — and tastings at the warehouse on Sept. 21 and 22.
Events planned for late October include a wine tasting at Long View Gallery with about 50 winemakers from around the world and what O'Rourke calls the first fine wine auction to be held in Washington in more than 30 years. The auction will be Oct. 27 to 28 at Charlie Palmer Steak, featuring an estimated $4.5 million worth of wine from a single local collector's cellar, dubbed "The Capital Collection." (Zachys is not disclosing the name of the collector.)
The D.C. outpost will also host bidding parties for remote participation by video hookup in New York auctions.
The arrival of this New York competitor will be good for D.C.-area consumers, says Jay Youmans, a master of wine and founder of the Capital Wine School in the District. "Zachys entering the D.C. market will help broaden the selection and availability of fine wines, and it will continue to put pressure on existing retailers to be competitive in their pricing," Youmans says. "It will also put pressure on wholesalers."
"People here are hungry for a fine wine experience," Zacharia says, perhaps meaning "thirsty." Zachys is looking to deliver.