May we introduce ...

Each month, LuxeSF.com profiles a member of The Luxury Marketing Council. This month we talk with Hal Oates, Co-Founder and President of Porthos, an on-line wine purveyor offering "insider" connections to the finest hard-to-find and small production, "boutique" wines not normally available in regular retail stores. Porthos is committed to providing "insider" information about the best new up-and-coming wines before they are discovered by the wine critics and collector crowds!

LUXESF: Tell us about Porthos.

OATES: Porthos is a personal wine shopper service. We do two things. We provide insider access to the big names from Napa that everyone is looking for, plus the inside scoop on the up-and-coming big names of tomorrow.

LUXESF: What do you mean by a personal shopper service?

OATES: Personal shopper service means we learn about our clients' individual tastes and then recommend specific wines to fit those tastes. Many of our competitors tend to pontificate about highly-rated wines or a great deal, or a bargain wine ... this sort of thing. The fact is none of that really matters on a Friday night when you're sitting at the table with friends drinking wine. If you don't like the wine, you don't care what the rating is or what the price is. You want to enjoy your wine. So we base all of our recommendations on each client's personal tastes with the goal of creating long-term relationships with these thirsty folks!

LUXESF: Do you have retail locations? How does it work?

OATES: We're a non-traditional business in that we operate exclusively via our website. We do take telephone calls and faxes, but primarily it's creating a database and a wine inventory to match individuals' tastes with the best wines of each vintage from California . It's really a fun business. We taste about 5,000 wines a year and end up recommending less than 1% of those wines to our audience. The fun part is to figure out what each client (or targeted client group) is looking for and then making sure we get them exactly those types of wines -- new names they've never heard of, undiscovered ones that are a great value because the critics and the magazines haven't over-hyped them yet ... as well as some of the big names in 'worthy' vintages.

LUXESF: How do I find Porthos if I'm a consumer?

OATES: Partnering with a few like minded companies plus purchasing Google Keywords has been our primary customer acquisition source. If you put a key word in for one of the big "name" wines, chances are you're going to see Porthos.com right there at the top.

LUXESF: Now, you're Napa only?

OATES: We feature California 's finest wines from all over. We sell mainly Napa wine, a lot of Sonoma wine, but we also have a fair representation from central coast, from Santa Barbara. We've sold a lot of the Santa Barbara pinot noir after the "Sideways" hysteria, a little bit of wine from Monterey county. It's funny how many American wine collectors associate the "California Wine Country" as exclusively Napa .

LUXESF: So, I've found you. I've logged on. I've placed an order. What happens to me from that point on?

OATES: Well, hopefully you get the finest personalized service in the wine industry. We'll immediately tell you when you're package is going to ship, and then we also -- depending on what type of wine you order -- will send personalized recommendations based upon those purchases. For example, Cakebread chardonnay -- everyone loves Cakebread chardonnay. It's one of the national leading sellers among the collector level chardonnays. So, we'll email you back and say, "Thank you for your order of Cakebread chardonnay. If you like Cakebread chardonnay, you ought to try these other three chardonnays. They're small-production, boutique-type wines that are hand-crafted." And that's how we gained a loyal audience.

LUXESF: So, as a consumer I'm getting something proactive from you on a regular basis.

OATES: Absolutely, and it's tailored toward your taste. We give you special treatment. Wine is a funny category. Wine people complain that it's confusing and a little bit mysterious, and I guess it is when you first get into it with all the crazy labels and the different price points. So we try to take the mystery out, but also make it really-user friendly for you because again, ultimately, all you want is wine that you believe is sensational tasting.

LUXESF: Is there a particular price point you try to stay within?

OATES: Well, because we're working primarily with serious collectors, our average bottle price is about $35. We sell bottles from $20 to $200 ...

LUXESF: The idea for Porthos -- where did come it from?

OATES: I was in the wine country with my business partners one really thirsty day and we started dreaming: "How in the world could we ever make a living at this?" Admittedly, not exactly the most noble cause, but that was the impetus for it. I've got a consumer marketing background. I spent 10 years doing advertising and research for PepsiCo, and I realized that I was ready to get into a different type of beverage and one that had the opportunity for some improved marketing. In the wine world there are a few of the big companies doing OK marketing with OK wines, but no one has ever done great marketing for great wines. So our goal is to do great consumer marketing for great tasting wines.

LUXESF: What's the point of difference for Porthos? How do you try to establish your point of separation?

OATES: Our point of separation is pretty clear in that all of our competitors try to compete on the cheapest price or say they've got the rarest wines, and on any given day neither one of those is true. We don't try to compete with either one of those claims. We compete on the best personalized service.

LUXESF: The finest selection, presumably.

OATES: We have a very fine selection, and we offer very fine pricing. But, again, the difference-maker and what separates us from our competition is the personalized service.

LUXESF: Meaning what? If I come to you, you'll respond fast or conversely you'll come to me.

OATES: I'll come to you and I'll tell you what you like. You might think you only like Silver Oak cabernet, but I'm going to tell you about the vineyard next door to Silver Oak that sells for less money, or I'm going to tell you what the Screaming Eagle wine maker is bottling in her spare time. It's getting the inside scoop from Napa that you're not going to find from your local wine shop.

LUXESF: By the way, with 15 years at PepsiCo, presumably your palate is shot by now. I'm being facetious, but how have you developed your palate? Who does the selection within the company and how?

OATES: The majority of the selecting -- the final decision-making -- falls on my head (or palate) I guess. I've got my business partners and a team that we taste with. I've got a group of different tasting panels -- friends of mine, work colleagues -- that will taste wines on a regular basis, but ultimately I make the selection decisions.

LUXESF: How can I trust you?

OATES: I've got a pretty good track record of picking big crowd-pleasers that appeal to the national palates – the collector palates across America .

LUXESF: And that palate is what right now?

OATES: Big, bold fruit-forward wines that taste great now but have just enough tannic structure to age well.

LUXESF: High quality cabs?

OATES: Primarily cabernets, a lot of chardonnays, with zinfandel gaining rapidly in popularity. Pinot noirs are certainly more popular than they were before "Sideways."

LUXESF: Give me the profile of an average customer. If we were to attempt to profile that person, what would he/she look like?

OATES: It's probably a time-starved man between age 45 and 65 who knows a little bit about wine but is dying to look smart and learn more about wine. He really doesn't have the time, so he gets into partnership with us, and we make him look like a savvy shopper. He's building his cellar or maybe just starting in a closet. We're helping him acquire some of the big names to impress his neighbors but also introducing him to some really special smaller production wines. So he's thrilled to be the first on his block to offer these undiscovered wines to his snobby collector friends.

LUXESF: Is he buying because he intrinsically loves wine, or is he buying because of the ego component, or all of the above?

OATES: It's a funny thing. Wine collecting for a man is a little bit like collecting Hot Wheels cars when you were a little boy. So your best friend comes over and you show him your new Hot Wheels car collection. Collecting wine is very similar. Except here, wine is consumable.

LUXESF: How are you promoting right now?

OATES: We use Google Adwords. We're establishing strategic partnerships with like-minded companies, and so we work with different newsletter services that have a broader audience. We've got some clever new ideas we're working on, including Apple iTunes Podcasting. We'll be the first wine company to develop that idea and promote wine in a unique way to a thirsty audience.

LUXESF: Getting back to selection, how do you find the needle in the haystack?

OATES: We discover new wines at industry events; through friends of friends; wine makers will send us their wines; we do work with a few wine distributors. But, again, the sourcing comes from word-of-mouth primarily. For example, in the case of a winery we work with, their wine-maker will send us their personal label wine, or one of their winemaker's friends will send us some wine.

LUXESF: Right now we're sitting under a tree at a winery called Ladera. How did you find Ladera? How did they find you?

OATES: Ladera was funny. That's another way we discover a wine. Originally, one of our clients asked us to source this wine. I had never tasted it at the time, so I talked to the winery and since they are a family run business the owners' daughter came to our office to sample a few bottles. Ever since then we've had a really good strategic partnership with them because they make tremendous quality wine, but are still relatively undiscovered.

LUXESF: Your most surprising find?

OATES: Oh, the most infamous story I can claim a little bit of credit for is Paloma Merlot. Paloma Merlot made some great wines in the late '90s. We started selling their '99 vintage, which was good -- really good. Their 2000 vintage wasn't great. It's a spring mountain merlot, and spring mountain in the rough vintages has produced some pretty rough wines. However, 2001 was an exemplary vintage in Napa , and the first time we tasted the 2001 Paloma Merlot, my team and I agreed, "Wow, this is a really special wine." We served that at a client event that night and sold a lot of wine. About a month later, the Wine Spectator gave it the highest rating of any California merlot to that date, and then a month after that they rated it the #1 Wine in the World for that year. Needless to say, the bottles of Paloma Merlot we were selling back in October for around $43 were a lot more valuable by the end of the year when they got the fancy awards.

LUXESF: Within the Porthos portfolio that you're showing right now, what are you recommending? What's the buy of the week?

OATES: The buy of the week comes from where we are sitting now -- Ladera. They've produce a $38 Napa cabernet blend. It's the finest, deep, dark rich, smooth cabernet under $50 sold in Napa right now. The hardest thing to find is a bargain Napa cabernet these days, and this Ladera Napa cabernet 2003 vintage is the best I've ever found.

LUXESF: Tell us how people can get in contact with Porthos.

OATES: The best thing is to log onto our website -- www.porthos.com -- or just give us a call. We're at toll-free 1-866- porthos.

LUXESF: The Luxury Marketing Council ... why did you join?

OATES: We joined first of all because we admire what The Luxury Marketing Council is doing. It's a no-nonsense organization really dedicated to finding like-minded companies that are shooting for the similar audience and creative ways to reach that audience in a way that's going to be effective and help us build our business. So we're excited about the partnerships that we've already established with other members and we look forward to a long future with the Council.

LUXESF: Where does Porthos go? What does it look like 10 years down the road?

OATES: The business is already changing. We're already changing the way Americans buy wine, and that makes me really happy. Traditionally, Americans buy wine through their local wine shop or through a restaurant, but through the internet we're allowing people all over the country to have access to the finest small-production wines in California that they'd never hear about otherwise. Plus, we're helping our "boutique" winery partners build a national following. Porthos is slowly changing an important niche within the wine world and educating folks so they make smart decisions. Our clients don't just go with the big names, but they fill their cellars with a variety of wines they're going to enjoy five to ten years down the line.

LUXESF: There are a lot of wine clubs out there, online and offline. What do you hope will cut you out of the herd?

OATES: There's a lot of baggage associated with wine clubs. Many of our subscribers have been members of a winery wine club where they got tired of that wine and they kept getting the same old bottles, or people who were members of a retailer's wine club, and the retailer was just pushing out-of-stock bottles or the old bottles that he couldn't get rid of in his day-to-day sales. For us it's a different process. We get to cherry-pick from among the finest wines. We send out an all-star selection to our club members, and people recognize that. We've got the highest loyalty ratings among any of our contemporaries, exceeding 95%. The only people who ever cancel their club membership send us nice notes and say, "We're sorry, we're pregnant this year and we'll start up next year."