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Adaptability: Peter Byck

Author: Judith M. Wilson
June, 2014 Issue

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“Enjoying success requires the ability to adapt. Only by being open to change will you have a true opportunity to get the most from your talent.” —Nolan Ryan

 

Having a great idea is one thing. Successfully putting it into action is something else entirely. But Peter Byck of Kentfield appears to have mastered the art, with a track record of achievements and two thriving companies to prove it. He’s cofounder, president and CEO of Winery Exchange, a Novato business that develops, markets and sells exclusive, custom wine, beer and spirits brands for major retailers in the United States and abroad. He’s also president/CEO of TradePulse, a cloud-based business he cofounded to capitalize on technology and provide information solutions for the beverage industry.
 
Born in Germany to a Dutch nurse and an American physician, Byck spent his earliest years in Europe (his first language is Dutch). While he was still very young (1965), his parents, Walter and the late Marijke Byck-Hoenselaars, moved the family to Sonoma County. His parents eventually purchased Paradise Ranch in Santa Rosa as a place to raise their five children and, later, they planted vineyards. After Dr. Byck retired, they started a winery, Paradise Ridge Byck Family Winery, and opened a tasting room and art gallery in Kenwood.
 
Growing up in Wine Country had its effect. “I love the wine business,” says Byck, but even so, he took a different path after graduating from Cardinal Newman High School in Santa Rosa. He attended UC Davis, which is noted for its viticulture and enology programs, but studied computer science and mathematics, then headed east to the Wharton School at the University of Pennsylvania, where he earned an MBA. He always returned to wine though, finding ways to apply his education and skills in new ways. “I started writing winery software right when I graduated from Davis,” says Byck, who today sits on the executive leadership board of the university’s department of viticulture and enology. That mix of skills helped set the stage for the next step in his fledgling career.
 
With an MBA in hand and a Wine Country background, Byck took a position as a management consultant to the wine industry in Australia, which was ready for innovation. “We did the largest wine strategy ever done,” he says, explaining that the approach was to look at the favorable economics of growing winegrapes in Australia versus California and to target international markets with excellent quality Australian wines.
 
He was a management consultant to the company that became Southcorp Wine, and he suggested it focus on white wine, which was more profitable because the inventory turned more quickly, and also encouraged the planting of thousands of acres of grapes, which led to the Australian wine boom. “There was an abundance of growing land; growing conditions were very favorable in Australia,” he says. “They didn’t export very much at the time.” It was an approach that worked well, but, in retrospect, he suspects the strategy might have been too successful, because, he observes, in the last 10 years, Australia has produced an oversupply of grapes.
 
After his stint in Australia, Byck returned to California and took a position as president and CEO of Applied Scanning, which used cameras, lasers and real-time software to calculate the most valuable way to cut logs. When Byck sold Applied Scanning and married Dawn Valler, the couple took a year-long honeymoon around the world. When they returned from the trip, Byck took a position as vice president of strategy and business development at Golden State Vintners, where he helped the company launch a $70 million IPO.
 
Then the concept for Winery Exchange and the opportunity to launch his own business entered the picture and, excited about the possibilities, he took the leap and quit his job, sharing the news with Dawn on the day she was due to give birth to their second child, Janneke Byck.
 

Evolution of an idea

Winery Exchange started small, with Byck and his two cofounders, John Crean and Phil Hurst. “We started with nothing more than a PowerPoint, created in one of the bedrooms of my house,” says Byck. It was 1999, the peak of the dot-com era, and “It was the boom of business-to-business exchanges,” says Byck. He explains that predictions at the time said online businesses were going to change industries, and he and his cofounders had a novel idea for using the Internet to trade bulk wine, grapes and winery supplies by putting all the transactions online and matching buyers and sellers. “We raised a large amount of venture capital to go after this business,” he says.
 
A couple of years in, though, the business wasn’t getting the results they anticipated, so they decided to pivot into a new direction. “That model didn’t work. We quickly determined that and had a few rounds of layoffs to conserve our capital, then we refocused the business on retailer-exclusive brands,” he says, adding that they had a solid sourcing infrastructure, so they retained it as the basis for putting together innovative and high-quality wine brands exclusive to retailers. From there, the company grew. “Oftentimes, where you start off isn’t where you end up,” says Byck, who believes one of the keys to success is the ability to adapt and change as circumstances demand and opportunities present themselves.
 
After overcoming its initial growing pains and changing direction, Winery Exchange started to blossom. Albertson’s became its biggest customer, eventually accounting for 50 percent of the business, but as successful as the company was, Byck spotted a weakness. “I realized we were too concentrated with one customer, so we needed to diversify. We moved into spirits and beer and moved internationally,” he says. “Then we grew by being sophisticated in terms of how we leverage insights, data and technology to identify opportunities and run our businesses efficiently.”
 
It was a shrewd move. Today, Winery Exchange is established in 22 countries on five continents, ships its products to retailers in North America, Europe, Asia and Australia—and is flourishing. It even came through the recession unscathed. In contrast to hard times elsewhere, “Sales increased,” says Byck, explaining that the company’s high-quality products are very well priced. “We’re totally focused on meeting the needs of our customers and consumers, and we’re committed to quality in everything we do.”
 
Now the only cofounder remaining in the day-to-day operations of Winery Exchange, he’s continually seeking to make the company better. “I like to innovate and continue to improve the business to make it great,” he says.
 
With a global reach, Winery Exchange continues to blend custom wines for private labels, counting Kroger (the largest grocery chain in the United States), Whole Foods, World Market, Costco, Sainsbury and Tesco (one of the largest supermarket chains in the United Kingdom) among its retail clients. “We source wine locally from all the major wine-producing countries. We’re constantly tasting wines, trying to get good value,” he says, adding that the company employs seven full-time winemakers to create high-quality blends. “We taste more wines than any other company in the world,” he says, explaining that they look for good wines, then blend them together to beat the benchmark products' quality at a more competitive price.
 
Essentially, the company customizes a product for a client by developing a unique and exclusive product that delivers value to its customers, bottling it and getting it ready for the marketplace. “We have a full marketing and creative team in-house that comes up with the names and designs,” he says. After managing production, the company distributes products for its retail clients (using distributors in the three-tier system). Adds Byck, “Once we launch the brands, we provide continual brand management so the brands can grow and thrive.”
 

Onward and upward

The company continues to evolve, and Byck is leading its expansion into new areas. “We’re starting to vertically integrate,” he says, explaining that, as well as sourcing wines globally to make blends for its private labels, the company purchases thousands and thousands of tons of grapes from all over California, which it processes in its facilities in Sonoma and Lodi. It’s also acquired a bottling plant in the town of Sonoma.
 
In addition, “We’ve recently moved into acquiring national brands with a focus on those that are truly unique for consumers,” he says, naming Echelon Vineyards, which Winery Exchange purchased from Diageo Chateau & Estate Wines, a British multinational alcoholic beverage company; Chronic Cellars in San Luis Obispo, a brand with striking graphics, high-quality wine and catchy names that appeal to millennial consumers; Orleans Hill and Our Daily Red, the leading USDA-certified organic and sulfite-free wines, which are also gluten-free and vegan-friendly. “It’s a very clean wine, unlike most modern wines, which contain preservatives,” he says.
 
Although wine is predominant, Winery Exchange’s product line includes spirits, such as Scotch and vodka, which it sources from the best suppliers around the world, and Latin and Dutch beers, as well as domestic and craft brews. It also develops and sources its own beer brands. “We think there’s big opportunity in craft beer, which is now more than 15 percent of U.S. beer sales and growing by double digits,” says Byck, and he believes cider is going to gain in popularity as well. “We see that trend, and now we’re jumping on it,” he says.
 
To spot the next big thing, “We look at market trends,” he explains. “We’re very sophisticated, in terms of how we leverage scan-data, market information and insights.” But instinct and intuition play a role as well, he adds, and sometimes it goes beyond a number on a spreadsheet. Flasq wines, for example, which Winery Exchange produces in partnership with J T Wines, is in step with America’s growing environmental commitment and come in stylish aluminum half-bottles that are easy to chill and completely recyclable. It’s a venture that’s in keeping with Byck’s business philosophy of offering unique products. “As a company, we’re not afraid to try things to see if they work. If it doesn’t work, you can go in another direction,” he says. “The key piece is to test what you’re trying and not put too much capital at risk.”
 
He puts the same beliefs and skill set to work as CEO and president of TradePulse, which he cofounded more that 10 years ago, anticipating cloud-based information storage and sharing with a system to help wineries and distributors manage their supply chains. “It’s the leading cloud-based information system for the wine and spirits industry,” he says, adding that, because it’s been hosting solutions for more than 10 years, TradePulse has more mature offerings than its competitors, which are just recently moving to the cloud. “We continue to grow,” he says. “Cloud-based solutions are the future and a very big opportunity in the beverage alcohol industry. Our strategic products include the founding solutions of depletions data collection and business intelligence, for which TradePulse is well known.
 
“Several years ago, we leveraged our domain expertise in beverage alcohol to build and launch a pricing management solution that’s been very well received. Now that suppliers and distributors have their pricing data in one place, our initial group of customers has been able to understand its margins in a way that was near impossible using legacy tools like Excel. We believe the pricing space lends itself well to a cloud-based solution, and we’re well positioned to solve the pricing problem in the beverage alcohol vertical.”
 

People first

Byck attributes much of his success to his willingness to keep an open mind. “I think it’s being open to new ideas,” he says, but equally important is hiring the right people. “You always try to surround yourself with people who are better than you. It’s all about the team working together,” he says.
 
“The culture is important,” he adds, and he encourages social activities to build camaraderie, create enthusiasm and make people feel they’re part of something special. Among the company’s many outings, they go bowling, have picnics at Angel Island and attend baseball games together. They also have a craft beer-making competition, in which teams come up with creative labels and have a taste-off.
 
Employees also do community service, either as a group or individually, in which case they get paid days off to volunteer. “We work a lot with Marin Food Bank and Homeward Bound,” says Byck. “Giving back to the community is a critical part of building a great company.”
 
To create a strong business and be an effective leader, “You need to be self-confident; you have to be determined,” he says, and being honest and a direct communicator are important as well. “It’s a lot of hard work, but if you succeed, the rewards are great,” he observes.
 
In reflecting on Winery Exchange, he says, “I feel like there’s still a long way to go. My goal is to build a great company that makes great products for consumers at incredible prices.” With his vision, keen business sense and the confidence to adapt and change when circumstances demand it, the company appears to be on track to do just that.
 
As gratifying as his business success is, though, it’s family—he and his wife have four children, ages 16, 14, 13 and 9—that gives Byck the most satisfaction. “My greatest accomplishment is raising a great family,” he says. “I like to live life to the fullest. I like to have fun, but I also want to make a difference. I want to be a great father.”
 
Family values, community connections and vision, combined with sharply honed business skills and the ability to capitalize on new opportunities are Peter Byck’s formula for success.
 

Awards

Peter Byck is proud of the Winery Exchange’s awards. Among its milestones, Whole Foods Market named the company Outstanding Wine Supplier at Supplier Awards in 2013.
 
Other awards include:
 
• A Double Gold Medal at the 2012 San Francisco Chronicle Wine Competition for Arrow Creek Pinot Grigio
 
• Best of Class for Espuela del Gaucho Torrontes at the Jerry D. Mead’s New World International Wine Competition 2012
 
• Best U.S. Zinfandel under $20 for Zinopolis Zinfandel at the World Value Wine Competition 2012
 
• Gold medal at the World Beer Championship 2013 for Double Take Amber Ale
 
• Best in Show for Metolius IPA at PL Buyer Magazine Packaging Awards 2013
 
• A spot on the list of Top 20 Brewers in 2011 for Winery Exchange/World Brews
 
• Best Vodka for Veris Vodka at the Los Angeles International Spirits Competition 2012
 
• A rating of 92 points for Noble Motif Vodka in the 2011 International Review of Spirits, putting it in the Exceptional category
 
• Best Vodka for Esmé Vodka at the Los Angeles International Spirits Competition in 2010
 

Culture

Peter Byck encourages people to visit Marijke’s Grove at Paradise Ridge Winery in Santa Rosa. The sculpture garden there includes pieces from the late Al Voigt created for Black Rock City in the Nevada desert. Byck has attended the weeklong annual gathering and art festival, Burning Man, in the Black Rock Desert; he’s enthusiastic about the experience and plans to attend again this year.
 

Favorites

When it comes to wine, Peter Byck has his personal preferences, and he puts a selection from his family’s winery, Paradise Ridge Byck Family Winery, at the top of the list. “Paradise Ridge makes a Pinot Noir that’s really good, and that’s one of my favorite products,” he says. Martin’s Rake Sauvignon Blanc from New Zealand and Sofa King Bueno, a blend of Syrah, Petite Sirah, Mourvèdre, Grenache and Tannat from Chronic Cellars in San Luis Obispo also score very high on his favorites list.
 

Helping Hands

Outreach to the community is important to Byck. “That’s kind of a tradition in my family,” he says. “We really want to be a company that gives back. We’ve won awards for giving back to the community,” he says.
 
A team from the Winery Exchange recently prepared meals at Homeward Bound, the Novato nonprofit that is Marin County’s primary provider of shelter and services for homeless families and individuals.
 

Success

If he were to advise a young, budding entrepreneur on how to be successful, Byck would say, “You have to be self confident. You have to be determined. You need to be able to adapt to a changing market environment, but you have to be focused at the same time. You need to be able to recruit great people and build a great team.”

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