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People You Should Know: Jordan Kivelstadt

Author: Stephen Ferry
August, 2014 Issue

“If you can take the resources required to build a package once—and then reuse it 100 times—the benefits are incredible.”

 
 
 
Many wines are sold before they’re ready to drink. They’re sold with the advice that the consumer should hold them for two or three years—or more—for optimal taste. But that leaves a lot to chance. If the wine isn’t stored optimally, it may not provide the taste experience the winemaker planned.
 
Aside from that, most people don’t realize the manufacturing of the packaging materials is the most the most energy- and resource-intensive part of the entire production process for conventionally bottled wine.
 
Jordan Kivelstadt, co-founder and CEO of Free Flow Wines, was aware of these things back in 2008, when he was bottling at a North Coast winery.
 
“Bottling lines are notoriously finicky,” says Kivelstadt. “There are a million things that can go wrong and, on one particular day, many of them did just that. To vent just a bit, I turned around and kicked one of the stainless steel kegs that all wineries keep around to hold topping wine. And that’s when the light went on for me: I thought, ‘Why can’t I sell wine in one of these?’” And that’s exactly what he did.
 
“When I started Free Flow Wines with my partner, Dan Donahoe, in July 2009, we knew the challenge was going to be how to convince the world that we could really deliver premium wine from a keg or a draft system,” recalls Kivelstadt. “Awareness among consumers, wholesalers and distributors was close to nil four years ago.” But word is getting out quickly.
 
“We’re all about reusable. If you can take the resources required to build a package once—and then reuse it 100 times—the benefits are incredible,” says Kivelstadt. “What Free Flow does with every keg is eliminate the need for 26 bottles, 26 corks, 26 labels, 26 capsules and a cardboard box. True, glass can be recycled, but only 27 percent of the glass used in the United States actually does get recycled. The rest goes into landfills.
 
“A second benefit is that a stainless steel keg protects and preserves wines like nothing else out there. Winemakers make these wines knowing it’s going to be distributed in a keg. When it pours, it comes out exactly as they intended.”
 
Kivelstadt reflects on the decision to build a category versus a brand. “When we started the company, we had a brand called Silvertap, the first nationally distributed wine in kegs. We sold that brand about a year ago, because we didn’t want to be in the branding business. We work with almost 200 wineries. If we’d remained a brand, we would have been restricted to a single wholesaler in each state.
 
“When you’re building a really complex category, it’s very difficult to build a brand and a category at the same time,” Kivelstadt continues. “Especially when you face the kind of legislative restrictions that exist in the alcohol industry, and also the infrastructure needs of wine on tap.
 
“So we chose to build a category rather than a brand. What that let us do was become distributor-agnostic. Distributors and wholesalers are actually helping us build this business. They’re looking to us for help to understand this new business of premium wine on tap. That’s completely changed our go-to-market strategy.
 
“One aspect of our role as category advocates is the keg logistics, but there are a lot of other complexities in the supply chain: Dealing with equipment installation, maintenance, restaurant design and a lot of other facets that represent challenges. Free Flow Wines is looking at opportunities to expand its service offerings as a company, to provide operators and wholesalers with cleaner, smoother logistics, to make this whole category more viable.”
 
Today, Free Flow Wines kegs are officially being sent to 45 states (including Puerto Rico) and, by the end of 2014, it will be legally clear to ship to all 50 states.
 
“Our five-year plan is to supply 10 percent of U.S. on-premise wine consumption,” says Kivelstadt. “That would be the equivalent of 6 to 6.5 million cases, or about 3 million kegs per year.
 
“So far, we’ve taken more than 2.3 million bottles out of landfills. Our goal is to take 10 million bottles per year out of landfills. When you think about that from an environmental impact perspective, it’s huge.”
 

 

 

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