Bill Oliver’s dad was an Indiana University law professor with a lot of hobbies. “He tinkered with everything,” Oliver recalls, including making wine at home.
“My early memories were helping him in the basement of our home at 5 or 6 years old, literally stomping grapes with other neighborhood kids.”
In 1966, the Oliver family traveled to Ithaca, N.Y., where his father had a sabbatical to teach law at Cornell. He became really intrigued with the Finger Lakes wineries and thought, “Heck, if they can grow grapes and make wine in the Finger Lakes, why can’t we in Southern Indiana?”
So at the end of the sabbatical, the family returned to Indiana and planted grapes shortly thereafter. In about 1971, Oliver’s father approached the Indiana Alcoholic Beverage Commission about making wine. “They didn’t have a license on the books that would allow us to operate as we see wineries operate today with tasting rooms, and all that,” Oliver says. So the law professor got the Indiana Small Wineries Act passed and Oliver Winery opened outside Bloomington, Ind., in 1972.
Oliver’s father “remained a professor his entire career. He was in this conundrum I see so many small wineries in. He, the founder, has a full-time job and the winery’s on the side and the lack of time he has available to spend time at the winery insures the winery won’t be successful, but he can’t afford to leave his job. It’s really a Catch 22,” Oliver says.
“People in that situation have asked me what should I do, and I answer I really don’t know.”
In 1983, Bill Oliver went to work in the winery. “My Dad was delighted that someone with the last name of Oliver showed up on the scene full time. I applied some common-sense things: clean the place up, make good wines that are attractively packaged, treat customers nice when they walk in the front door. That’s a real simple business model, but you can apply it to a lot of business enterprises.”
Oliver met his wife when he got his MBA at the Indiana University Kelley School of Business in 1990-91. She joined the business. “She’s a really smart administrator,” Oliver says. “Sit down at the desk, get the HR done, get the marketing done, all that kind of stuff. I’m much more of an on-my-feet operations person. Together we’ve been quite a team and have grown the winery significantly. Last year we were just south of 400,000 cases.”
Those grapes that Oliver and his young friends stomped had been grown by his father. “He started a vineyard in 1966. We had some of the old school hybrids that people don’t grow much anymore: Shonac, Aurora, Baco Noir. They certainly grew well here, produced a nice crop, but the wines weren’t so good.
“Now we have new hybrids like treminette, chardonel, and others that make just beautiful wines. We look for what works here from a practical viticulture point of view and what will make a nice wine. If it’s deficient in either one of them, it’s not worth planting,” Oliver says.
Oliver has 60 acres which supplies the winery with 3-4% of what it uses. “Then we buy a lot from other states. . . California, Pennsylvania, New York, Washington, Michigan. Apples and honey comes from a Michigan supplier,” he says..
“We were really excited about some of the new varieties out there. Really excited by treminette and chardonel,” he adds.
When Oliver showed up at his father’s winery in 1983, fresh with his bachelor’s degree in business, he looked that the situation. The winery wasn’t profitable, and he asked himself what they could stop that was costing them money. The immediate answer: Growing grapes. His father’s vineyard “just went wild.
“When I met my wife, I took her out there. It was like the ghost vineyard. The trells falling over, vines just growing on the ground. All sorts of wild trees – you know, sumac, sycamore – were just popping up. Weeds as tall as your forehead,” he recalls.
“I was like, how would you like to help me build this? She was like, I think I’ll take that job in California,” Oliver said.
“We learned what happened when your try to mow over vineyard wires lying on the ground,” he added.
One of the winery’s first products was mead. Oliver’s dad began producing it in 1974, two years after he launched the winery. It was one of the winery’s first products to every achieve any significant volume, reaching 15,000 cases around 1980.
As the winery diversified into other products, the focus shifted. “It’s still an important product for us, doing maybe 10,000 cases of Camelot Wine, but not that big. We’re on batch 685,” Oliver says, adding:
“I like to say we were making mead before it was cool. A lot of meaderies have popped up and adopted that craft beverage sort of model, and we’ve been watching that. We been tasting some and honestly thought ours was better – I mean really better – and a lot of the other guys were getting big prices, like $20 for a bottle of mead.
“So, in an effort to relaunch – to say, hey, we make mead too – we came out with a kind of edgy kind of look – An Alice in Wonderland fantasy label, puts it right back where it belongs instead of in the craft category.
“We make it with Orange Blossom Honey. We’re really particular about that. We’ve been through all the mixes. Orange Blossom is the one for us that ferments nicely, gives us a clean, sort of floral not overly viscous sort of mead. A bit less sweet than many of the others out there. Our runs in the 4% sugar, where many of the others are in the 8% range.
“The yeasts we use for winemaking are adapted for grape juice, that’s their home. That’s what they love. When you put them for honey, they’re like ‘what the heck?’ There are some natural enzymes in honey that impede fermentation. The biggest thing we’ve done is working through the challenge of getting a really clean fermentation for making mead,” Oliver says.
Oliver doesn’t grow the honey themselves. It comes in 44,000-pound tanker loads at a time, three times a year. I can’t imagine how many hives that would take, not to mention the lack of orange groves in Southern Indiana.
Our honey supplier’s business is pollenating honey. They say they have more revenue from pollination services than from selling honey.
In 2000, the winery started expanding. “We just didn’t have the capacity before that,” Oliver told us.
“We built a big new steel building with a tank room and bottling line. Opened up Kentucky, Ohio right away, Illinois and Michigan soon thereafter. Now we’re in 22 states.
“We’re really focusing on our core,” Oliver explained, adding: “Tennessee is really solid. Florida and Texas are doing well too.”
We noted, sarcastically, that Oliver had avoided the temptation to open the export division three days after he arrived on the scene. “We find the fewer things we do – the fewer wines we make, the fewer places we sell – the more wines we sell. Just focus geographically and focus on the varieties that make sense for us. That’s the discipline that’s been learned, and, really, in the last three or four years implemented.
“Just do fewer things better,” he said adding that Tim Cook, chairman of Apple, said something really smart: “We say no to good ideas every day. That’s something you’ve really got to learn to do – to say, that’s a great idea but it’s just not what we’re doing now. That’s going to take resources away from the tasks we’ve got to do now.
“You can’t have 19 priorities,” Oliver said. “You can have three or four.”
Oliver winery has grown to the point it now has 105 employees, and produces 400,000 cases a year. And yes, he has a growth plan.
“We were up 16% last year,” he told us. “I’m overseeing completion of a small tank farm – three 114000-gallon tanks — and we’ll break ground on a new production building soon.
“We want to have it when we need it, but not much before we need it. We’re just trying to pay for things as we go here.”
Oliver Winery is free of debt. But it wasn’t always that way. “Talk about sleeping better, big time,” he says, recalling the day he paid off the winery’s debt.”
Oliver Winery produces, among other things, ice wine. There’s an interesting “reality of our weather here: While on average it’s warmer here than Ontario, which is the current epicenter of ice winemaking, our extremes are much more extreme than theirs.
“So, our coldest day in the winter is undoubtedly colder than it would be in St. Catherine’s, Ont. But it’s just volatile. Could be 40 one day, 20 the next, back up to 46, and then 10 below. I tell people for ice wine, I don’t need a cold winter. I just need a cold day. One cold day.
“We picked around Dec. 20 last year, the coldest day of our whole winter. When we got done at 10 a.m. and it still hadn’t reached 10 degrees. In early January of 2014, we were like 26 below for about 24 hours. It was an utter disaster for the vineyard.
“You understand from the literature what grape vines are winter hardy. But when it gets that cold, you really know,” he says.
With expansion plans in the works, we wondered if Oliver needed more people. The winery does, he said – especially a couple of winemakers.
We also wondered if Oliver way happy with his distributors. He is, he said. “It’s worked really well for us. We’ve gotten past the volume level where it’s hard to make it work. We’re well into that orbit where our distributors value us and we value them.”
We wondered what that magic volume level was that made distribution a really good thing.
It’s “close to 100,000 cases,” Oliver said, adding:
“I think there’s just an awkward place to be where if you’re small, you’re selling out the front door. If you’re large, you got good distribution. But you’re in a diseconomy of scale thing at 50,000 cases, not quite big enough to sell your wine for half price, which is what you do when you use distributors.
“We got through that gap mostly through retail. We had a substantial retail business which made it bearable . . . the retail sales subsidized the wholesale sales. Admittedly there are significant selling costs to running a tasting room, but the higher margins are good.”
We asked how the new mead package is doing. “Good, really good,” Oliver said. “We significantly increased the price, we’re seeing volume way up there. It’s working.
As our interview drew to a close, we wondered what the biggest piece of advice he would offer to someone getting started. Focus on organizational change, Oliver said. “Building an organization, hiring the right people. What does leadership mean? Establishing a vision, taking care of your brand. What’s the image of your company, what do people think of you? That’s the lessons of all the great brands,” he said.
Oliver’s worst experiences were two. One, common to almost all businesses, is making some “really bad hires. Careless hires. You’ve got this gut feeling it’s not going to work out, but you hire the person anyway.”
And, he said, “you’ve got to be more in touch with your consumers,” a point driven home to Oliver when he decided to take the winery’s best-selling wine, which was in a cork finish, and put it into a Stelvin closure. “We didn’t ask anybody. We didn’t do any focus groups. We came at it from a very technical point of view that this was a superior closure.
“It was an awful decision, and it bit us really hard,” Oliver says. “I could explain to that consumer what the advantage of a screw cap is, what a superior closure it is, and they would all understand it. And they would say, ‘I don’t care. I still want a cork’, he said ruefully, adding:
“We tried to muddle through the screw-cap period for three years.”
Editor’s note: We’re starting a new podcast series tomorrow on BeverageBarons.com, and the Oliver interview will inaugurate the series.