640 Aubrey Terrazas:

Have you ever felt intimidated picking a wine? There you are in the wine store, confounded with all the many choices. Or out to dinner, trying to make your pick from the impossibly long wine list. We’ve all been there. So wouldn’t it be amazing to have a guide to help you find the bottle that matches your tastes?  Aubrey Terrazas is a wine expert who has found a wonderful new use for artificial intelligence.

MELINDA

Hi, welcome to Wings of Inspired Business. I’m Melinda Wittstock, 5-time serial entrepreneur and founder-CEO of the social podcast app Podopolo, and here on Wings we share the inspiring entrepreneurial journeys, epiphanies, and practical advice from successful female founders … so you have everything you need at your fingertips to build the business and life of your dreams.

Today we meet an inspiring entrepreneur who started out as a wine journalist focused on sustainability and discovering new wines from breakout regions. Now a Master Sommelier candidate after a long career as a hospitality professional, Aubrey moved into the e-commerce space, co-founding a digital wine service called Palate Club.

We’re going to geek out about wines, artificial intelligence and much more, so I can’t wait to introduce you to Aubrey! First…

Have you downloaded Podopolo yet? If you’re listening to this podcast right now then I know you love podcasts as much as me – and that’s why it’s time to explore the app that makes listening social and curates the ideal podcasts for you from our library of more than 4 million. Find out what everyone is talking about – join us on Podopolo today – free to download in either app store.

Aubrey Terrazas spent a year tasting hundreds of wines – all to identify over 200 wine traits so her startup Palate Club could build the artificial intelligence to help you know your taste in wine.

Aubrey is a wine educator and journalist, her work regularly published in GuildSomm and SommJournal, and  recently she took the leap into e-commerce recently co-founding the Palate Club.

Her ideas and disruption to the classic “wine club” model positioned her as one of America’s top sommeliers and wine entrepreneurs. Today we talk about how AI can help personalize wine buying, why the pandemic was tough for her company even though wine consumption was up during the lockdowns, plus the inside skinny on sustainable and healthy choices.

Let’s put on our wings with the inspiring Aubrey Terrazas.

Melinda Wittstock:

Aubrey, welcome to Wings.

Aubrey Terrazas:

Thanks, Melinda. Super excited to be here.

Melinda Wittstock:

Yeah. You, like me, started a business in the middle of the pandemic, where there was a lot of opportunity for innovation, as well as a lot of businesses having to pivot and whatnot. What’s your experience been like, starting something up in the middle of all of this?

Aubrey Terrazas:

Yeah, well, it was obviously unexpected. I sold my last partnership around January of 2020, and so I knew that I was going to be venturing out onto my own, but, you know, the circumstances changed pretty significantly. Luckily, a lot of what I do is digital. It’s a digital marketing agency, but as I focus mostly in the food and beverage space, obviously a lot of companies were not doing well in that sector during that time, and it’s also a very sort of face-to-face interaction.

Primarily, in the past, business development had been done through wine expos or other events where you can really just meet and connect with people. And so I did have to get more into the world of cold-calling and just really trying to meet people online and grow my digital presence. And I also did take the opportunity to get better at what I do, too, so during that time, I got really sharp with paid media and some other things that I had done before, but I feel that the time and the space that I had with COVID allowed me to be a lot stronger in my career.

Melinda Wittstock:

Yeah. It was really kind of a time to look within and get into alignment and just kind of figure out, “God, what is it that I really love to do?”

Melinda Wittstock:

You’re a Master Sommelier candidate, so obviously an expert in all things wine, which is one of my loves. You have this journalism background, this e-commerce background, and they all fuse together. Did you understand that before you went into it, that all your expertise was going to fuse together in this way? Or is it just easier kind of connecting the dots looking backwards?

Aubrey Terrazas:

I think, in, for this business, I had enough experience where I kind of already knew the direction I was going in. I will say that there was a very long period in 2020 where I wasn’t sure if I should still continue to focus on the wine niche because it was affected by COVID and it was harder to make those connections and find the leads. But, at the same time, I think that when you’re passionate about a subject, it’s so much easier to talk about it and to market it, and I do think that there’s a need for businesses within a given niche to have someone that really understands their product, because otherwise the marketer can kind of… sometimes I feel like agencies sort of water down the message if they don’t truly understand the industry and the way that someone that’s worked in it has.

Melinda Wittstock:

So it’s interesting with COVID because you would’ve thought that certainly the demand, the consumer demand for wine, probably went up.

Aubrey Terrazas:

Oh, for sure.

Melinda Wittstock:

But then all the supply chains I imagine that must have been challenging?

Aubrey Terrazas:

Oh yeah. Well, for starters, most wine businesses had not yet really converted to e-commerce, and for a lot of them were either just kind of stalling and a little bit afraid, or they were trying to figure out the pivot in the midst of the pandemic. For sure, the overall demand for it went up, and so did the existing big e-commerce players like wine.com or Vivino went up like 300%, but that wasn’t necessarily my target lead. I work a lot more directly with wine regions or wineries or other kinds of e-commerce startups in that food and beverage space, and so I think that there’s a lot of adapting that had to be done and frankly, a lot of them weren’t ready for it. And add to that, there were a lot of shipment delays too, because of COVID. And another layer was there was still the Trump tax on French wines, too, which was like 25%, which hurt those businesses a lot.

Melinda Wittstock:

Oh, my goodness.

Aubrey Terrazas:

So now as the pandemic, in a way, you’d like to think it’s receding, but we have all these new variants and whatnot. What does the outlook look like for your business now? Are things kind of getting back to normal? Are there still lots of challenges or… how’s it going?

Aubrey Terrazas:

Yeah. You know, I think that overall, there’ve been so many businesses that were really affected negatively by it, but in terms of the overall shift in the industry, I think that it does have some… it has a positive outlook because wine kind of moves a little bit slower. It’s something like a 3000-year-old history, it’s not blockchain, you know? And so it was really time for businesses to accept that they needed to have a digital presence, so I think a lot more people are not only converting to e-commerce, but also more open-minded about exploring things like social media, virtual tastings, which is better for not only the business, but it’s also better for the wine buyers and the average consumer, because it’s much easier to find new products and to learn about them with the comforts of just staying at home, as many of us are still doing.

Melinda Wittstock:

I think this is really interesting how you combine data, like of what people really actually want, but say with your Palate Club, so people can actually really discover wines and match them to their taste, so there’s a whole bunch of different things here that lead to discovery and I’m fascinated by the use of data, in this case, to really advance this.

Aubrey Terrazas:

Yeah. I think that that’s the best feature of our product overall. The wines are great, but the way that Palate Club differentiates itself is it’s a wine club subscription that uses AI to match sommelier-selected wines to your taste. So already there’s a lot of consumer confusion, so from the consumer side, you go to a wine shop or you go to an e-commerce site and there are hundreds and hundreds of labels. And so you find little tricks like, “Oh, I think I like Cabernet”, or “I like higher alcohol wines”, whatever it might be, but this not only allows you to discover new wines that are matched to your taste with the trust that there is an algorithm for finding great wines for you, but it also helps you to learn more about your taste too, because you get a wine profile that details everything about your palate, and it continues to improve. Just kind of like Netflix, it starts to learn your taste and the subtleties of what you do and don’t like, and so you can actually…

Melinda Wittstock:

I’m in AI… I’ve got a long background in AI. So, I mean, it’s really the future of so much of everything. I mean, we’re doing the same thing with podcasting as you’re doing with wines. And it does get smarter over time, for sure.

Aubrey Terrazas:

That’s amazing. Yeah. I think it also helps people to, even outside of the apps that we’ve created, it also empowers the consumer to go out and find new things on their own, too, which we’re very happy about. If they take that information and they go to a restaurant, for example, or go to a wine shop, and they say, “Okay, well, I know that I like these types of wines and I know that I like high acid wines with breadfruit.” And that’s vocabulary that they can use that they didn’t have before that still allows them to have a conversation outside of the app.

Melinda Wittstock:

Yeah. It’s so, so important because I think people feel… they can feel kind of intimidated, I guess. You know, you go into certain wine stores or at a restaurant or whatever, and people are trying to discover, but it’s a very… it’s an odd thing, because it takes a while to develop that expertise or even know what your taste actually is and to discover new wines. So this makes a lot of sense and I’m surprised it’s actually taken this long for the personalization and the data and the technology to kind of fuse with this particular industry. I mean, it’s happening in all industries, really, but what led you there? What led you to say, “Okay, you know what? I’m going to use… I’m going to really leverage tech here in the wine business.” It’s very disruptive.

Aubrey Terrazas:

Yeah. Well, so our founder, Nicolas, he’s from France. And so he moved to the States about five years ago and he thought he knew a lot about wine, as many Frenchmen do, and then, but was still confronted with all of the frictions that we have of this global wine market in the States. And it’s really frustrating to not really know what you’re going to like.

And there have been some other competitors or some other companies that claim to use some sort of taste-matching technology, but it was very shallow. They would ask a quiz, you know, “Do you like your coffee black or with sugar?”, or “Do you like raspberries or blackberries?”, which actually really doesn’t have anything to do with your wine taste. Just because you like raspberries doesn’t mean that you like raspberries in wine.

And so he was really focused, so we teamed up pretty much from the beginning and I was able to lend my background as a wine expert to identify 200 wine traits. And so every time that someone… or any time that we purchase a wine, we rate it as a sommelier. So we were really focused on high quality wines and also high quality data, which really hadn’t been done before.

Melinda Wittstock:

So tell me, how fast is this growing? How many people, how many customers do you have now? And describe a little bit more about how your business actually works, because it seems like it’s a kind of a two-sided market in a way.

Aubrey Terrazas:

Yeah. You know, we are still definitely in startup mode, but we are growing, I think, at a very healthy rate now. We have about 25 team members and we have somewhere around, I think, 300 to 500 regular subscribers, but around 10,000 profiles created. And then, so within that, there are people that certainly just buy from the shop and don’t have the wine subscription, but the people that do subscribe, basically, you create your profile through a blind tasting kit with four half-bottles that we’ve selected to be kind of polarizing. And then, from there, we have a profile and we can start to send you wines on a regular basis you choose, it could be every month, every three months. And we kind of send a preview beforehand just to make sure that there’s not any sort of subjective material that we overlooked. And then you just get new wines sent to you every month, or whatever, that are matched to your tastes.

Melinda Wittstock:

So you’re very interested in the whole area of creating ethical and diverse work environments, and this is also an interest that I share with you. At Podopolo, we’ve focused on building a really diverse team that’s worldwide. So what is your vision there and how does that express itself in your company, Aubrey?

Aubrey Terrazas:

Yeah, well, I, especially coming from the restaurant background, I have worked in a lot of different sectors or in different companies, where I think that the way that things were communicated wasn’t always constructive to the growth of the company or of the team members, and so I think that feedback is crucial to any business, and so I’m careful with any sort of language and culture that we create, that all team members feel open to express their ideas and that, from a management level, as well, that we can give feedback in a way that’s really about the growth of the company and be open-minded to different ways of getting to our goal, if that makes sense.

Founder might have a vision about how we do something, but then maybe a team member sees it completely differently, and then we meet somewhere in the middle and it’s even better. And I think that’s where diversity comes in, as well. The more backgrounds you have, not only… and I’m not just talking about race or gender, but even where they grew up, which country they live in, and their professional background as well, I think that that really gives a company an advantage because they have so many different ideas that are brought to the table and different ways of seeing things. So, you know, me from a wine industry, maybe I think something’s really clear, but someone that has no wine experience that hardly drinks wine can say, “This doesn’t really make sense”, which means that we have to work on the message harder.

Melinda Wittstock:

Yeah, because, well, it also is reflective of your customer-base as well. You know what I mean? Especially if you’re trying to reach a lot of different people, so like some of your customers, for instance, are new to wine, others are experts in wine, right? So combining all that is great, so how does it work in practice, when you have, say, a mission for a company, but that you have so many diverse perspectives, because on one hand, the risk is it’s sort of a committee and you never really make decisions, and on the other hand, collaboration is vital to success. So how does that actually work in practice and the way that the company is run?

Aubrey Terrazas:

Yeah. Well, I think that it is important to have a strong vision and to have that as the foundation and to have clear company cultures about what dialogue is and what our values are. And during those team meetings, I do think that there are opportunities, maybe we express how we want something done, but still having the comfort level of the team members to be able to speak up if something doesn’t seem right or if maybe there’s a crack in our vision for a specific project.

Melinda Wittstock:

Yeah, you know, it’s so funny, as I listen to you and everything you’re doing in the wine business, we’re sort of doing in the podcasting business and our culture is so similar as well. And it’s so interesting. And so you also are a big believer in impact, or using impact to scale business. And so this, I believe you’re talking about making the planet a little bit better than it was before the launch of your company. So how does that express in what you’re doing?

Aubrey Terrazas:

Well, in 2021, we see, even statistically from market reports, that customers are more and more aware of their consumer choices. And it’s important to them that they have a company that shares their values. And so I think, now more than ever, it’s really important to speak up and to hold to what’s important to you as a founder. And for us, a lot of that is around sustainability. I can’t say that 100% of our wines are sustainable. We choose high quality wines first, but probably 90% of them, you know, as a sommelier, have been able to dig a little bit deeper into a lot of those winemakers’ stories. And so even if they don’t have the means to be organically certified, for whatever reason, we know enough about their story to know that they’re taking care of their soils, they have minimal intervention, and maybe they even have other practices like a diverse hiring practice, or water reduction in the winery, things like that. So that way, not only is it better for our planet, but I personally think that those wines are better too. They usually taste better.

Melinda Wittstock:

I came across a company called Dry Farm Wines not so long ago, and they’re a sustainable company, but they just make sure that the only wines that they sell have no chemicals in them, like none of the farming pesticides, for instance. There are a lot of California wines, there was a study not so long ago that I read, most of them had Roundup in them, right? So they focus on making sure there are no chemicals in the wine or reducing the added sugar content, like some wines have actual sugar added to them, right? And so this is kind of interesting, so how do you approach that, like in this whole move towards healthier wines, like no chemicals, no extra sugar, that kind of thing?

Melinda Wittstock:

How many of your customers are really focused on this or worried about it or make it a point to demand those sort of healthier wines?

Aubrey Terrazas:

I can’t speak to the exact percentage, but I can say that it’s more and more every day. I think that the more that consumers have heard these buzzwords and through trends like natural wine, no sulfites, where people get really curious about what’s in their wine. From our side, in the future, as part of future funding rounds, we do plan down the line to do laboratory testing on them, so that way there’s a healthiness index. And so when you buy a wine, you can say, if that’s important to you, you know that it’s “80% healthy” or whatever it might be.

We still want to represent a very diverse portfolio, so that’s one thing that’s different, Dry Farm focuses specifically on low sugar, low alcohol, whereas that might not be for everyone’s palate. It’s a really specific style of wine. But for us, we do look closely at the winemaker stories and at the winemaker practices as well, to make sure that they lean towards sustainable practice, even organic. A lot of them are biodynamic, which is organic, a new-agey version of organic that kind of puts organic on steroids.

So for us, right now, it’s really about buyer research and making sure that we look at those things before we purchase a bottle of wine. And then, in the future, we will add that extra layer of, I guess, trust, with the laboratory testing.

Melinda Wittstock:

As people become more intelligent about wine, it strikes me that your business will have a lot of data that is going to allow you to serve your customers much, much better. Like you’re helping your customers, but then your customers are also telling you what they want. And I’m curious, what kind of impact do you think long-term that that’s going to have on the wine industry and wine producers? Do you think that it’s really going to change a lot of the ways that wines are produced or how they’re marketed or say, for instance, like we were talking about this health aspect of them?

Aubrey Terrazas:

Yeah. I think that it already has changed a lot, even since my time in the wine industry. You know, we talked about how impact can drive the growth of a business, and so so many winemakers, maybe they already had some of those practices in place, but more and more are really going through the process of getting those certifications, there’s sustainable organic biodynamic, which is not an easy thing to do. It takes something like five years to convert to certified organic. And so they’re going through that trouble because they can ask for a premium price on their wine, and because the consumer demand is constantly going up, that market trend has been very consistent over the last 5-10 years. And so I think that not only is it better from a social standpoint and being responsible with the planet, but it does actually allow you to sell more wines and to have a story that’s more marketable as well.

Melinda Wittstock:

So one of the things that I noticed in when we prepare for the podcast and whatnot, I mean, you mentioned that this is a very male-dominated industry, so what’s it like for a woman? What’s your experience been in that? I mean, I sort of, I think about, I’m in tech, right? Very male-dominated as well. So what’s your experience been?

Aubrey Terrazas:

Yeah. As a woman in the wine industry, I think that it has overall made me stronger as a professional because, first of all, I started very young. I was a som when I was 24, and then just a few years later, I was working for this tech startup, Palate Club, and so I had to go into a room full of investors as a 27 year old 5’1″ woman and ask them to trust me and to give me money. And so, when you’re faced with doubt, from the beginning, you have to be a lot more confident and I think you have to be even more knowledgeable than men because you sort of have to prove yourself often. And I think that now I’ve really gotten through a lot of that, but it made me work harder, it made me study harder, it made me practice the pitch harder, and so overall it’s made me stronger. There have been, of course, some challenges which I can get into if you’d like.

Melinda Wittstock:

Absolutely. I’m just curious because, for all the women listening to this that do work in male-dominated industries, right? There are just different sort of challenges, and a lot of women do gravitate to businesses that have more high proportion of women in them. And so for those of us who don’t take that path, any advice from what you’ve experienced or how you’ve dealt with it is helpful. So, please.

Aubrey Terrazas:

Yeah. And I will say that before, well, I guess kind of at the beginning of my wine career, I was a yoga instructor for a long time, so I’ve seen the two extremes where it’s all women, pretty much, and then all men.

But when I made that switch, and I was really just kind of surrounded by men, one of the challenges, outside of just the trust factor, is also obviously there’s just, I think sometimes there’s this friction where men might try to take… some men, anyway, might try to take advantage of a woman that’s trying to start her career and try to present themselves as a gateway into opportunity, but through a situation that might not be appropriate or comfortable for the woman, whether that’s a date or it’s supposed to be a professional conversation, but then suddenly it feels like a date or suggestive comments.

And for me, I really had to be just very strong about my professionalism and my boundaries, and it can be uncomfortable too. And it almost feels easier, sometimes, to kind of play into that. But I think that that only gets you so far and if you want to be taken seriously, you have to go in and tell them what you’re there for and who you are and why you should be taken seriously from the beginning.

Melinda Wittstock:

So when you think, Aubrey, of your future and where you’re going and the grand vision, where would you like to see your company in a few years from now, 5 years from now, 10 years from now? What’s the vision?

Aubrey Terrazas:

With Palate Club, I think that there’s a lot of opportunity with the taste-matching technology. I think that, in 5-10 years, we’ll be pairing chocolates to your taste, whiskeys to your taste, coffee. It’s really endless, and I think that there are a lot of people that want this service, where they can reduce the friction of having to choose. And also, I mean, it’s so much easier to have wine delivered to your door and not have to deal with this bulkiness of carrying bottles around, et cetera.

Melinda Wittstock:

I mean, I think there’s so much room for growth and disruption, especially as so many more consumers get into wines and the personalization of what you’re of what you’re doing, but I love the sustainability piece as well. I really think that that’s going to be a major, major part of dictating consumer choices as we move on. I’m curious, though, in that sense, how the climate and climate change is changing the wine industry. I mean, I’m from Canada, which never was a wine producer, and all of a sudden Canada has some great wines, you know, some great pinot noirs up in like in the Northwest of Canada. You’ve got all these really lovely white wines in Ontario, like near Toronto. What? So how is that impacting everything, and how will the industry change there?

Aubrey Terrazas:

Well, first, I think my first formal wine tasting was actually in Ontario when I was 19. And I went to some ice wine producers.

Melinda Wittstock:

Oh, yeah. [inaudible 00:29:55].

Aubrey Terrazas:

So I’ve been around for a while. 19 was a while ago for me. But yeah, for sure, it’s really curious to see how everything is changing and there’s a lot of innovation happening even within very classic regions. Bordeaux is actually very surprising for how much innovation they’ve introduced around climate change. They now permit for the Bordeaux AOP, so the regulating system, the government body, that allows you to say that your wine’s Bordeaux, they now permit more warm-climate grapes and Spanish and Portuguese varieties, for example.

And I also do see a lot of wineries changing their practices. So some of them, some of it is just wineries adapting to what’s happening so they can continue to make good wine in their region, and other wineries, more and more, are focusing on reducing water, and even the packaging choices, because the bottle takes up about over 50% of the carbon footprint of a bottle of wine. And so I think that we’ll also see a lot more wineries switching to more… it’s not carbon-neutral, but I guess carbon-efficient packaging like Tetra Pak, which is kind of the milk carton product, you know, and then obviously box and canned wines. And I think that the consumers are going to really start to accept that great wines can come in a can, and we’ll see more and more in the future.

Melinda Wittstock:

That’s wonderful. Well, Aubrey, I want to make sure that everybody knows how to find you and work with you and really test their palate out with all, everything you’re doing. What’s the best way?

Aubrey Terrazas:

Yeah. Well, I’m on LinkedIn at Aubrey Terrazas. You can go to the Palate Club site. It’s P-A-L-A-T-E-C-L-U-B. So it’s palate like your mouth, not like a painting palette. I also have terravineagency.com is the agency for digital marketing services and event services. And otherwise you can follow… all of them are on Instagram, too.

Melinda Wittstock:

Fantastic. Well, Aubrey, thank you so much for putting on your wings and flying with us today.

Aubrey Terrazas:

Thanks so much for having me. It’s been great.