Founded: August 2017
Executive: Sarah Shadonix
2019 Revenue: 100% growth over 2018
This month, SSN interviewed Sarah Shadonix, founder and CEO of wine company Scout & Cellar.
SSN: As a former attorney, how did you come to found and run a wine company?
I have always been very interested in wine. After my second child was born, I spent the next year studying and earning sommelier certifications. After that, I ended up working for a company in California that sources wine for e-commerce where I learned about the logistics and compliance associated with shipping wine. I was living my dream spending time with grape growers and winemakers.
But, I was waking up with headaches. I took medicine, saw doctors, drank less—nothing worked. I’d drink a quarter of a glass and still get a headache. This went on for so long that I began to resent wine and regret my decision to leave my legal career.
Like any good lawyer, I had to figure out what was going on, so I spent months reading regulations in the U.S. and abroad. I talked to grape growers, winemakers, folks that worked for wine chemical and additive companies as well as those that sell wine and distribute wine.
The conclusion I reached after all of that research was that I missed the part of the winery tour where they take you behind the scenes to see the skull and crossbones. Specifically, lurking in wine were hundreds of synthetic pesticides, dozens of chemical additives and sweeteners as well as high levels of sulfites. And if I wanted to know what was in my wine, I couldn’t because there’s no ingredient label to tell you what’s in it.
I started Scout and Cellar to share what I found. We source and produce Clean-Crafted wine, which is a standard that we developed that includes independent lab tests at multiple stages to confirm and verify our product is truly free from chemicals, synthetic additives and sweeteners.
SSN: How did you get started in direct selling?
Women, the primary buyers of wine, select based on three things: the story behind the wine, the label, and what their friends are drinking—which is exactly how direct selling works. Plus, I was very keen on taking advantage of the opportunity I perceived in the online space. Three months before our launch, I did 15 or 20 tastings in a road show around Texas. We told people our story. People loved our product and were interested in the opportunity; enough so that we launched that August with 45 consultants.
SSN: What was your most challenging time and how did you get through it?
Many of our challenges came because I was too conservative—I thought we’d basically sell wine to my mom and friends. Instead, we’ve been drinking from a fire hose. We’ve moved five times in two and half years. The first 4 months, we had one and a half warehouse employees, we sold $2.5 million. Most of those orders were packed by friends and family and consultants and their families and our children, working hours into the night just to get the work done.
The month before we launched the company, we had chosen one wine as our flagship, featuring it in all our materials with a great story about the winemaker. However, because the fermentation wasn’t quite finished, bottling was delayed and we got the wine to testing right at the last minute, where it failed our test by less than a part per billion. A tiny, tiny amount.
At this point, we’re not even a company yet, and this is such a little thing and nobody is ever going to know. But I made the decision to lean into our core value of do the right thing and we pulled the wine. It set a precedent for how we make all decisions on close calls. We didn’t have a new hero wine; we didn’t have time for that.
For us, it doesn’t matter if it makes business sense on this minute, this day. We do the right thing for the standard of “for the good of the company and for the good of the people.” It might not be easy, but the right thing is always the right thing.
SSN: Why don’t all wine companies make Clean-Crafted wine?
Because it’s hard, it’s expensive, and from a business perspective, it doesn’t really make much sense. It starts in the vineyard where you can’t just spray synthetic pesticides to manage a problem. Less than 1 percent of the $70 billion U.S. wine market is Clean-Crafted. Also, time is money and fermentation is a wild process. To make fermentation happen quickly, winemakers use chemicals and enzymes. Then they add chemicals, synthetics and sweeteners to create a consistency in taste that rainy and sunny seasons, and hot and cold weather don’t necessarily produce.
Part of our journey is tasting wines that are interesting, offer flavors and aromas that we’ve probably not experienced, and a next vintage won’t be the same—and that’s frigging awesome.
SSN: How does your winemaking process work?
We source small lots of wine, but we also source fruit and have winemakers on our team. Primarily we select the growers. Our standards are so rigorous that even if our grower is compliant, if he’s got a neighbor that’s spraying a lot, his grapes might not pass our test. Currently, we have about 50 SKUs, and as a sommelier, I lead the product team and our winemaking supply team. Our lots are anywhere from 1500 cases to 10,000 cases, and once a particular vintage—a season’s yield—is sold out, it’s gone.
SSN: What are the most restrictive regulations you have to work with and how do you comply?
This is a heavily regulated space in nearly all aspects from permits to manufacturing to various state shipping regulations. In fact, compliance is so important that we’ve used it as a business strategy. Because we’re forward-thinking as it relates to compliance, both in the alcohol and beverage space, and in the direct selling space, we’re not reactionary. We’ve built everything we do around compliance because it’s the fuel that’s going to continue to allow us to grow. I think more companies than not simply react to compliance as opposed to plan for it. All companies have to plan growth with compliance as a buttress for that growth, otherwise they run the risk of collapsing.
SSN: What do you think is the greatest challenge facing social selling today?
We need to open people’s minds to the fact that this is an industry operating as a way to connect directly with customers, build stories and create opportunities. That’s the best part of this whole business. Let’s get compliant and then through compliance and through our performance, let’s show the world how great a channel this is.
SSN: What advice would you now give to your younger self?
No one really knows what they’re doing. Everyone is working every day to figure things out, to learn from events and information as they receive it in real time to get better. And this means that all life’s rules, society’s expectations and social norms have been constructed by people doing the best they could with the information they had. And once you understand this, you can accept as true the following: anything is possible.
SSN: Who has influenced your career the most and why?
My dad. He’s a lawyer and ironically, he told me not to become one. In his practice, he worked directly with business owners who became his friends. He would take me hunting and on other outings with them, so from an early age I got to be around people that owned their own businesses. Although he started and ran a couple different law firms, I think deep down he lamented that he never had started a non-law business himself. Those were definitely two elements of inspiration for me.
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