After a record revenue year in 2022 of $10.5M dollars, Woodberry Wine entered 2023 with the expectation to push even harder and to reach “higher heights”. And our expectations were justifiable as we experienced a fivefold increase in revenues over the past 10 years, so growing as individuals and as a Company is simply part of our DNA. So, at our January All Company kick-off meeting, our theme was “Top Gun” complete with every person having a call sign, aviators and Top Gun persona’s. And while we had a solid game plan, the market had other plans and put our Company and our elite team into the “Danger Zone”.
Despite the exact same team and portfolio, our revenues in the first quarter plummeted to seasonal levels we had not seen in years, and while we saw some recovery in Q2, overall revenues decreased 8% through the first half of the year and profitability decreased almost 400%. All of our input costs increased over $250,000 through Q2. Not a particularly great report card for a team of professionals who pride themselves on achieving their missions and who were looking to accelerate our performance to Mach 10!
Like any mission that is ultimately successful we had to course correct, come up with a new, achievable plan that involved taking a hard look at our business model, tweaking our leadership team, and prioritizing profitability over revenue growth. We hired some external business experts to help us see what we couldn’t, or wouldn’t see, and they helped us to realize that “Revenue is Vanity, and Profit is Sanity”.
Our new Chief Financial Officer, Jung Hee Jang, is a transformational leader and forensic accountant who is helping us to restructure the business for success. She is a very good communicator, and our supplier partners appreciate her responsiveness and I appreciate her tenacity and fearlessness in going into a dogfight and expecting to win.
Dan Odoms, our exemplary operations leader was promoted, and he added the role of Sales Director to his responsibilities. His unique perspective on our business, experiencing firsthand how sales impact our operations and how operations impact our sales and the customer experience, uniquely qualifies him as the right leader during this time of transformation at Woodberry Wine.
Some important accomplishments and decisions were made that will set us up for success in 2024 and for the foreseeable future. First, we made the decision to retire the Woodberry Wizard, our proprietary business management system that we successfully launched in 2017 and we are replacing it with a system that will provide even more capabilities to our sales and operations teams going forward. Under the leadership of Rachael Toupin, the migration has gone flawlessly. This also predicated a move to migrating our financial management software to an on-line version, bringing productivity and performance features necessary for the Company to better financially manage the business.
We settled a legal dispute with the import Company we acquired in 2021, eliminating an unneeded distraction. We continued the elimination of non-productive inventory and decreased Woodberry Wine’s inventory to $1.25 Million, an extremely efficient number for a Company our size. The inventory reductions have allowed us to add new, more productive brands to our portfolio, and in 2023 we added 8 new brands.
Our warehouse was sold to a new investment group of which I am a minority partner, and we secured a new, long-term lease that will provide stability to the business for years to come.
The financial deep dive that we did into our business has revealed that 43% of our customer base generated 95% of our gross profits and that 53% of our Brands/Sku’s generated the same. This means that almost half of our sales and delivery efforts are yielding small or no results for us in return for our service. This is an incredible opportunity for us to focus on and clearly, we will be making changes to focus our best resources and products on our best clients, and we will align our delivery routes to reflect a more streamlined and efficient operation.
Despite the dogfights that we felt we were in all year, Woodberry Wine achieved revenues of $10.1 Million dollars, our 2nd best year on record, and while profitability was elusive, we have set ourselves up for a profitable 2024 and beyond. I understand that sometimes the achievement of our goals does not come in the timeline that I expect or even the way that I expect, but ultimately I know that the mission we set out to achieve in January of 2023 will be accomplished and Woodberry Wine will achieve higher heights over the next several years.
I look forward to seeing or hearing from you in 2024. Please send me an email or a text if you have any constructive ideas on how we can continue to improve our Company.
Dan Glisky, Jr.
CEO and Managing Partner
Comments are closed