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Wine, Gourmet Shop Builds on Partnerships to Cross Many Boundaries

November 29, 2000|CYNDIA ZWAHLEN | SPECIAL TO THE TIMES

It's been a good year for Fermentations Inc., a wine and gourmet food shop in Cambria. Owner Leslie Gainer is uncorking the first of several potential partnerships with corporate clients interested in her wine country specialties.

Higher Octave Music Group, a New Age record label based in Malibu, has agreed to include Fermentations gift baskets in a new retail catalog. The deal dramatically will expand Fermentations' reach, a longtime goal of Gainer's.

Gainer is in talks with a national department store chain interested in setting up a Fermentations display in its stores and providing gift-basket ordering and shipping services for its customers.

In the meantime, the shop has more than doubled its own mail-order sales as a percentage of total revenue in the last three years.

"A lot of wonderful things have come to fruition," said Gainer, a Southern California native and former public-interest lawyer. She expects sales to top $400,000 this year, not counting the Higher Octave boost.

Gainer opened Fermentations in the coastal town of Cambria--halfway between Los Angeles and San Francisco--with business partner Alex Meline in 1995. The women treasured Cambria's low-key lifestyle but struggled with expanding their business beyond the number of people who walked through the doors of the shop, located in a 1920s house.

Heavy rains in spring 1998 washed away 20% of their tourist business along with portions of Highway 1. Determined to expand their reach through their fledgling catalog and Web site, the owners contacted The Times for a Business Make-Over.

Consultant Karen Gorrell, owner of Ideation Foods in Redondo Beach, met with the owners at The Times' request and understood the appeal of the remote but charming coastal town. In fact, she said, Fermentations' customers are buying a bit of that memory when they purchase the shop's local wines and regional gourmet goodies, including Cabernet chocolate sauce, chutneys, flavored grape-seed oils and gourmet vinegars.

Her advice: Stir that memory in the catalog and other customer communications, move out of a relatively passive selling mode and upgrade the computer system and software to allow more effective gathering and use of critical customer information.

The owners took her advice to heart, Gainer said. They began to expand their Web site, redesigned their catalog to more closely reflect the romantic mood of the shop, reshot product photographs and upgraded their technology.

Before the changes had a chance to take hold, the business faced the departure of Meline. Meline had been interested in growing the business more on a local level, Gainer said, while she wanted to expand nationwide. Changes in Meline's personal life also led to her departure, Gainer said. The disruption meant virtually flat sales in 1998.

"It did take a lot of time and energy from the business . . . but that's part of the business relationship process," Gainer said.

As the solo owner, Gainer began to seriously pursue her dream of expanding Fermentations' reach on a large scale.

"Our goal is to expand to additional brick-and-mortar locations throughout the U.S., if not internationally," Gainer said. She wants to provide potential customers nationwide with the ability to touch and feel the products and experience the food and wine tastings and social interaction her shop provides, she said.

Her early talks with specialty retailer Williams-Sonoma about strategic partnerships, including a possible acquisition, have been put on hold as the retailer goes through its own corporate changes, Gainer said. She continues to pursue other merger or acquisition partners.

And she continues to work on corporate partnerships such as her deal with Higher Octave. The label's vice president of strategic marketing, Sharon Wilson, contacted Gainer after she read about the business in The Times. The label was interested in developing its own line of merchandise, and Fermentations seemed like a good fit, Wilson said.

"We were very taken by the Fermentations catalog, and we know our music does really well in the wine country," she said.

After a two-year delay as Higher Octave was acquired by Virgin Records, the two women rekindled talks. The result is a handful of custom-designed Fermentations gift baskets paired with music CDs and featured in Higher Octave's fall catalog. The gift baskets include a $79.95 Shaken, Not Stirred offering with hand-blown Galleria martini glasses, Chardonnay pimento martini olives and one of three Higher Octave CDs, including Brian Hughes' "Shakin', Not Stirred."

The catalog will be mailed to 250,000 potential customers, the label's biggest mailing to date. It's a test for both companies, Wilson said.

"We are both putting our toes in the water," she said.

Already, complications have cropped up. The catalog has been a "fabulous success," Wilson said, but she and Gainer are scrambling to figure out how to handle requests for custom gift baskets, for adding a different CD to a basket or, in the case of a dinner-themed basket, a candle.

It's the kind of challenge Gainer relishes and knows she'll see more of as she tries to think and expand "outside the corporate client box," as she puts it.

"It's thrilling to see these opportunities approach," she said.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

At a Glance

Company: Fermentations Inc.

Owner: Leslie Gainer

Nature of business: Gourmet food and wine gift shop

Headquarters: Cambria

Employees: In 2000, 1 full-time, 12 part-time; in 1997, 1 full-time, 5 part- time

Sales: In 2000, $400,000 (estimated); in 1997, $388,000

*

Cyndia Zwahlen can be reached at cyndia.zwahlen@latimes.com.

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