K&L History Part 2: Building a Business

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Welcome to Part 2 of the K&L story, where we delve into the decisions that kept the K&L boat afloat all these years, and that have made it the unique, multi-faceted enterprise that it is today.

Developing the K&L Niche

In August of 1978, Clyde and Todd opened the Redwood City store, which is still one of the three stores operating today. Thus began the next chapter of K&L, though it was also a canny connection to the past, as the space had been used as a bomber back in the old days. When they opened Redwood City, wine became the front-and-center driver of K&L. Clyde says, “Parkside had been selling Carlo Rossi or Gallo—jug wines—and was 90 percent liquor. So really we slowly changed the business.” In fact, there was a moment when they almost stopped selling liquor entirely. But they ended up hiring some talented people over the years—Susan Purnell, David Driscoll, and David Othenin-Girard—who have helped make it a strong category, and usher K&L into this current era of cocktail and spirits enthusiasm.

Once prices had been deregulated, big box retailers started to get into selling discount booze. Safeway started Liquor Barn, then Price Club followed suit. So Clyde and Todd had to get smart to stay in business. Clyde says, “They could buy a thousand cases so they could undercut us. We couldn’t go head to head with them, so that’s how we got into high end. We got more and more specialized. Started going to Europe in 1982, then 1985 to Bordeaux all the time and started bringing things in direct.”

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The ability to build direct relationships with producers and bring in wines by way of friendly importers made K&L more competitive with other wine retailers. Perhaps more importantly, it also gave us a personal connection to the wonderfully talented winemakers that we champion. We can offer wines from producers we really believe in, who often fall under the radar in the U.S. Clyde says, “This part of the business enabled us to offer better prices and unique bottles. In the 90s, we expanded the business into other regional wines, which complicated things.” Clyde and Todd realized they needed more expert help, so they brought in specialists. Joseph Zugelder was the first, in 1991. He was interested in collections, buying cellars. In 1997 they brought in Greg St. Clair, who’s still with us as our stellar Italian buyer. “I was not interested in Italian wines, and he really made that market take off. Gary Westby came in 2000 as our Champagne buyer. We got more and more specialized with more buyers.”

Making our own Kalinda label was another way that K&L could offer low prices and compete with the big corporate giants. The idea was sparked during a conversation between Clyde and winemaker Bob Pellegrini: “I was talking to Bob Pellegrini one day in the early 80s, and he said ‘Why don’t you have your own label? Then you can compete.’ Kendall-Jackson was just coming out. So I said OK, and we went to taste and blend with Pellegrini. We stuck with it.”

When the next generation, Clyde and Todd’s children, came on board, they brought a whole new set of skills and enthusiasms. “We were one of the first ones to get on the internet—March of 1997. Brian (Zucker) focused on developing software and new computer systems, and Trey (Beffa) honed his skills as a wine buyer. We were one of the first to have a website. We got mentioned in Wine Spectator, Wall Street Journal, etc.” Today, online sales constitute a very high percentage of K&L’s business. Their daughters, Kerri (Beffa) and Molly (Zucker), also have been major factors in the business’s success, with Kerri overseeing events and Molly launching the auction department. Today, there are grandchildren in the mix (though not yet in the business), and over 100 employees. It’s a family company that’s grown in scope and scale over the last four+ decades, but has held onto what it was founded on—friendship and a passion for wine.

Stay tuned for Part 3, in which Clyde geeks out about wine!

- Kate Soto