Russ: This is The BusinessMakers Show, heard here and seen online at thebusinessmakers.com. It's guest time on the show, and for those of you who are watching online, the video online, can tell I'm not in an ordinary interview setting at all, because I'm at the new Tasting Room at CityCentre, and my guest today, who is also a former guest on the show, is the founder and CEO of Lasco Enterprises, the company that runs and operates and owns The Tasting Room, Jerry Lasco. Jerry, welcome back to the BusinessMakers Show.

Jerry: Russ, it's a pleasure to be here.

Russ: The Tasting Room experience has always been in my opinion a major success story, but my goodness, this new one seems to be truly extraordinary. Tell us our listeners about The Tasting Room at City Center.

Jerry: Well thanks, I appreciate the initial vote of confidence. We've wanted to come into City Center because this area of Houston is really booming. In fact, somebody told me recently that the longitudinal center of Houston is Beltway 8, so this is now the new epicenter. So we've grown with that and we love the Center and everything that it's doing. But the opportunity to come here, it was a fairly large space and it was a great opportunity to create the patio and the outdoor space, but it presented us with some challenge. We felt like if we were going to try to replicate something as large and, you know, frankly as successful as our Uptown Park location, we wanted to truly focus on making it a flagship. So we wanted to bring food front and center, we brought a wood-burning oven right out in the middle of the bar. We wanted a huge patio, 'cause Houstonians, you know, love to be outside whenever they can get away from the air conditioning. And we wanted a great indoor space that showcased all of our wine. So those were the three criterias that we wanted to do, and hopefully everybody feels like we've accomplished that goal.

Russ: Okay. Well, and it's larger than the uptown Tasting Room, correct?

Jerry: Yeah. Total square footage for seating area here is 13,500 square feet.

Russ: My goodness.

Jerry: So it might be the largest wine bar in the world.

Russ: My goodness. Okay. Well, speaking of the largest wine bar in the world, I recently came across a statement that just blew me away, and that was that The Tasting Room, your other very large Tasting Room in Uptown Park, serves more wine by the glass than any wine bar in the world. Is that right?

Jerry: That's what we're told by our distributors. And, you know, combined in Houston last year we sold about a million glasses of wine.

Russ: My goodness. Well, from a businessperson's perspective that's pretty cool. I know you're offering it sort of as a convenience to your customers, to be able to taste some real fine wines by the glass, but boy, from a profit margin perspective you can't - it doesn't get much better than that, does it?

Jerry: No, that's - that really is what we're looking for. And when we hit that point of economies of scale it worked for both the customer and us as the business owners, because we could afford to have enough opportunities out there, enough bottles of wine that we could present by the glass because we had enough customers in their drinking it, so we weren't getting stuck with a lot of half-empty bottles.

Russ: All right. Okay. Well my goodness, so I roll back, it was June of 2006, our episode 55 of the BusinessMakers Show. You and your partner, Jonathan Horowitz, were on the show at the time, and even at that time we were already sort of sensing the success of this formula, the Tasting Room formula, which, you know, from sort of a startup businessperson's perspective was very impressive, because we all kind of have been told that starting a bar and a restaurant is one of the most difficult businesses to start with one of the highest failure rates, and you guys just seem to be knocking down all the barriers and continue on. Has it been a piece of cake the whole way or have there been challenges?

Jerry: No, you know, absolutely not a piece of cake-

Russ: Okay.

Jerry: -and plenty of challenges along the way. So we're coming up on eight years that The Tasting Room in Uptown Park is open. It'll be eight years this late summer. That location started off as 900 square feet and two employees, myself and my sister-in-law opened and closed the place, bartenders; we were the managers and the dishwashers.

Russ: Okay.

Jerry: So we had a good following, a really loyal crowd that enjoyed what we were doing, and that crowd still is with us today; I'm running into those people every day and it's really cool going back and talking about old times, when it was two people running a place and then, you know, a handful or a dozen customers.

But we expanded, we grew organically as demand, you know, Uptown Park was a five different iterations of that location, five little baby steps towards its size right now. So I think our growth rate and pace was on par for what we needed to do, but we had to figure out along the way how to do it, how to make money. You know, trying to make money in this business is very difficult because our margins are really low. If people go to, you know, their local wine shops or, you know, the big boxes, the big liquor stores, they'll see wine at a certain price and that's in their head. So when they come here, you know, one of our rules is anything that we have on premise can't be more than twice what the cheapest price in the country is retail.

Russ: Okay.

Jerry: So, you know, back in the day restaurants had three, four, and five times markups.

Russ: Oh yeah. Oh yeah.

Jerry: We're less than two, which is hard, and we have to do a high volume to make that work.

Russ: Right. I so distinctly remember the interview, which is really almost five years ago now, because here your partner Jonathan at the time was a practicing lawyer who was giving up his practice to do this. And you were already down the path a bit of giving up your pilot's license. You were a commercial Continental Airlines pilot, correct?

Jerry: That's correct.

Russ: And both of you seemed to really be interested in getting into the food and the beverage business, you, along with your wife, Laura. And my goodness, so today you don't even think about flying an airplane, Jonathan doesn't practice law anymore, and you've brought on more higher level executive staff as well. Correct?

Jerry: That's correct. And the caveat is no one said we were smart, but we were passionate about what we were doing and maybe a little foolish and a little crazy. But we worked hard, and it's, knock on wood, it's working out so far.

Russ: Well, I remember too the description then of what caused the success was this sort of commitment to real customer-focused staff, which, you know, any successful business needs. And then also there was sort of this unique experience that you tried to bring to consumers, a unique wine experience. Has that sort of stayed consistent or has the formula kind of matured over time as well?

Jerry: No, that's absolutely consistent. I think it's the backbone for everything we do, is that the guests - we consider people that walk in the door our guest, just like if you walked into our house. The guest has to have an exceptional experience. In fact, that's our mission statement for our company. So customer service has to be great. We try to go above and beyond; we allow people to try products. One of our mottos is "Try before you buy." Don't let us tell you what you like; you don't want us telling you that you like Brussels sprouts if you don't like Brussels sprouts. So why should we tell you you're going to love Merlot if you don't like Merlot, right?

Russ: Okay. Absolutely.

Jerry: And, you know, we try to give people a lot of opportunity to just taste different wines and learn about wines. We're constantly having dinners, winemakers in, special tastings. We look for any excuse in the world to have a festival. We've got Paella Festivals going on right now. So we just like to have fun and spread that fun with our guests and friends.

Russ: Great. Talking with Jerry Lasco, the founder and CEO of Lasco Enterprises. And we'll be back with more with Jerry after this. You're listening to the BusinessMakers Show, heard here and seen online at thebusinessmakers.com.

Russ: This is the BusinessMakers Show, heard here and seen online at thebusinessmakers.com. And continuing on with Jerry Lasco, founder and CEO of Lasco Enterprises. Now, Jerry, you mentioned food already playing a big role down in The Tasting Room. I think I've seen that sort of grow over the years. Tell us about the food history at The Tasting Room.

Jerry: Well, The Tasting Room started off serving wine, focused on wine, but we also had some cheese plates and bread. But as I said, we had two employees, so if I was behind the bar serving you wine and you wanted a cheese plate, there was a good chance that I had to say, "Watch the shop" for a second and I went back in the kitchen and cut up a little cheese and some bread and came back and then topped off your wine for you.

Russ: Okay. So it was you and a cheese plate ______ ______.

Jerry: That's right. That's right. It was at the simplest elements. Like literally coming into somebody's home.

Russ: Okay.

Jerry: But through the years we've grown that, and Uptown Park now has a great food program. Of course, we had the Max's Wine Dives, where we've got some great chefs. And it's funny, because along the way we've been kind of a minor league or, you know, major league even for great chefs. A lot of our chefs have started out with us and spent, you know, several years maybe going from Uptown Park Tasting Room to Max's Wine Dive, then they've gone on to run their own restaurants or work for high profile executive chef positions in town. And we enjoy that; it's fun seeing the talent out there.

Russ: Sure.

Jerry: We're really passionate about food and wine, so we like to bring in people who are also passionate about it. And if you get a chef that's passionate about food, it's likely they're going to have some great success.

Russ: All right. Well, and I'm under the impression this guy you have here, Michael Kramer, is really a big catch for you. You recruited him from out of town, correct?

Jerry: Yeah, that's right. Michael Kramer has had a great reputation; he's worked from East coast to West coast, worked here in Houston at a really high-profile restaurant, and is onboard right now, working on our culinary program.

One of the things we wanted to do with this location is bring food front and center. So I said when you walk in the door I want people to see fire, I want them to smell, you know, roasted garlic and pizzas coming out of this oven. So we brought in this huge pizza oven, this Italian pizza oven. We sent Kramer and his sous chef to study traditional Neapolitan-style pizza-making, where they import a special dough, special sauces. And this oven gets up to about 1,000° and it can knock out a pizza in about 90 seconds.

Russ: Wow.

Jerry: Little crust on top, little burnt edges. So it's really neat.

Russ: Cool. Cool. But still could one come in here and order a complete meal, or is it, you know, primarily sort of hors d'ouvres and food design to go with the wine that they would be drinking?

Jerry: Well, it's a very broad menu. We want to be flexible for all of our customers, whether you want to come in here and have small bites with - we have a charcuterie bar, so there's a glassed in case next to the charcuterie bar with this beautiful Italian marble up there, and there will be chefs there. So you can come sit there and they'll cut house made salamis, varies meats that we import, great cheeses; they'll make it right in front of you, it's really neat. We've got the big pizza oven, but we also do a lot of dinners and we have a dining room for people that want to come and have a three or four-course meal.

Russ: Okay, really cool. Now, you know, when you talk about food, I know you probably dived in headfirst with your Max's Wine Dive formula. For those that don't know about Max's Wine Dive, why don't you describe that setting for them?

Jerry: Well, with Max's Wine Dive we wanted to replicate this whole dive bar feel. And when I say "dive bar" what was in our minds is a place where you feel really comfortable, where there's a jukebox and it's playing the music that you like to hear, you know all the words to the songs, you belly up to the bar. But instead of the buckets of beer and peanuts on the floor, we thought why don't we just mix that in a juxtaposition atmosphere with great wine and great gourmet comfort food? So we took foods that everybody knows, like fried chicken and burgers, you know, things that you love from your youth and you crave, and we just got the finest ingredients, everything's made from scratch. And I mean everything; we make our own catsup, we make our own mustard. There is - you know, the Max's Wine Dive doesn't even have a walk-in refrigerator, everything's delivered fresh daily and they make it from scratch. So it's really, really a fun concept.

Russ: Jerry, it sounds so progressive for somebody who just decided, "Hey, I want to get into the restaurant business and the wine business." Max's Wine Dive is, that formula's working well for you as well, right?

Jerry: It's been fun. We've been expanding; we're now in Houston, Austin, and San Antonio, soon to be Dallas. So we want to touch every Texan and then we're going to try to take it across the country.

Russ: Okay. So when you say that are you talking strictly about Max's Wine Dive, or are you talking about The Tasting Room as well?

Jerry: Well, we're not sure about The Tasting Room. The Tasting Room model is very complicated in the fact that it's gotten very large, a lot of moving parts. One of our, you know, latest two Tasting Rooms, the Uptown Park's latest rendition and this location, they each have anywhere from 75 to 100 employees. So taking it across the country, you know, is a little bit daunting. So right now we're just happy to be in Houston.

Russ: All right, so the Max's Wine Dive is the formula that works real well in expansion in your opinion, right?

Jerry: Yeah, we think it does. Now we are looking to be company-owned. We've put a lot of effort over the last eight years into creating our management team, putting systems in place, getting a corporate culture. We've got that in place now; we have about 300 employees, we have an executive team. So we want to exercise the talent that we have onboard and open more restaurants.

Russ: Okay, now you said company-owned. I remember five years ago we talked about, you know, the franchising potential. I assume there is no Tasting Room or Max's Wine Dive franchise in operation today?

Jerry: That's correct.

Russ: And is that still discussed?

Jerry: Well, we really don't discuss franchising with those two concepts. We like to keep those in-house. However, it's an entrepreneurial company, so we're always bursting at the seams with ideas, "Why don't we do this? Why don't we do that?" Some of those ideas we think are great, and if they're simple enough and small enough, because I think that's the trick of a great franchise, it's got to be repeatable, trainable to individuals that don't necessarily have eight years of experience, you know, doing it. And we think we might have a couple of those that we may try that concept out.

Russ: So we just need to keep our eyes open and keep reading the newspapers and finding out what's next for Lasco Enterprises.

Jerry: That's right; always let you know first.

Russ: Really cool. Really cool. So I mentioned a while ago this aspect of you serving more wine by the glass than any other wine bar in the world. There's a real neat machine that you have here at the new Tasting Room that I want to go out and we'll do the next piece of this interview right in front of that machine. How about that?

Jerry: Sound great.

Russ: All right.

Jerry: Sounds good.

Russ: Talking with Jerry Lasco, founder and CEO of Lasco Enterprises, and we'll be back with more with him after this. You're listening to the BusinessMakers Show, heard here and seen online at thebusinessmakers.com.

Russ: This is the BusinessMakers Show, heard here and seen online at thebusinessmakers.com. And continuing on with Jerry Lasco, founder and CEO of Lasco Enterprises. And we're here in the new Tasting Room in City Center. We've moved out to the bar area, and this is sort of something that really caught my attention. First of all, the fact that you sell more wine by the glass than any other wine bar on the planet was impressive to me, but that can also sort of be a problem. You could probably sort of have a crowd gathered trying to get a glass of wine, and perhaps this machine helps satisfy that?

Jerry: Well it does. This machine is pretty neat, and the gist behind this machine is to have something for our higher-end customers.

Russ: Okay.

Jerry: So this is called an Enomatic system, and particularly this is the Enoround. And there are 16 bottles of wine in here that are all higher-end bottles of wine; you might recognize the Penfold Grange or the Gaya. So for the higher-end customer that may want to invest in a couple, few hundred dollars in a bottle of wine, this is great, 'cause you can get a taste of it at the perfect cellar temperature.

Russ: Right.

Jerry: We can actually program, you know, a digital number of 61.5° if we wanted, and accuracy on how we wanted the temperature to come out.

Russ: By bottle or by the whole machine?

Jerry: Well, by section of the machine.

Russ: Section, okay.

Jerry: So every few bottles. There's white wines in here that are going to be colder; there's red wines that we want to be at a specific temperature, and they're all protected with an argon gas, which is the highest level, most expensive gas you can do, but it's completely inert and it just keeps a nice, think layer over the wine so that no oxygen affects it. So the wine is in a vacuum and it doesn't age at all.

Russ: Right. Am I reading this right? That this bottle, for a glass of this Penfold Grange it's $135.00, right?

Jerry: That's correct. And for a taste of it it's about $33.00.

Russ: Okay.

Jerry: And we've already sold off some of this wine and people have come in here and they said, "You know, this is wonderful, 'cause this is one of my favorite wines, and I've been to Australia to the winery and they charge $50.00 a taste," right there in Australia.

Russ: So a discount taste.

Jerry: So it's discounted.

Russ: And so how do you operate the machine? I mean I don't see a place to put my quarters in or my dollars.

Jerry: Well, it's a little more advanced than the old cigarette machines. But you go to the bar and you purchase a card, and that card is charged with a certain amount of money on it. Let's say you put $50.00 on that card. Then you slide your card in the machine and you hit one of the digital LED displays for either a taste, a half-glass, or a full glass, and then you're off to the races. And you can keep coming back and choosing the wines you want. It's great for people that would like to try several different wines.

Russ: Right. Now, Jerry, I've been in several wine bars other than yours in my life and I've never seen one of these. This isn't very common, is it?

Jerry: Well, this is their newest creation, and I'll admit it's a bit expensive.

Russ: Right.

Jerry: Behind the bar we have 32 other selections that are in a bit simpler machines, but they have the same technology; the wine is stored perfectly, they're at the perfect temperature, but only the bartenders can serve it for you.

Russ: Okay. Okay.

Jerry: So you can still get a taste, a half-glass, and a full glass for 48 different wines here.

Russ: Okay, now you just - we haven't said this yet, but you've just been open here at City Center for a matter of days. Have people actually come up here and bought glasses and tastes of wine?

Jerry: This has been extremely popular. It's been our number one selling - number one salesperson every night since we've been open.

Russ: Oh goodness. All right. Well look, before I let you go I want to remind our listeners and viewers right now that the BusinessMakers is celebrating our 300th episode and we're going to do it right here at The Tasting Room on Thursday, March 10th in the area back here reserved for parties. And we really appreciate you hosting that for us and we think it's going to be a major event and would love everybody to attend.

Jerry: Fantastic, Russ. Well, we're big fans of the BusinessMakers and we're glad to be on the show and we're excited to have the party for your 300th episode.

Russ: All right, Jerry. Thanks a lot for having us here today; we really appreciate it, and we're going to keep following your success.

Jerry: Our pleasure.

Russ: You bet. That's Jerry Lasco, founder and CEO of Lasco Enterprise. And you've been listening to the BusinessMakers Show, heard here and seen online at thebusinessmakers.com.