Wednesday, March 1, 2017

Warby Parker of Wine?

In our discussions of DTC models in the wine industry, I have been surprised that we have not touched much on the changing tastes of younger consumers and the ability to potentially construct a brand that identifies more with this rising class of wine drinkers.


There seem to be dozens of startups aspiring to be the “Warby Parker of X”, taking on big incumbents in traditional industries by: (1) eliminating unnecessary steps in the supply chain and capturing/passing along that margin, (2) creating high quality, unique, stylized product shipped directly to the consumer (providing both savings and convenience), and (3) identifying with the younger consumer’s desire to feel good about the product they are buying – namely through sustainable sourcing and cultivating a brand image of “caring”, whatever that may look like (Warby Parker, for example, sends one pair of glasses to a person in need for every pair sold through its normal channels). 

Similar models have been proven in other retail categories: Tom’s shoes and Everlane being prime examples. I question why we have not yet seen examples of this in wine. I would think the online wine retailers of the world looking to attract a new wave of “world-positive” consumers would be actively trying to engage them with “fair trade” wine, sustainably sourced wine, or something of the sort. Granted, good wine takes much higher levels of expertise and effort than shoes, glasses, or coffee. Some wineries have already been drawn to organic or biodynamic farming, but I think a brand that has already built a strong DTC presence, like either Cameron Hughes on the production side or Vivino on the marketing side, could attract a new set of customers through something like: for every bottle of Lot 606 Chardonnay we will ___ (you fill in the blank: plant one tree, donate X% of proceeds, etc.). You wouldn’t have to touch the quality of the wine, just show that you care. Whether or not you actually do, caring sells these days. 

3 comments:

  1. Chris, I have a (I think) fascinating story to tell you about a one-for-one granola company I advised back in Dallas. Everything about the start-up was going well, until the company faltered as a result of founder conflicts and the whole parade came to an abrupt end. Happy to discuss sometime, but I would generally agree that "caring sells" but it still has to clear all of the usual hurdles faced by a small business trying to scale.

    [Short bloggage (blog coverage?) written at the height of my involvement with Impact Foods: https://bitesofdallas.wordpress.com/2012/12/12/a-granola-that-makes-a-sizable-impact/]

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  2. I found an extreme example of what you're describing: a Napa winery that donates 100% of its profits to charity*; but to your point, I couldn't find any for-profit entities with a social responsibility angle. I've often wondered why wine companies don't take the "job creation" angle, hyping their employment of local farmers (maybe even former subsistence farmers?) in emerging markets.

    * http://www.c3wineco.com/napa/

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  3. I promise this is the last comment I'll make today that references Naked Wines (I'm basically an uncompensated brand ambassador at this point).

    While Naked Wines isn't exactly focused on social responsibility per se, they fit the three characteristics you lay out: (1) they eliminate the wholesaler level of the supply chain, and can eliminate the retailer by shipping DTC in 43 states. (2) They only sell wines produced by the small wineries and winemakers that NW funds, which makes for a unique product offering. And NW is exclusively online / ships directly to the consumer. (3) NW consumers (called "angels") can feel good about their purchases because their monthly payments help support the small vineyards and winemakers. This crowdsourced business model cultivates a "caring" brand image - support the moms and pops of the wine world, while cutting out the evil / greedy wholesalers.

    If NW wanted to continue down this path, I could see them offering cases of purely organic / sustainable / biodynamic wines. The ultimate "feel good."

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