Naked Wines is bringing to Australia the same promise with which it enticed British drinkers: stripping anything that stands between you and the wine.
It’s a name that might allure some and offend some but Naked Wines comes with a clubby online-only business model that has, well, tousled the U.K. market.
In three years of U.K. operations, Naked Wines has doubled revenues each year and currently nets over 20 million pounds, and probably fancies its chances even more in the Australian market.
Innovation is key
Founded by South African Rowan Gormley, Naked Wines is being brought Down Under by Luke Jecks, a wine industry veteran who worked with Gormley at billionaire Richard Branson’s Virgin Wine.
Jecks is launching Naked Wines with $1.5 million to cut sweet deals with winemakers, and choice words for the supermarkets that he alleges have undermined both consumers and winemakers.
The likes of Woolworths and Coles have cornered 60% of sales and “having beaten each other up on price and market share they are now trying to increase margin” by pressuring “farm gate price,” Jecks told Anthill.
While winemakers are getting squeezed, the heavily consolidated market and a push to “own brands” mean less “true” small and boutique wines for the consumer, he adds.
Naked Wines considers its model to be a saviour. But what exactly is this?
It says 50% of the final cost of a wine has nothing to do with its quality, or in the making of the wine. So Naked Wines plans to win preferential prices from winemakers. To the other half of the business, comprising sales, marketing, finance and much more, Naked Wines expects to bring new efficiencies. This will come primarily from its online-only sales mode with preferred customers (called Angels) also paying a monthly fee of $40.
The model has its critics but last year, Naked Wines won the International Wine Challenge award for innovation. It allows the company to leverage social networking and other technologies such as an algorithm to match wine drinkers with similar tastes. Customers also can build profile, find drinking buddies, upload content and integrate their ratings with their Twitter and Facebook accounts, Jecks said.
“Our own site and app are crucial,” says Jecks, pointing out that the company already has iPhone and Android apps with videos, tasting notes, deals allowing users to chat to the winemaker.
“We are all about customers and winemakers interacting and more importantly making purchase decisions based on what either a customer says or a winemaker says rather taking our word for it,” he says. “Facebook allows the conversation to continue on other social mediums and for a wider audience to see the conversation and hopefully join in.”
Over the next 12 months, Naked Wines plans to have funded and established 20 Australian winemakers. It already has named three:
- Sam Plunkett from the Strathbogie Ranges of Victoria who made 2010’s “Best Shiraz in Australia” and also set up his own label “The Butterfly Effect;”
- The husband and wife team of Rebecca and Adrian Santolin from Yarra Valley who fancy a label called “Boy Meets Girl;” and
- Brian Fletcher, a pioneer of Margaret River who plans his own label.