This Wine Company Creates Brands Based on Customer Taste and Ships Them to Their Door

Photo by Maja Petric on Unsplash

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

“Some lunatic mixed Skittles and M&Ms in the same bowl, which do you pick out to eat?”

This question is one of the 5 that the Winc Inc. WBEV website asks you as you get ready to pick out your customized wine box. After completing the questionnaire, Winc recommends 4 wines based on your unique tastes and delivers them to your doorstep.

Winc says this personalized direct-to-consumer (DTC) model has worked incredibly well for it so far. The company reported $55 million in DTC revenues in 2020 and has garnered more than 125,000 active monthly users, most of whom bring in recurring revenue. The interactive component of the DTC platform, on which more than 5 million Winc wine reviews have been made, acts as a source of data aggregation and fuels Winc’s innovative and personal approach to wine sales. 

As a subscription-based wine provider with more than 400,000 bottles sold in the United States this year, Winc has leveraged its DTC platform to build a recurring revenue stream, but this is reportedly only one facet in its sales channel. In tandem with its DTC platform, Winc also integrates its brands into wholesaler networks like WholeFoods Market Inc. and Walmart Inc. WMT. It also acquires premium wine brands like Natural Merchants Inc. to further diversify its product line with top-quality brands.

The DTC platform, wholesale partnerships and direct acquisitions create Winc’s omnichannel approach to sales that it hopes to diversify risk and expand revenue streams.

A Glance at Winc’s Omnichannel Strategy

First, Winc aggregates data off its DTC network and researches current trends to create a brand that consumers have expressed an interest in. Then, it creates the product and places it on its DTC platform, compiling reviews and sales to monitor performance. Finally, market winners are amplified through press releases and partnerships with retailers like Target Corp. TGT while poor performers are pruned out or tweaked.

A look at the performance of the process’s products can paint a picture. The Summer Water brand, for example, has garnered a gross profit return 32 times greater than its average development cost. On average, Winc reports that each brand boasts a gross profit 4.6 times greater than its development cost. The process takes approximately 2 months to get from bottle to consumer and poses costs significantly lower than industry standards.

Most significant could be the process’s simplicity and repeatability. Winc says the process can spit out a theoretically unlimited number of concoctions and brands, and it can do it cheaply and efficiently. Upheld by the industry’s low brand turnover and high barriers to entry, Winc’s brands produce recurring revenue streams and are poised to grow by 1 to 2 brands a year. 

Winc also achieved wholesale revenue growth of 90% in the first half of 2021 when compared to the first half of 2020. A look at a larger time frame shows a similar picture: Winc garnered 66% year-over-year growth in wholesale depletions, 75% omnichannel volume growth and 88% total omnichannel revenue growth in 2021.

Staying true to its omnichannel approach, Winc is now looking for growth strategies through wholesale-retail partnerships with Amazon.com Inc. AMZN and Instacart and acquisitions in the highly fragmented wine market.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.