NWINF - Naked Wines Offers Members Up To 60% Lower Prices On Wines – CEO Nick Devlin Explains The Industry Disrupting Business Model That Makes That Possible
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This month, NakedWines (OTCMKTS: NWINF) CEO Nick Devlin sat down with Benzinga’sJordan Robertson to discuss Naked Wines’ unique business model thatbrings consumers closer to the winemakers producing their favoritebottles and how that business model is disrupting the wine industry.Here are some of the key takeaways from the interview.
How The Naked Wines Business Model BenefitsCustomers
NakedWines operates on a kind of membership model. Customers—referred toas Angel investors (or simply “Angels”)—deposit $40 into theirNaked Wines account each month that they can then put toward buyingwines that are shipped directly to their homes. This is, in Devlin’swords, “the world’s largest purely online direct-to-consumer winecompany.”
Inaddition to offering a purely online option for buying wines to itsmembers, those monthly deposits from Angels help Naked Wines providethe upfront funding independent winemakers need so that they canconcentrate solely on making wine.
“We connect over 900,000 members, including over300,000 here in the states with 250 passionate, talented independentwinemakers,” Devlin told Benzinga. Angels can follow their favoritewinemakers on the platform, leave feedback, and rate the wines theybuy.
The directpartnership with independent winemakers allows Naked Wines to sell tomembers at a significantly lower cost than consumers would see for acomparable bottle at a store.
“When you buy a bottle of wine at your localliquor store, that’s the third time that wine has been sold. As aconsequence, Americans pay more for wine than consumers anywhere elseon earth,” Devlin said. Distributors buy wine from the producer,then sell it to liquor stores at a markup to generate a profit. Thosestores, in turn, sell the wine to you at an additional markup. By thetime you’re buying that bottle, the price tag will be at leastdouble the amount the producer was paid.
“At Naked Wines, we flip all of that andchange it completely,” Devlin told Benzinga. “We connect youdirectly to talented independent winemakers. We cut out all of thosemiddlemen. We get out of the way and the result is you get amazingquality wine. You know the person who made it. You get all of that ata much better value.”
By partnering with wine producers and then selling directly toconsumers, Naked Wines cuts down on the number of times a bottle issold before it reaches the consumer. “When you take out a bunch ofintermediaries, in terms of distributors, you also touch the productless and it’s a more efficient system all around,” Devlin said.“On average, our members receive between a 30% and 50% discountcompared to the price of comparable quality products in their localliquor store.”
How The Naked Wines Business Model BenefitsWinemakers
Thewine industry today is heavily consolidated, making it a tough one forsmall, independent producers. In the United States alone, there are11,300 wine producers nationwide as of 2021, but just the top threeaccount for 57% of domestic-produced wine sales by volume. When you move to thedistribution side, that bottleneck continues with the top three winedistributors accounting for about 65% of revenues.
That consolidation makesit tough to compete for the grapes winemakers need to make great winesand the retail shelf space they need to sell them, especially if theydon’t have the resources to invest in bottling, distributing, andmarketing at scale.
That’s where Naked Wines comes in. “We help our winemakersin a number of different ways. We provide them with the financialsupport and security to enable them to put in place long-termcontracts, get access to the best fruit, make the best winepossible,” Devlin explained. The online wine company also handlesmuch of the logistics for its winemakers, including bottling andsales.
Independent winemakers get the upfront capital they need tomake great wines as well as the logistical support to bottle and sellthem. Consumers get access to a wider variety of high-quality winesthat might not have been possible in the traditional distributionmodel – at a fraction of the price.
What’s Next For Naked Wines?
Lately, Devlin said the company has beenfocused on expanding its range of wines, especially at higher pricepoints where Naked Wines has noticed a lot of change in terms of howconsumers buy those special occasion wines. “We launched a series ofluxury wines from amazing winemakers: people like Rudy von Strasser,who was one of the founding fathers of the Diamond Mountain AVA[American Viticultural Area] in Napa and Dan Baron, the former headwinemaker at Silver Oak to give our members access to an even broaderrange of choices,” Devlin said.
Going into next year, Naked Wines plans to launcheven more new products while also working on getting its story out andbuilding its member base.
Right now, investors can get their first six-packof wine for just $39.99 including shipping by using this voucher for $100 off.
Powered by the belief that great wine shouldbe an everyday pleasure and not a privilege, Naked gives talented,world-class winemakers the creative and financial freedom to makewines that inspire – supported by a community of passionate winedrinkers. Naked’s customers, known as Angels, fund exclusivecollaborations with over 180 worldwide independent winemakers likeDaryl Groom (former; Penfolds Grange) Daniel Baron (former: SilverOak) and Camille Benitah (former: Merus) and Jean Philippe Moulin(former: Rothschild). A virtuous circle is created where everyone isbetter off; customers get better wines for their money; and winemakerscan focus their time in the winery, not on distribution andsales.
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