From small startups working in niche sectors of the industry to large companies trying to revolutionize direct-to-consumer alcohol sales, many wine-focused tech companies have come and gone over the past year.
The complex landscape of U.S. alcohol sales presents undeniable hurdles for any wine-tech company looking for funding. And recent spikes in inflation and economic uncertainty have only compounded the issues facing these companies.
This year also saw the release of the much-talked-about Silicon Valley Bank 2022 State of the U.S. Wine Industry report that detailed the decline of wine sales among millennial consumers. As millennials mature and Gen Z reach legal drinking age, the tech-obsessed younger generations have made it clear that there’s a disconnect between themselves and the wine industry that, in some ways, feels stuck in a bygone era.
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While consumer wine-tech continues to face many hurdles, some recent startups have found ways to meet millennials and Gen Z consumers where they are, proving that opportunities exist for wine to thrive in today’s tech-first marketplace. From investing in wine by way of non-fungible tokens (NFTs) to discovering small producers on a curated marketplace, SevenFifty Daily spoke with the companies who are embracing technology in order to engage with younger wine consumers.
Wine at Your Fingertips
When Jonathan Shapiro launched Vine Drop back in 2020, the idea was inspired by his healthy lifestyle of buying organic foods, exercising, and being mindful of his alcohol intake. A longtime fan of wine, but by no means an expert, he wanted to create an opportunity for everyday wine drinkers to have access to unique natural wines. “I’m a huge fan of Gary Vee (Vaynerchuk) and his company Wine Text,” says Shapiro. “The [Wine Text] business model is simple: you receive a daily text message that features one bottle of wine, and you text back if you want to buy it.”
For Shapiro, he knew that natural and organic wines existed, but there wasn’t a wine marketplace that focused solely on those styles of wine. “With the trend toward millennials wanting to drink more responsibly and to have more of an idea of what was in their wine, natural wine being a focal point for Vine Drop only made sense,” Shapiro recalls. The company’s in-house sommelier, Holly Berrigan, curates the daily selections of wines from all over the world, which are priced from $18 to $40 with a sweet spot at $25.
After experiencing month-over-month sales growth over the last six months, Shapiro thinks what attracts customers to Vine Drop is the ability to order only so many bottles via text message. Inventory is limited, so customers have a short window of time to place an order. Once a reply text is sent, an order is placed and customers receive wine notes that are upbeat and make drinking wine fun and approachable.
“It’s not an overwhelming shopping experience, which can often happen walking into a big box store or even a wine shop,” says Shapiro. “Millennials appreciate the ability to obtain things on-demand, and Vine Drop offers convenience and exclusivity.”
For Scoperta! Wine, an online marketplace that offers wines from boutique wineries, the goal is also to make finding new styles of wine simple and enjoyable for consumers. Since launching at SXSW earlier this year, Scoperta! (which means ‘discovery’ in Italian), has curated wine selections from all over the country in an effort to expand the palates of consumers at every level. Dan Pilkey, the chief wine officer and sommelier, is responsible for tasting through numerous wines, and choosing which bottles will be featured on the website. “The beauty of working with small producers is knowing that you’re going to get quality wine and attention to detail in the product,” he says.
As a marketplace, Scoperta! doesn’t need to adhere to the liquor laws by state, rather they serve as a liaison between the consumer and the winery, and the winery ships orders directly to the consumer. “We facilitate marketing and technology to complete the transaction,” says Pilkey.
As for drawing in new customers, Craig Bell, the cofounder and COO at Scoperta!, believes that storytelling is key. “We’re big fans of good people who make good wine,” he says. “Our goal is to not only tell the stories of the people behind the wine, but to utilize e-commerce for smaller winery owners to help level the playing field.”
The Science Behind the Consumer Palate
When Katerina Axelsson worked as a chemist for some of California’s largest wineries, her goal was to solve some of the biggest problems that she saw in the wine industry, ultimately believing that consumer preferences could be better understood by looking at the chemistry of wine.
As CEO of Tastry, a sensory sciences company that uses advanced chemistry, machine learning, and AI to match consumers to products they love, Axelsson’s goal is to use science to bridge the gap between winemakers and wine lovers. Using the company’s unique flavor and analytical chemistry methodology, Tastry has identified well over 100,000 palate preferences based on a tasting survey, which helped match consumers with corresponding wines. “We help wine lovers to accelerate the exploration process and get what they’re going to like much more quickly and more often than any other method,” says Axelsson.
Working directly with retailers and wineries, Tastry has also created a quiz that can be deployed via website, app, or QR code in order to obtain consumer preferences that help to drive the most accurate matches. “The idea is just to minimize the friction wherever you are buying wine, and to make the shopping more intentional,” she says. According to a recent Tastry case study, O’Neill Vintners saved almost $30,000 using CompuBlend—Tastry’s proprietary scientific tool that helped create a wine blend that was cost effective and targeted to its consumers.
Axelsson also believes that millennials love to be catered to, and they value the experiential. More than their predecessors, Axelsson believes millennials are less likely to be brand loyal because of their varied interests and desire to support cause-driven companies. “Our goal is to increase transparency between consumer preferences and what winemakers are doing, so that consumers don’t waste their money or time on bad experiences,” she says.
Similar to Scoperta!, Tastry aims to level the playing field for consumers, retailers, and wineries, connecting consumers to wines that may be overlooked. As Tastry moves forward, they will focus on increased transparency, more access, and expansion. “We want to minimize the risk of you wasting your money on a product that you’re not going to like,” says Axelsson.
The Future of Wine Investing
The world of web3 and blockchain doesn’t seem like a place where wine could thrive, but Club dVin (pronounced dee-vin) is making exploring and investing in fine wine a communal experience. While some millennials might not be ready to explore the world of luxury wine, Club dVin is encouraging wine lovers all over the world to experience wine collecting in a hybrid format—with an online community and in-person events.
Cofounder David Garrett, a 20+-year veteran in the tech, wine, and finance industries, launched Club dVin in January 2022 with Brian Feuer as a way to shape the future of wine. “I’ve long been a fan of the direct-to-consumer model as well as building community,” says Garrett. Back in the early 2000s, Garrett created a system that facilitated American visitors buying wine in Mendoza, Argentina, and then retrieving it once they returned stateside. Several years later, the idea for creating NFTs for wine came from seeing the diamond industry establish digital twins for some of the most coveted jewels on the planet.
“I kept thinking, what if we could do the same thing, and make digital twins for wine?” recalls Garrett. “People know what NFTs are and they’re curious about them. We can actually have a really interesting consumer angle that includes community, branding, and data collection.”
Many of the wineries that Club dVin works with are collectible, investment-grade producers, which means they have a high-value customer base. “When we ask them what they’re the most worried about,” says Garrett, “invariably, they say it is not understanding the next generation.”
Garrett recognizes that millennials and younger generations value their digital identity as well as experiences, and Club dVin addresses this in two ways: through tasting tokens and digital corks, which establish an authentic proof of experience.
“Our goal is to help consumers to visualize wine, build connections around brands, and to connect the winemaker to the consumer,” says Garrett.
Currently, Garrett says the company is in discussion with a prominent restaurant group to expand the Club dVin experience. “In five to ten years time, I believe every wine will be considered collectable because it will have an NFT.”
From user-friendly mobile apps and websites that make purchasing quick and easy, to packaging that includes a QR code with product information, new opportunities are still being discovered for wine companies of all sizes to expand their digital imprint to draw more millennial consumers.
Dispatch
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