NAPA -- Wine e-commerce software developer and provider eWinery Solutions is expanding its headquarters to accommodate a 60 percent growth in revenue and 120 more winery clients in the past year.
An emphasis on selling more wine directly to customers had been growing in intensity in recent years for the profit potential, but "lousy" economic conditions in the past 18 months have made direct sales essential for wineries of various sizes, according to Ron Scharman, chief operating officer.
"That will continue this year," Mr. Scharman said. "All this wine bottled in 2006 with all these boutique brands, where are they going to sell their wine?"
Indeed, industry experts recently have forecast improvement in wine sales and that pricing will come in earnest in 2011.
[caption id="attachment_17912" align="alignleft" width="135" caption="Jon Fredrikson"][/caption]
Jon Fredrikson of Woodside-based Gomberg Fredrikson & Associates told several hundred industry professionals at the Unified Wine & Grape Symposium on Wednesday that a dramatic "reset" to consumer demand for high-end wines has occurred in the past 18 months. Taken together with a significant clogging of already constricted distribution channels and pressure from global competitors and lenders to reduce inventory quickly, a number of wine companies are looking to sell more wine directly to consumers.
eWinery Solutions provides Internet-based software that can manage Web sites, Internet and point-of-sale purchase fulfillment, regulatory compliance, preference-based marketing tools via e-mail and winery visit planners, telemarketing campaigns and allocations from one interface. These services are available as proprietary modules or as information gateways with technology partners such as Napa point-of-sale software developer Elypsis.
Last year, eWinery added features for allocations and winery visits. A module for allocation management was released when it became clear that some boutique producers who previously had sold all their inventory via allocation now were looking for direct-sales functionality such as a Web site shopping cart.
eWinery also formed a partnership with Napa software startup VinoVisit to allow eWinery users to accept reservations for winetasting visits via the Internet and to have consumers tell them more about themselves. As more consumers are doing more information gleaning via smart phones, eWinery plans to release a mobile application this year that will facilitate mobile transactions, as is common for everyday purchases in Japan currently.
[caption id="attachment_17978" align="alignright" width="358" caption="Ron Scharman, COO (left), and Dick Kline, CEO"][/caption]
Started by Chief Executive Officer Dick Kline in 2003, the company grew gradually with working capital from Bridge Bank of San Jose and a business model based on a sliding-scale software cost and flat monthly fees for service modules rather than a percentage of sales. The model, at first a money-losing enterprise, was designed to make it affordable for tiny wineries to start using and for big wine companies to keep using, according to Mr. Scharman.
eWinery Solutions now has more than 300 clients ranging from boutiques making 200 cases a year to large wine companies with millions of cases and dozens of brands. Clients include E&J Gallo, Brown-Forman Corp., Trinchero Family Estates, Far Niente, Araujo and Bryant.
"We're a seven-figure company," Mr. Scharman said, declining to be more specific about annual revenue.