Joe Waechter came to the CEO role at WineDirect, a Napa-based direct-sales technology company that offers software and services for e-commerce, regulatory compliance, marketing and winery management, five years ago after wearing hats in venture finance and global parcel delivery.
For a decade before that, he was managing partner of California Pacific Capital, a early-stage-funding firm he started. And for 15 years leading up to that, he was president and CEO of DHL Worldwide Express.
In the time since Waechter arrived at WineDirect, the company changed its name from Inertia Beverage Group to WineDirect, acquired major winery e-commerce engine Vin65 and saw revenue soar to $50 million a year from $5 million. The volume of wine sold through its fulfillment, e-commerce and telesales operations has grown at 40 percent-plus annually for the past five years, passing $500 million last year and nearing an estimated $700 million this year.
“In our company, we certainly want to sell our product,” Waechter said. “More than that, we want to sell more wine and more wine online and grow the direct-to-consumer business.”
He is set to speak on the “Routes to Market” panel at the Business Journal Wine Industry Conference on April 24. Waechter spoke to the Journal about the impact of younger consumers shopping for wine online, popularity of third-party resellers and increasing e-marketing savvy of small- and medium-sized wineries.
What are the top challenges for North Coast producers to get wine to consumers?: Winery producers are very familiar with the traditional three-tier [alcoholic beverage distribution] system. As a group, selling online and being good e-tailers and e-marketers is new to them, and they’re learning. Third-party resellers like Wine Access or Naked Wines are very good in reaching wine buyers online. Wineries are taking notice of what’s happening and gaining those skills.
We’ve see online direct-to-consumer sales growing, and there has been a big change in the last several months. In e-commerce, October through December is 40 percent of the business, and January very slow. This year we moved more wine in January to March than in November and December.
Driving it is, first, a good economy. Second, three years ago 9 percent of our orders were through mobile devices, and now it’s 35 percent. Every time I look at it, it’s up a few percentage points. That suggests a younger consumer. Third, third-party resellers like Club W, WineAccess and Naked Wines. Growth from these two places has not been from big wineries but medium- and smaller-sized wineries. They have not traditionally reached consumers but through winemaker dinners and such events, but they are learning how to sell wine online.
What happened in January–March surprised us. Online sales of wine has crossed a chasm, and it is really starting to take off here.
How are wineries learning to sell online?: My mission in life is trying to sell more wine online. We do a roadshow every month in different wine regions of California and go through best practices on selling wine online. UPS joined us in a roadshow recently.
While wineries are learning through efforts like that, many people who thought wine online would never happen are now hiring expertise from outside wine. One of our customers hired expertise from Pottery Barn. Cornerstone in Yountville is killing it in online sales, using geo-fencing and Twitter every hour. Competitors are noting it and starting to mimic that, and good things are happening for them.