Wine Sense: Online Wine Sellers Target Millennials

A new breed of online wine seller aims to attract younger consumers.

Naked Wines, founded by CEO Rowan Gormley (pictured), allows consumers to directly fund production of wines in exchange for a discount on bottle purchases.
Naked Wines, founded by CEO Rowan Gormley (pictured), allows consumers to directly fund production of wines in exchange for a discount on bottle purchases.

Online wine retailers catering to millennials are on the rise, with several gaining traction by taking a unique approach to presenting and selling wine. These websites rely on peer recommendations and casual language to promote their selections.

“We want to make wine approachable and fun, which is how we think it should be,” says Xander Oxman, CEO and cofounder of Club W. “It’s all about breaking down the barriers that exist for millennial buyers around buying wine. We want to get away from the pretentiousness.”

Wine Awesomeness has a different business model but a similar goal. “We’re a young, rebellious wine company definitely geared toward entry-level and intermediate wine drinkers,” says cofounder and CEO Logan Lee. “Millennials are on the cusp of becoming the largest wine-drinking generation ever, and we see a big opportunity to speak to those consumers.”

With Club W, customers can choose to purchase wines individually from the website or join the wine club (pricing starts at $39 for three bottles a month, plus $6 shipping). The company offers personalized wine recommendations based on a taste quiz that consumers take online. “The recommendations are a huge part of our concept,” Oxman says. “We make recommendations based on things they’re familiar with, such as rating wines on a five-star scale and making suggestions using a Netflix or Pandora-style algorithm.”

Wine Awesomeness also has a club component, where wines are selected and sent to subscribers on a regular basis. Pricing starts at $45 for three wines a month. Each wine shipment includes a “book of awesomeness” that features tasting notes, recipes and music suggestions.

Web retailer Naked Wines takes a different approach: It uses crowd-funding to financially support independent winemakers, who then provide wines exclusively to Naked Wines. Consumers rate wines and winemakers, all of which are prominently displayed on the company’s website. Buyers can search by winemaker or wine, or they can view those most highly regarded by other consumers. “The younger generation is more reliant on what their friends say,” says Naked Wines founder and CEO Rowan Gormley. “By providing a platform where friends can share opinions, we’ve made it easy for them.”

Each company procures wines differently. Under Naked Wines’ crowd-funding model, “Angels” contribute $40 a month in exchange for discounts on finished wines. That money supports the efforts of about 135 individual winemakers around the world, who produce wine either at Naked Wines’ wine studio in Sonoma or at other wineries with underused capacity.

The wines—though not necessarily the winemakers—are exclusive to Naked Wines. Gormley says his model provides an avenue to market for winemakers who want some independence, but have been squeezed out of the traditional market. “Getting a product to market is difficult and expensive,” Gormley says. “We’re enabling people to get their products to market.”

Club W’s wine offerings are also exclusive. Oxman says Club W’s chief wine officer, Brian Smith, and other advisors work with a network of suppliers to bring the wine to market. “Our winemakers make the wine, then they collaborate with us on the branding,” Oxman says, adding that a winemaker’s exclusive offering to Club W typically has a similar look and feel as that individual’s products on the broader market.

Wine Awesomeness has some exclusive wines, but executives also seek out labels that are more widely available. “We believe in curating really good wine, and if there isn’t something in the market, we’ll work with a winemaker to build a brand,” Lee says.

For Wine Awesomeness, all wines are priced at $15 a bottle. Naked Wines offers various price points, with prices substantially lower for Angels. Club W has a few higher-end wines, but the majority are priced at $13 a bottle, which is where millennials seem to be most comfortable. Lee of Wine Awesomeness believes that trend could change. “There’s an opportunity to play around with different tiers, such as the $15-to-$22 range,” he says. “That move could happen as the millennial generation matures.”