Online wine sales business Naked Wines has predicted revenue growth of more than 40 per cent in 2021 (year ending March), positioning it as the largest direct to consumer wine business in the world and the most sought after in Australia.
Following the shift in consumer behaviour during COVID, Naked Wines’ business currently sits 48 per cent higher than at this time last year.
“Naked Wines was founded on the belief that the wine industry could be so much better; the two most important people – the wine drinker and the winemaker – could be getting a better deal. So we decided to do something about it,” said Alicia Kennedy, Managing Director of Naked Wines Australia.
Naked Wines’ business model cuts out the middle-men and strips away the hidden costs, such as distribution and advertising, that drive up wine label price tags. It backs its winemakers’ independence, connecting them directly to more than 100,000 Australian customers (‘Angels’) – who pay a monthly fee of $40. These funds are invested directly with independent winemakers supporting local wine production and members can then access discounts, wine offers and events.
“For years, the big supermarkets and their bottle shops have been giving winemakers and wine drinkers a raw deal,” says Kennedy. “Their buying clout forces local winemakers, who want to reach Australian drinkers, to churn out wine which the big boys then stick a fancy label on and mark-up significantly…meaning that by the time you buy it, the majority of what’s in the bottle is retailer margin and marketing. Winemakers are driven to the wall and consumers are, at best, short changed. In fact, the only winners are the big bottle shops and supermarkets.”
Now, with Chinese tariffs currently imposed on many winemakers to the tune of 212 per cent and with Naked Wines’ firmly positioned for future growth, the business has created a $5 million dollar support fund for independent winemakers and growers impacted by Chinese tariffs.
“We are doing what we can to step forward,” said Kennedy, “Five million dollars is what we can do and it will impact our growers and their local communities.
“We hope that the action will inspire other retailers to think long term and support those (winemaking businesses) that are least set up for this.”
Kennedy asserts Naked Wines is just doing what it has always done: supporting independent winemakers for some of whom, their only export market is China.
There are predictions of an oversupply of wine and that independent winemakers will be pressured to drop their prices. As we are currently seeing happen with lobster.
“We are hearing stories about contracts and orders being dropped as retailers wait for the price drop…It’s a particularly unkind wrap up to a difficult year,” she said.
“For the smaller winemakers and grape growers, there’s a lot of fear and uncertainty around their future; they have committed to vintage and invested upfront, and they’re understandably very concerned they’ll be driven to the wall by retailers dropping or bartering down their contracts to take advantage of cheaper sources. Unfortunately for some, this is already happening.”
Naked Wines has made a promise to honour commitments made to all of its independent Australian winemakers and will not drop contracts with its winemakers and their growers to take advantage of cheaper sources.
To apply for support due to the China tariffs, winemakers can go to www.nakedwines.com.au/stopthesqueeze to apply to the fund and must meet the following criteria to be considered:
1. Be an independent wine producer or winemaker
2. Display a proven track record of quality
3. Show evidence of the impact China’s wine tariffs have had