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After A Huge Pandemic Bump, Wine.com Aims For New Heights

December 16, 2022

San Francisco-based Wine.com has grown to become a force on the wine and spirits retail scene. Having built valuable relationships with wineries, wholesalers, and customers for more than two decades, the tech-savvy retailer is a leader in the online space, with overall sales expected to top $250 million this year.

Wine.com averages 13,000 wine SKUs online today, which are available for sale to customers in 41 states and Washington, D.C. This amounts to nearly 50,000 vintage-specific wines annually being purchased, according to founder and executive vice president Mike Osborn. Wine prices range from $8 a 750-ml. for Pepperwood Grove Merlot to $8,500 for 2001 Domaine Leroy Corton-Renardes Grand Cru. The average retail price for a 750-ml. bottle of wine on Wine.com is $32.

“It’s premium by the consumers’ choice,” notes CEO Rich Bergsund. “People can buy $10 wine at their local grocery store.” Bergsund joined the company in 2006. “When I joined Wine.com, the thing that struck me was the relationships Wine.com had within the beverage alcohol industry to develop three-tier e-commerce,” he says. “We are Napa Valley meets Silicon Valley. We are between both cities and try to bring different forces together to create something new for the wine world. We’re not just doing something that someone else has done.”

In 2019, Wine.com began selling spirits and now offers an average of 2,000 spirits SKUs in California, New York, Florida, and New Jersey. Spirits represent about 5% of overall sales. Beverage alcohol sales are down this year, but still significantly higher than 2019. “The Covid-19 bump for us was more than 100%,” Osborn says. “We brought more new business in 2020 than the size of our business. We are still 60%-70% more than 2019.”

Proximity to large wine wholesalers facilitates daily deliveries from Wine.com’s seven warehouses located in California, New York, Florida, Texas, Massachusetts, New Jersey, and Ohio. “Today we predominantly use FedEx, but FedEx and UPS have distribution centers close enough for late cutoffs,” Osborn says. “During holiday time, we want as much time as possible to pack orders and get out daily deliveries.”

The company’s wine sales have historically been split equally between imports and domestics, but there has been a recent shift toward imports. “For as long as I can remember, we’ve been 50%-50% between domestic and imported wines. Just this past year it swung to 55%-45% with more imports than domestics,” Osborn says. “That has a lot to do with offering the world.”

The shift also has to do with value hunting. “I’ve seen consumers who talk about going to Wine.com for wines under $25 and rated at 91 points or higher,” Osborn says. “Guess what pops out? A lot more imported wines from Cotes de Rhône and Italy. It’s hard to get a $25 Napa Valley Cabernet Sauvignon that’s rated 91 points. If customers are on the path of discovery and learning new regions and new varieties, it’s going to lead them to imports. We excel at it.” Market Watch has more on the growth of Wine.com.

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