Much has changed since we recommended Winc last December. The popular direct-to-consumer wine company was one of the last pre-pandemic recommendations we made. Now lockdowns and quarantines have become our normal. And with so many of us stuck at home, meals have taken center stage in our lives.
So it’s not surprising that Los Angeles-based Winc has benefited.
Winc calls the current situation “truly sobering.” But it also acknowledges that COVID-19 has helped its business grow more quickly.
Winc Founder and CEO Geoff McFarlane told me growth surged in March (April’s numbers aren’t public yet) when I reached out to ask him how Winc was faring during the pandemic.
“We experienced our highest customer acquisition month ever, beating February’s new customer numbers by 684%,” Geoff said. “We gained over 26,700 new customers in March. It exceeded our new customer acquisition goal for the entire year!”
Monthly revenue also jumped 80% from February to March. The number of orders more than doubled, increasing by 111%. And the cost of acquiring new customers was cut in half. Geoff expects April’s numbers to be even better than March’s.
But it’s not all good news. Winc was counting on its wholesale business (sales to Whole Foods, Krogers and others) to accelerate growth. “We had planned to heavily invest in our wholesale growth,” Geoff said. “However with the closure of non-essential businesses, that plan has shifted.”
Winc is also concerned about its supply chain. But its light-asset model helps it adjust to the needs of its worldwide suppliers.
“The impact on our supply chain should be limited,” Geoff explained. “We’re working with all of our partners to ensure the highest safety and health measures are being taken.”
Winc sees a massive opportunity unfolding in its direct-to-consumer business. “We believe,” Geoff says, “that with at-home consumption and Winc’s business model built around delivering a great glass of wine, direct to consumers’ door step will continue to grow.”
But Winc is also staying grounded.
“Our DtC business is growing extremely fast but we need to continue to be incredibly smart with our resources,” Geoff said. “We still plan to invest as much money as we can into acquiring inventory needed for our growing number of customers. And we need to continually monitor our acquisition channels to understand what the lifetime value (LTV) looks like for those customers.”
Even before COVID-19 hit, Winc was catering to what Geoff describes as a “seismic shift in terms of at-home delivery and alcohol purchasing moving online.” And Winc continues to carry out innovative marketing ideas.
Just yesterday, it launched a new wine brand called The Wonderful Wine Co. The new brand currently offers four sustainable vegan wines — a French, mineral-driven white blend, a Grenache-Syrah Rosé, an Argentine Malbec and a limited-edition orange wine called Malvasia Bianca.
It’s likely Winc will continue to balance playing offense and defense for some time to come. They’ve done a nice job so far. But growing the business is clearly the company’s number one imperative. And that’s what investors like to see.