One day a few weeks ago, I met with the people from Naked Wines at their offices on the water at Newport, just down from the Newport Arms. Here I found a call centre of reasonable size spread over two floors, and was greeted by a lady with a big smile who introduced herself as the Customer Happiness Manager and apologized for the messy office – they’d just had a birthday party with cake and balloons.
As a young salesman, I visited thousands of offices over many years and developed the ability to read an organisation from a few clues gleaned by observing the employees. Here at Naked Wines, it was obvious right away that they loved working here.
Good wines in the $10 – $20 sweetspot
It’s clear from Naked Wines’ website that these guys are targeting wines in the same range we are, but they’re coming at this in a very different way: they say they’re cutting out the middleman. So is it like buying direct from a winery? No, because you’re buying from Naked Wines so it’s no different from buying at Cellarmasters or GLUG. Buying direct from the winery is the only way to ‘cut out the middleman,’ but few wineries sell wines at deep discounts.
At Naked Wines, the winemakers under contract make the wines they want to make under their own labels. Here’s the short story, and here’s the rest of the detail
The website says:
- Our customers fund independent winemakers in return for exclusive access to delicious wines at wholesale prices
- We don’t just sell wines, we make them happen
- Since launching in 2012, Angels have helped us fund over $20,000,000 of delicious Aussie wine
- Pay wholesale prices – Save 25% to 50% on every wine.
There’s more: ‘By funding winemakers upfront we’re able to remove a huge chunk of costs that in a traditional wine business would be passed on to you, the customer. Costs like sales and marketing. It also means the winemaker can spend more time in the vineyard and less in the office. Which means the wines taste better. It’s a win, win.’
What about the operation?
We sit down in a comfortable office with Kirsty the PR guru who contacted me, and Mark Pollard the Wine Director. Luke Jecks the Naked Chief joins us not long after we get going. There are six whites and six reds in front of us, and they all have labels I’ve never seen before. No, they’re not naked, but they’re unusual and some have cool names like My Other Self Gary Cabernet Sauvignon 2013, Engine Room Mclaren Vale Label Shiraz Mataro Grenache 2013 and Jen Pfeiffer The Rebel Bubbles NV.
We taste some wines as I ask questions about the operation, especially the crowd-funding idea. The guys are open and enthusiastic about their business. They started in 2012, both Mark and Luke worked in the wine business before that and both worked for Cellarmasters. They say Naked Wines is thriving, that most of their customers come back for more, that they sell a lot of wine, that they’ve set up warehouses in several places (including Perth) so they can deliver the next day. These comments come from guys who look pretty happy with their achievements so far.
What about the model?
My initial thoughts were that Naked Wines was like Cellarmasters or David Farmer’s GLUG or Back Vintage who make wines from bought-in material under their own labels. Not so:
- Naked Wines recruits winemakers to make any wine they want under their own label
- Naked Wines asks its Angels to put $40 a month on a kind of lay-by for 3 months
- Naked Wines uses the $120 from each angel to pay the winemaker up-front
- Angels get access to their $120 eventually and buy Naked Wines with it.
Part of the story is that ‘Angel Funding’ helps young winemakers get on their own feet, which makes them ‘feel warm and fuzzy inside,’ as the website puts it, and can ‘change a winemaker’s life.’ Another part of the story is that there’s a waiting list for becoming an Angel, as if this were a super trendy restaurant or exclusive nightclub. A third part of the story is that way over 90% of customers are Angels, but that’s no surprise given the 30 – 40% difference in Angle Price vs Normal Price. Clearly, customers love the whole idea.
What about the winemakers?
They’re happy as well because they can make the wines they want to make, and get paid up-front for making them. In addition, they don’t have to worry about selling their wines since Naked Wines takes care of that. An example is Sam Plunkett who was a partner in Plunkett Fowles Wines (Ladies who Shoot their Lunch) until 2012 when he and Matt Fowles parted company.
Sam now makes wine for Naked Wines, and gets rave reviews from customers. The boys tell me that they encourage customers to give feedback to winemakers via a forum on their website. Works both ways, they say: winemakers love it because they get feedback straight from the horses’ mouth so to speak, and customers love it because they can talk directly to winemakers. They get to like certain winemakers rather than individual wines, and buy other wines made by them.
What about the wines?
Are they any better than the wines we find for our subscribers every week? No, I think we probably do better across the board but some of the Naked Wines are seriously good. I have 4 good Shiraz-based reds on the bench tonight, and the Jen Pfeiffer Shiraz Duriff from Naked Wines tops them all at just over $10. My Other Self Gary Cabernet Sauvignon 2013 was another wine I really liked, a lovely Great Southern Cabernet for $14.
These wines are individual as you’d expect, that’s part of the appeal here. These are wines made in limited quantities by serious winemakers: Sam Plunkett, Jen Pfeiffer, Darryl Groom, Stuart Pym and others. You’re buying the winemaker here – on the performance of Jen Pfeiffer’s red, I’d buy more of her wines. That’s how it works, and clearly it works very well.
One really useful feature of the website is that it gives us customer ratings on wines, by the simple measure of how many customers would buy the wine again. Of course you have to keep in mind that most of these customers are enthusiastic supporters of the model.
While you’re looking at the website, you should check the Meet the Team page. Lots of smiling young faces there, and cool titles like Chief Angel Greeter, Happiness Team Leader, Customer Happiness Manager and more. Nakes Wines is a fascinating operation.
Kim