Naked Wines & The Online Wine Opportunity | In Practise

Naked Wines & The Online Wine Opportunity

Founder and CEO at Vioneers and Former Executive at Lidl

Learning outcomes

  • The history of wine as a consumer product
  • Why there are no strong brands in the wine category
  • The structure of the online DTC market versus traditional physical distribution
  • How to work with winemakers and what they care about
  • How wine DTC players can build a brand in the market
  • Unit economics of online wine and target retention rates
  • Difference between EU and US market structure
  • Biggest challenge for wine DTC players
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Executive Bio

Jochen Heigoldt

Founder and CEO at Vioneers and Former Executive at Lidl

Jochen has over 20 years experience working in retail and over 5 years in importing, distributing and selling wine throughout Europe. He is the Founder and CEO of Vioneers, a German wine online DTC start up that sources wine directly from local winemakers to sell throughout Germany and Europe. He is also the CEO of Grapeagents, a European-based wine importer and distributor of premium wines focused on small family-owned producers. Jochen previously spent 5 years as the CFO of Dublin Food Sales, one of the largest food service companies in Ireland, and started his retail career with 10 years working at Lidl in various roles across Europe. Read more

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Can you tell us about your background and experience in the wine industry?

I have an extensive background in retail having worked for a large European retailer for over 10 years, and still maintain a retail DNA. I became self-employed in 2014 when I bought into a food service business. In 2017 I started a wine company called Vioneers. Since then I have seen the production side of wine and worked with wine makers and producers globally. In my previous role I was focused on end consumers and restaurants.

Can you give us a short introduction to your new wine venture?

I started Vioneers because I saw wine as a lifestyle and luxury product. I saw many other brands and products with honest marketing focusing on the experience and who was behind a product. In wine there are many B2C and online offers which are deal-focused with a short-term eye on business. I wanted to change this and give great producers a stage for their powerful stories. I wanted to digitize the experience consumers have when visiting a winery or restaurant with a knowledgeable sommelier.

That is the foundation for Vioneers where we focus on family-owned wineries, producing superior quality and communicate that honestly.

How has wine as a consumer product evolved?

If you go back more than hundreds of years ago to the roots of wine making, it was part of the culture where people developed regional styles of wine. It was often connected to enjoying good food and festivals and linked to all the core values of residents of a particular region.

In today's commercial world, wine has become a commodity. Looking at e-commerce statistics, wine is always mixed in a box with grocery shopping, and supermarkets are the biggest channel where wine is sold to end consumers. The price and shiny label are the main decision-making criteria for customers which is a far cry from the original product. I see many trends becoming more important in other industries, such as who is behind the product and what makes it?

Take the meat industry as an example. Consumers are more aware of production techniques and animal welfare, and I believe that same sensitivity is coming to the wine business. There will be a greater distinction between quality versus mass-produced wine.

Why is wine so price driven today?

Wine is opaque and consumers fear overpaying for it, either because they are uneducated or fooled. They prefer a safe bet and if they choose a bargain which they end up disliking, at least they did not overpay. That is a big driver for buying decisions, especially in Germany where consumers are more price sensitive. What people spend on food is very much price driven and wine has to fit into that.

Another reason the wine industry is so competitive is due to a large and growing production. There is a continuous battle for who places their bottles at the best spot to be seen and sold, and who falls behind. It is a very competitive environment which sometimes leads to aggressive pricing.

Why are there no brands in the wine category?

There are several reasons but within the wine industry brands are seen differently than externally. People within the business think there are big brands, but if you ask consumers to name 10 wineries, nobody can, especially if you exclude local wineries if you live in a wine region. The reason for that is that placing a brand is challenging. Many wineries build a great brand, but as one of thousands it is difficult to communicate that brand to large audiences.

Those who do reach large audiences are big wineries where the brand is blown up. Miraval, for example, is a world-famous rosé from the South of France, owned by Brad Pitt and Angelina Jolie at the time and today millions of bottles are being produced. You can say, “The best rosé in the world” and get someone famous behind it and do some shiny marketing, but if you investigated product quality or did a blind tasting, it would be far from the best rosé in the world.

Local wineries represent a good brand whereas large brands target bigger audiences and I see a communication gap there.

How have e-commerce or D2C opportunities changed the industry structure?

I am not sure if it has changed the structure yet, but I see many trends supporting other approaches in addition to those already out there. If you think about experiences that a wine consumer has or shares, what are they saying about a wine when they present it to guests? Wine is often a topic in these circumstances and it is good to say something real about it. That is much better than saying, “This is a great wine – I got it for 4.99”

There is a lot of power behind the content of a bottle of wine, and both e-commerce and technology are enabling this. Vioneers aims to not only sell wine, but give added value to consumers. When you have bought the wine and thinking what am I drinking this evening or what suits now and how could that increase my competence around wine? In other words, learning, but that does not sound as sexy.

Comparing the old physical distribution world with this new online D2C world, does the change in distribution make it possible to tell the stories of the smaller family- owned wineries directly to consumers? Previously, if they wanted to get on the shelf of the supermarket, they would have to go via a physical distributor who would not tell the story of a winery to Tesco.

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Naked Wines & The Online Wine Opportunity

October 21, 2020

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