Drinking wine is one of the most social and community-building activities, while to evaluate and buy a good bottle of wine takes extensive training and it is often an expensive and frustrating experience.
On average, an introductory sommelier exam costs 500$ in the US and a sommelier patent may cost up to several thousands of dollars (1). A single bottle of wine costs on average 5 to 10$ (2), with the most expensive wine sold in 2017 in the US being DRC’s Montrachet 1990 (12 bottles), sold for US$104,125 (3).
Beside the lack of knowledge and high ticket prices, the wine purchasing experience is further aggravated by the fact that wine bottles are heavy and fragile items to carry, especially if purchased in large amount to get some sort of discount.
Realizing these customer pain points, as well as the huge value that a community element can add to the wine buying experience, Matt Rutledge, founder of Woot.com and David Studdert, president of Wine Country Connect, launched in 2017 a Kickstarter campaign for a new wine-selling venture called Casemates.com.
Rutledge already proved the viability of such a model when he successfully launched Wine.Woot, a platform that hosted direct-from-producer wine offers and that became part of Amazon when its parent, Woot.com, was acquired by the e-commerce giant in 2010 (4). Amazon in late 2017 announced that it would shut down Wine.Woot in order to focus on selling wine via AmazonFresh, Prime Now and Whole Foods Markets, the grocery chain it purchased in 2017. Rutledge saw the opportunity to rebuild such platform thanks to Amazon exit and to re-create the community of wine lovers and wine producers that grew up around Wine.Woot.
In the vision of the founders, “the site will be a community that offers wine deals—from one winery at a time—on Mondays, Wednesdays and Fridays”. Beside allowing customers to buy wines online and get them easily shipped at their doorsteps, Casemates will engage users thanks to an online forum where they can review the wines sold on the site, share their wine knowledge and socialize. The winery-direct retail model will also allow Casemates to reduce prices to consumers by cutting the traditional high margins of physical retail stores. Users will be further allowed to share orders with their friends / neighbors and save 30-40% per bottle retail prices by buying whole cases instead. Hence Casemates aims to create value by educating the consumer in a crowed-sourced model, facilitating the decision process and overall buying experience, and reducing the final price for consumers while preserving the margins for producers.
Casemates does not intend to capture value in a traditional per-transaction model, but will charge customers “event fees” to participate in online events where the wineries will be the sellers (5), to foster even more the sense of community and incentivize producers to cut costs and sell higher volumes through the platform.
Overall, the outlook for the US wine sales market is positive and it is expected to see steady growth in 2018 at around a 2%. Total US wine sales were $62.7 billion in 2017, with $41.8 billion in sales from domestic wine and $20.9 billion from imports (6). In the online segment, the wine and spirits niche has the second-highest year-over-year growth rate among online food merchants at 21.3% (7) and has experienced consistent growth during the last several years, giving ventures such as Casemates an incredible momentum for growth and success.
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