Surfin'

Wines & Vines, May, 2001

It looks like the time has finally come to put on black arm bands for wine sales on the Internet. Not that it's all over. There are still those out there who insist that good times are coming, but the mother of them all, Wine.com is all but gone.

Early in April, the Internet wine seller Wine.com, backed by Amazon.com and the New York Times, among others, laid off two-thirds of its employees, 160 out of 245, in what was described as an attempt to win support for a restructuring plan to save it from bankruptcy. The company, which was founded in 1994 as Virtual Vineyards, had laid off 75 workers in January.

Many small wine producers had pinned their hopes on Wine.com (and other Internet sales companies) for a way to sell wine directly to consumers.

Vic Motto, of Motto, Kryla and Fisher, a Napa wine consulting firm, told the Santa Rosa Press Democrat, "I hope they stay in business. The industry needs them. There is a tremendous opportunity for what they are doing."

At the same time, WineToday.com, the Santa Rosa-based wine content provider which was started three years ago by the New York Times, closed its Santa Rosa offices. WineToday had been a long time dying. The company had cut two-thirds of its work force over the past nine months.

A spokesperson for the Times said that WineToday will be absorbed into the new food and wine section on the Times' main Internet site, NYHTimes.com. It is unclear whether WineToday will simply fade away or remain an independent voice within the New York Times site.

Meanwhile, at Winetasting.com

Lesley Berglund, the president and ceo of winetasting.com, said that the company's sales are growing at a record pace. The company is a co-op which offers winery-to-consumer sales, both through the Internet site and through the company's catalog channel, Ambrosia.

Because winetasting.com operates as a co-op, its sales picture is somewhat different than the pure play Internet sales of a company like wine.com. But Berglund noted that member winery sales in February more than tripled December sales.

In contrast to the perception of across-the-board weakness in e-tailing, several recent events illustrate how wineries are successfully utilizing winetasting. com's solutions to: (1) improve sales and fulfillment efficiencies; (2) enhance direct communications with consumers on their mailing lists, and (3) provide consumers with previously unheard of levels of access to their ultrapremium wines, according to Berglund. Winery members include a number of premium and super-premium California wineries.

Grape Sales Online

WineryExchange, a leading service and technology provider to the wine industry, mounted what it called the first-ever online grape auction in late August.

"Never before have so many wine industry buyers and sellers come together in one place to forge new relationships," said Peter Byck, president & ceo of WineryExchange. "Bids were placed right off the bat, and at the height of the auction, we averaged one bid a minute. The auction activity and the interest from the industry are very encouraging. We believe this method of buying and selling wine grapes will be very successful for the industry.

The auction brought together over 60 vineyards and wineries from the California wine industry. Some came looking for rare lots of highly-desirable grapes. Others came looking for deals. Still others just wanted to watch this new method of buying and selling winegrapes at work. While the auction was held online, the traditional relationships between the winery and grape grower will remain intact. Vineyard visits took place prior to the auction, and the grower and buyer will continue to work together through harvest.

"The live auction was very exciting," adds Dennis Hill of Codera Wine Group and Blackstone Winery. "We were glued to our two screens the whole time--we didn't want to miss anything. The catalogue of grapes that were available came about a month ago and by the time of the auction we had marked and highlighted most of the pages. We were well prepared to go after the lots we wanted, and we got them."

WineryExchange is already planning a second auction June 26.

New Partners

The wine retailer eVineyard.com and Wine Brats have formed an online partnership, with eVineyard committing $100,000 over three years in a sponsorship agreement with Wine Brats.

The Internet company will participate in Wine Brats events and provide access to wines poured at events and tours.

Benson Relaunches Web Site

Benson Marketing Group in Napa will provide a user-friendly resource for wine marketers at bensonmarkering.com. The Web site now provides wine news headlines, original marketing feature stories, and offers one of the most complete directories of links to wine trade associations available. Additionally, BMG has launched the Wine Country Artists Series to promote local photographers, painters and graphic artists.

"As our network of marketing and technology information grew and developed, it became a natural progression for us to make some of these resources more widely available," said Jeremy Benson, president of the Napa-based group.