Naked Wines Builds U.S. Arm of Business

Online retail and investment company teaming up with winemakers

by Andrew Adams
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Winemakers take a look at the former Blackstone Winery in Kenwood, Calif., where several winemakers will be making wine this fall to sell through Naked Wines.
Kenwood, Calif.—The winemakers gathered at the former Blackstone Winery recently were charged with a simple task: Make the best wine possible and leave the sales and marketing to us.

The message came from Rowan Gormley, who launched the U.S. arm of Naked Wines, an online endeavor that draws on a large pool of subscribers dubbed “angels,” who pay monthly fees that support independent winemakers throughout the world.

The wine produced by those winemakers is then sold directly to Naked Wines’ customers for far less than what it would cost on the retail market. As Gormley put it, winemakers can focus on following their passion in winemaking without having to “put on a tie and go sell wine.”

A small group of winemakers gathered at the former Blackstone Winery to get their first look at where they’d be making wine for Naked and to learn a little more about the company.

Gormley joined Richard Branson’s Virgin business empire in the 1990s and later left to found an online wine retail operation that Branson later bought into and eventually became Virgin Wines. Gormley and 12 other founders started Naked Wines in 2008.  The company has been focused on selling wines in the United Kingdom from the world’s most notable wine regions in Europe, South America and South Africa—but with the rather notable exception of the United States.

Building U.S. business
That caught the attention of Robin Langton, Naked Wines’ director of winemaking. As the production winemaker at Patz & Hall Wine Co. in Sonoma, Calif., Langton was doing some research on starting his own label when he found Naked Wines online and was surprised the company was sourcing wines from throughout the world but not the United States.

He emailed the company to inquire about their limited U.S. presence, and a subsequent series of meetings led to Langton working with Naked Wines.

Langton used his connections in the industry to find talented winemakers interested in starting their own projects. One of those was Ken Deis, who has worked in the Napa Valley for nearly 40 years.

Deis said he ran his own label for a while but grew tired of the ancillary obligations in sales, distribution and compliance. When Langton approached Deis about working with Naked Wines, he said he found the project intriguing and started blending this past winter.

At the former Blackstone Winery, Deis said he will have the chance to experiment with Zinfandel and Rhone varieties as well as making wine from Napa Valley Cabernet Sauvignon. “I really love making wine, I’ve done it for 37 years,” he said. “To me, I can concentrate on making wine.”

Naked Wines leased the winery from Ken Wilson and his Wilson Artisan Wineries group, which had purchased the building from Constellation Brands Inc. The two companies will share the tasting room, but Naked Wines will operate the production space.

Langton said Naked Wines’ staff just opened the doors to the winery this week. He said it was clear the building had been vacant for two years, but whoever was the last to leave had done a good job of mothballing the place, and the equipment was in decent shape.

In his remarks to the eight winemakers assembled at the winery, Langton said his staff could handle any winemaking style or operation. “You’re not second at someone else’s place,” he said. “This is really your winery as much as our winery.”

Jacqueline Bahue, former assistant winemaker at Girard Winery, will oversee day-to-day operations at the new winery. She said she was looking forward to working with so many different winemakers, although good communication will be vital during the hectic days and nights of harvest. Bahue said she also is planning to make her own wine but is still deciding exactly what to make.

Plans for growth
Langton said Naked Wines plans to crush 1,000 tons of fruit in Kenwood and oversee bulk wine production at four other wineries in California. The company intends to sell 400,000 cases of wine in the U.S. in 2013.  The company has 3,000 U.S. customers, of which 1,000 have pledged to become angels.

In the U.K., Naked Wines sold 750,000 cases of wine last year, which included 5,000 cases in one day. According to company information, the firm has 100,000 customers who have invested more than $3 million in 50 winemakers. The company also claims to have doubled its growth every year to reach sales of $40 million in 2011. Average price for wines sold through Naked Wines is $12-$15, but Langton said the quality of those wines is akin to products in the range of $30 per bottle or more.

The site allows customers to rate wines they purchase and follow their favorite winemakers who in turn are encouraged to interact as well. On the U.K. version of nakedwines.com, the most “popular” winemaker was South African Stephen de Wet, who has 8,636 followers.

Frenchman Benjamin Darnault had the third-highest number of followers with 5,256. In June 2010, Darnault posted a comment introducing himself to Naked Wines customers, saying his partnership with the company allowed him to buy grapes from “old bush vines” that can express the true terroir of the Languedoc.

One of the comments posted to Darnault was typical of the thread: “I’ve never been a huge fan of whites, this one is a cracker! It’s got no sharp edges whatsoever, super smooth, and with a lovely nose on it that reminds me of spring meadows (or so I thought after a whole bottle).”

It’s that interaction that helped draw William Henry to the project. Henry is the cellarmaster at Ram’s Gate Winery in Sonoma and a former New York winemaker. He said he knows how customers can become wholly detached from who is actually making wine through the multiple layers of the wine trade. “I love the direct-to-consumer part of it,” he said. “Interacting, that’s key.”

Henry is planning to make wine from Riesling grapes as well as Syrah from the Napa Valley and an Oregon Pinot Noir.

Most winemakers reiterated that they’re looking forward to just making the wine and leaving the sales up to someone else. Matt Iaconis, co-owner of MSix wines will be crafting the company’s Bar Code line of wines for Naked Wines. He said he’s sourcing fruit from the Antica estate in Napa Valley’s Atlas Peak and is looking forward to making wine with high-quality grapes and selling through Naked. “I’m pumped.…I’d rather sell two bottles of wine at $30 than one at $50,” he said. “Flashy marketing is not my thing. I’d rather make wine.”

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