Coronavirus lockdown a boom time for Digital Wine Ventures

For Digital Wine Ventures the lockdown has proved a boom time for its cellar-door-to-door business model, with sales soaring.

Dean Taylor says while things are opening back up, consumers have realised how easy it is to buy wine online through his Digital Wine Ventures. Picture: Adam Yip

The coronavirus has wrecked a lot of things, but for Digital Wine Ventures the lockdown has proved a boom time for its cellar-door-to-door business model, with sales soaring.

Most customers don’t realise they are dealing with Digital Wine Ventures, but the company’s software powers much of the selling from small wineries across Australia.

Its software plugs into online stores, with the business also holding stock from various wineries in logistics centres around Australia and New Zealand.

Customer orders engage the system that ships wine either from various logistics centres or from Digital Wine Ventures’ ­Albury-­Wodonga distribution centre to ensure two-day delivery on most items.

The scalable business model has allowed sales at the company to increase 40 per cent in June and rise 93 per cent on the previous quarter while only directly employing 14 people.

Digital Wine Ventures CEO Dean Taylor said the business, his eighth start-up in the wine space, was entirely equity-funded.

“We’re predominantly a technology company. We don’t own the warehouse or forklifts or racking, we’re able to run the business reasonably efficiently and concentrate on expanding into technology,” Mr Taylor said.

Despite the lockdown ending for much of the nation, Australians made 2752 orders in June and early signs out of Victoria point to the emergence of bulk wine buying.

Mr Taylor said wineries had “seen a growth anywhere between 50 per cent and 500 per cent as their customers have started to purchase online”.

“Now that everything’s opening back up again, people should be going back to their normal buying patterns, but consumers have realised how easy it is to purchase wine online,” he said.

Mr Taylor said the business was planning to launch a trade platform in coming months to cater to the hospitality sector as it came out of coronavirus closures.

“In the current conditions our sales have been 100 per cent consumer deliveries. Virtually all our trade deliveries came to a halt, but generally it’s 50-50 split between the two market segments,” he said. “[The trade platform] has the potential to not only grow the wholesale market but make it far more viable for wineries that sell this way.”

Mr Taylor said Digital Wine Ventures planned to boost income by clipping the ticket on trade sales. “It’ll be between 5-10 per cent — it’s a lot less than the 35-50 per cent that they normally pay for distribution,” he said.

Digital Wine Ventures has been listed on the ASX for more than 10 years, but not in its current guise, first listing as Xanadu Wines.

Mr Taylor said he bought the business in part due to it holding a licence to distribute wine in China.

“Before I became involved the shell had been used to launch a ­direct to consumer wine business in China,” he said. “While that business wasn’t successful, what they had managed to do was establish the corporate legal and IT structures to operate a wine business in China. “It’s certainly of immense value once in a post-COVID world we decide to push into that market.”