The naked truth about wine: being nice pays off
IT ALL began with a simple thought from someone wanting to set up a wine company: "What if we're just nice to the winemakers - what would that look like?"
Luke Jecks speaks about the wine industry with passion and enthusiasm, tempered with serious commercial acumen.
The managing director of Naked Wines Australia tells of the birth of the unique, crowd-funded business which is taking on the big players in the wine industry.
With a wealth of experience in wine distribution, Mr Jecks put his head together with now Naked CEO Rowan Gormley - formerly Richard Branson's right-hand man at Virgin Wine.
"Going out there and saying 'our prices can't compete with them but we're a better company' wouldn't work," he said. "We knew we had to have competitive pricing.
"We also knew we couldn't use market power like they could and we wouldn't want to even if we could.
"That's where we came along with the idea that every winemaker is basically like a chef who wants to own his own restaurant (and) they don't have the creative opportunities or freedoms that they'd like.
"Most winemakers given the choice would love to make their own vintage. What if we were to help them do that?
"We worked out that we could get a competitive price if we could join the winemaker up front and help them fund the project.
"So where are we going to get the funds to do that? And that's where the crowd funding idea came from.
"If we could convince customers that supporting winemakers and connecting directly with the producer was a good thing for them and for the producer, and they were going to get a better product out of it - and we knew that they would - we could pass the savings on to them and we might be able to create some sort of virtuous circle.'
There's no doubt that the idea has legs: Naked Wines now has 29,000 "angels" - ordinary people who like wine and are depositing $40 a month into an Naked account which the angels can use to buy wine at any time.
This amounts to about $1 million a month being made available to invest in winemaking.
"That helps the cash flow," Mr Jecks said. "Every time the winemaker makes wine he knows he has an audience of customers who want to buy that wine, who are already having conversations with him online."
More than 3.6 million bottles have been sold since NWA launched in 2012, and now 24 Australian winemakers and 40,000 customers are benefiting from the concept.
The angels are the key. "We try to make the company theirs," Mr Jecks said.
"We have over 300,000 wine ratings from them. They have input into everything online.
People love the fact that they're getting wine at a good price, that the quality is good, but more to the point that nobody's getting screwed on the way through
"When we bring on a new winemaker we will send free samples to some of our more engaged angels then invite them to meet in a chat room on a Thursday evening - us, them and the winemaker - and together we'll all hold a tasting.
"The winemaker will talk about the product and the angels will tell him what they think." The angels' input includes which wines should be introduced and how they should be priced.
"People love the fact that they're getting wine at a good price, that the quality is good, but more to the point that nobody's getting screwed on the way through."
Mr Jecks has firm opinions about the pricing of wine:
"It is impossible to make a bottle of wine, anywhere in the world, that costs more than about $15 to make," he said.
"The relationship between the cost of the wine and what it eventually sells for is very much out of synch.
"If you spend $100 or $200 on a bottle of wine, it wouldn't have cost the producer more than $15 to produce.
"We have, for example, a pinot noir made by Adrian & Rebecca Santolin. Now we know that the juice that went into that pinot noir also went into a branded product that sells for $90 a bottle.
"A non-angel on our site can buy it for $26. And angels buy it for $18."
How does Naked Wines' angel-based crowd funding work?
When accepted as an angel (there's a waiting list - numbers are limited depending on how many winemakers are available), each angel deposits $40 a month into their angel account.
There are no feeds, subscriptions or minimum period.
The money is available to use at any time to buy wine of the customer's choice, with a 25-50% discount, direct online access to the winemakers and a free bottle each month.
"An angel is someone who just puts $40 into their piggy bank," Mr Jecks said.
"That $40 remains theirs. When they come to shop online the money will already be in their checkout and when they buy that money comes off.
"If they don't want to be an angel any more they get all that money back.
"It's really just a piggy bank that gives us the confidence to go and invest in the Australian winemaker."
Non-angels can also buy from Naked Wines at competitive prices.
MORE INFO on www.naked wines.com.au