An online marketing distribution service for boutique Western Australian wines is securing a foothold in the vast US market.
An online marketing distribution service for boutique Western Australian wines is securing a foothold in the vast US market.
The Global Wine Company is the first branded wine club to operate as a company in the US.
WA businessman David Reynolds based the GWC concept on a successful UK direct retail model, which markets via a branded wine club to three million members. The UK company turns over almost $US400 million in annual sales and ships more than 55 million bottles of wine a year through its own channel, or database.
In the US, national branded channels were an under utilised resource before GWC started forming strategic alliances with established, high-profile brands such as Forbes and VISA Platinum.
Mr Reynolds said he believed the potential for WA wine sales in the US market was massive.
“During the past eight months GWC has been turning over $US65,000 a month and growth of 10 to 12 per cent and last month it jumped to 25 per cent,” he said.
“By the end of the year we hope to be turning over $US250,000 a month.
“Introducing a new brand into the US requires excessive resources and high costs and for boutique wine makers this is prohibitive.
“To overcome this we targeted large established brands that match wine consumer demographics and have a strong affinity with wine, food and lifestyle.
“Through these channels the consumer already has a vested financial relationship with the brand and feels comfortable dealing with it.
“We leverage off their brand to achieve immediate market penetration.”
Mr Reynolds said US wine consumption had continued to increase during the past three decades but per capita was one third of that of Britain and Australia. Only 25 per cent of wine consumed in the US is imported.
“The US market has simply not been exposed to the large variety and quality of product we enjoy,” he told WA Business News. “Wine clubs have yet to be developed in any real size in the US.
“Online wine sales are increasing, however, and analysts expect online sales to top $1.5 billion this year. This represents a significant opportunity for WA and GWC.”
For WA wineries, achieving distribution agreements into the US, or distributors per se, has proven extremely difficult, particularly as trade regulations generally required each state to be treated independently.
But this is starting to change as state legislatures challenge prohibitive distribution laws.
“In the last three weeks, two states have had the laws abolished. The precedent is set to have a domino effect,” Mr Reynolds said.
GWC will source much of its wines from select WA wineries and make limited company shares available within an exclusive investment project to be launched later this year.
