Vintners’ Alliance is marching into potentially volatile waters as it attempts to digitize a particularly vintage (get it?) industry: wineries.
The company, which aims to introduce eCommerce solutions to a very segmented business, received $1.3 million in funding from Kholberg Ventures and other members of its board.
There are many granular challenges serving a niche, luxury industry such as wine. These challenges become so complex, they can significantly drive down business productivity and success. The hurdles are high, such as regulatory laws and fragmented internal operations. Thus wineries have been very slow to adopt new eCommerce technology.
Vintners’ Alliance co-founder Ahin Thomas spoke of one hurdle in an interview with VentureBeat. “A winery has one of seven eCommerce platforms, one of four point-of-sale systems, one of four or five email service providers, and then they may or may not have Google analytics,” he explained.
Vintners’ Alliance can operate over any combination of these products and provide sales analysis to help wineries market back to customers. The system pulls purchase history data, customer location, the type of wine a customer purchases, and time since last purchase. The technology aims to help vineyards decide what offers should be sent to which groups of customers.
Marketing wine is not an easy task, however as seen by Wine.com’s own struggles. The company which launched in 1998 is still alive today, but not before sucking up $200 million in funding and dropping down to a low $120,000 valuation in 2006.
But Thomas feels Vintners’ Alliance is not competing with Wine.com at all.
“Well, their big pain is distribution,” he said. “[Their] model is ‘I’m going to take on all this inventory, make margin on that and then I’ll create this giant marketplace and consumers will come there.’”
Instead of taking on the inventory, Vintners’ Alliance hands the marketing reigns over to the vinyard and gives them data to market and advice on how to market back to the correct audience. Vintners’ Alliance is essentially an agency or consultant.
Paul Maybray, a former employee of Wine.com and current chief strategy officer at VinTank, a wine industry think tank, believes in Vintners’ Alliance’s ability to survive.
“They’re armed by nature of failures been made,” he told VentureBeat in an interview. “[These failures] left a good roadmap for what to do and what not to do. I’m sure there are still some turns to be made, but I think they’re approaching it fom a very interesting angle.”
For Maybray, one of Vintners’ Alliance’s biggest challenges will simply be competition in the wine world. “There are about 150,000 wines approved each year, it’s very competitive…There aren’t 150,000 soaps.”
Thomas plans to use the funding to hire more employees. Vintners’ Alliance was founded in 2009 and has presence in San Francisco, Mexico, London, Uruguay, and Bangladesh.