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Constellation snaps up 1-year-old online wine delivery company for bcommerce gains

Snacks / Thursday, July 02, 2020
_Proud toddler wine startup parent: "They sell off so fast"_
_Proud toddler wine startup parent: "They sell off so fast"_

What do you call boozy ecommerce?... Let's go with bcommerce. If there's one thing you want showing up at your door mid-pandemic, it's wine. Bcommerce sales soared almost 400% in mid-April when lockdowns were on and bars were shut. Then we had a brief reopening stint, but now bars are getting re-shut in some of America's largest cities.

  • Booze giant Constellation Brands thinks it's the perfect time to invest in bcommerce. Constellation owns alcohol classics like Robert Mondavi wine, Svedka vodka, and Ballast Point beer. Now it wants some direct-to-consumer action...
  • Empathy Wines: The D2C wine company Constellation just acquired. The 1-year-old startup was launched by Gary Vaynerchuk, who founded Resy (later sold to Amex). Its 2K subscribers have bought 15K cases of "vineyard-to-table" CA wine. Sounds empathetic.

Constellation isn't just buying a startup... It's buying the whole bcommerce biz model.

  • Over 90% of Constellation's wine sales happen through wholesalers and bars/restaurants (not pandemic-friendly).
  • Yet 46 states allow alcohol to be delivered right to your door, which could cut out the restaurant and liquor store middle men for Constellation.
  • Empathy does exactly this. And tricks Constellation learns through Empathy could be applied to its other alcohol brands.

In a fragmented industry, brand matters extra... Many young drinkers can’t name/pronounce a wine label besides whatever sits next to Two-Buck Chuck at Trader Joe's. But brands like White Girl Rosé by Josh Ostrovsky (@TheFatJewish) stand out because of the personality they're built on (so AB InBev acquired it). Constellation is hoping Empathy Wines' brand can bring some of that personal touch to its liquor portfolio.

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