No wine retailer excites such strong and contradictory comment as Naked Wines. The customers of this six-year-old, mould-breaking online retailer seem to love it – at least, to judge from the thousands of web reviews of their wines. They like Naked’s methodology of funding winemakers in advance, and these producers obviously also love Naked. But producers who have never had dealings with Naked, or who have been approached but have declined to do business with them, are deeply suspicious. And the conventional wine trade fears and loathes Naked in equal measure.
You rarely hear a kind word about Naked in wine trade circles. According to rumour, theirs is a bubble that is about to burst. They are masters of spin who tell half-truths and have committed the worst sin of all: turning tens of thousands of wine drinkers into loyal customers. Typical of their public relations prowess is an article that appeared in The Daily Telegraph in March last year headlined “Naked Wines shares maiden profit with staff”. What is described as a “wine venture capital firm… handed £35,000 to 34 staff”. No mention of owners Wein International, the German company once better known as Pieroth in Europe (PRP in the US), which used to send hapless wine salesmen to people’s homes. Instead we are given the impression that this is the cuddliest of struggling wine retailers.
But when I asked the head of Majestic Wine the other day whom he saw as his main competitor, he spat out “Naked” in a trice. In the old days it would probably have been the Laithwaite’s/Direct Wines group, Britain’s biggest direct wine seller and owner of most of Britain’s mail-order wine clubs, which has now expanded into the US, Australia, Hong Kong, Taiwan, Switzerland, Germany, Sweden, Denmark and Poland. I see a parallel between Naked Wines and Laithwaite’s. They both have a business model that operates outside wine trade norms. Not for them the old system whereby a retailer buys from a wholesaler, who might buy from an importer or the agent of a producer. They don’t need to kowtow to any supermarket buyer but go straight to the producer and offer wines unavailable elsewhere, thereby making direct price comparisons virtually impossible.
Laithwaite’s now deals in the fine wine market and has thousands of cases of conventional fine wine stored on its customers’ behalf, so some price transparency is required, but this is only after decades of direct marketing to consumers. Operating outside the conventional trade would seem to be a successful strategy, as Rowan Gormley, founder of Naked Wines, knows only too well. His original company, Virgin Wines, was developed with Richard Branson and taken over by Laithwaite’s in 2005. He left not long after and, as a chartered accountant with a Branson twist, stumbled across the idea of crowdfunding before the term had been coined. The Naked idea is that customers stump up £20 a month against future purchases at discounted prices which goes towards funding wine producers. A recent “fine wine” bond offer of £3m apparently exceeded its original target by £2m, and Naked has spread the word that they may have to close their books to new investors. The pitch is that their investors fund struggling young winemakers who need capital in order to turn their talent into delicious liquids.
In reality, about 95 per cent of Naked Wines are sold at the discounted price (described by Naked as “wholesale price” but which seem close to the usual retail price to me) and many of the Naked Wines producers are old hands – Randall Grahm of Bonny Doon in California, Virgile Joly of the Languedoc, Jonathan Maltus of Château Teyssier in St-Émilion and Bruwer Raats of South Africa, for instance. The Branson twist has delivered nomenclature designed to appeal to a particular slice of the population. Consumer-investors are known as “angels”. Those who invest heavily are “archangels”. They claim to have a total of 146,000 angels in the UK, about 50,000 in the US and 25,000 in Australia. If you have a question in the US, you address it to their Happiness Team.
The real genius of the Naked Wines model is that it fully harnesses social media, a concept still foreign to most in the wine trade. Angels review purchases on the Naked website, so individual wines carry telltale numbers of purchasers and percentages of the likelihood of a repeat purchase. And once a producer takes the Naked cash, they must agree to dialogue with customers – or, at least, field someone who can write friendly English on their behalf. The website has a section that is effectively a chatroom for its suppliers and customers, most of whom agree how wise they were to invest in Naked.
This is a website carrying questionable messages such as, “We squeeze less juice from the grape so that we get all the fruit and less of the bitter dregs that make cheap wines taste cheap” and, “Because our growers know that their fruit has been sold upfront, they can harvest at optimal ripeness.” No wonder the rest of the wine trade hates them. And those in the know can see the cracks.
Bruno Lafon is touted as having grown up “making wines at the ultra-premium Domaine des Comtes Lafon estate in Meursault so he knows what he’s doing”. But he has not been there for half a lifetime, and even from his more recent base north of Béziers in the Languedoc, it is not obvious why a portion of the same genes as Dominique Lafon would help him to make Châteauneuf-du-Pape (£27.99, or £19.99 to an angel). Also north of Béziers, Virgile Joly gained a reputation for authentic, hand-crafted wines but under Naked auspices his name is attached to Merlot and Sauvignon Blanc that is basic Vin de France (£9.99, or £7.49 to an angel).
But you cannot fault them for consumer involvement. Their roadshows are lovefests for customers and producers. And talented producers such as Vincent Paris of Cornas, Rod Easthope of New Zealand, Richard Kershaw of South Africa and Katie Jones of the Roussillon all needed capital to progress and have been able to do so thanks to Naked.
Tasting notes on JancisRobinson.com
I tasted 80 offerings from Naked Wines last week and the following wines seemed a good deal at the “angel” price given here.
• Moerbei White Gold Chardonnay 2013 Stellenbosch, £9.49
• Richard’s Chardonnay 2013 Elgin, £18.99 (and Syrah £14.99)
• Stefano di Blasi & Federico Cerelli 2012 Chianti Classico, £10.99
• Matt Parish Cabernet Sauvignon 2012 Napa Valley, £12.99 (from November)
• Santolin Family Reserve Pinot Noir 2013 Yarra Valley, £13.99
• Dom du Mortier, Soulane 2012 St-Joseph, £14.49
• Rod Easthope Pinot Noir 2013 Martinborough, £14.99
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