Digital Wine Ventures signs up record new customers to wine distribution platform, forecasts volume growth

Digital Wine Ventures wine distribution platform Jim Barry Wines ASX DW8
Digital Wine Ventures expects solid volume growth from its wine distribution business as consumers embrace online shopping during COVID-19.

Online beverage supplier Digital Wine Ventures (ASX: DW8) has announced it has signed up a record number of new customers to its wine distribution business WINEDEPOT in April, including esteemed Clare Valley-based winery, Jim Barry Wines.

In an announcement today, the company reported that 11 new customers were signed up last month to the cloud-based platform, which aims to provide wine producers, distributors, importers and retailers with an end-to-end supply chain solution.

One of the brands joining the list is iconic Clare Valley winery Jim Barry Wines, which recently won the Winery of the Year award and this year celebrates its 60th year of operation.

The brand is one of Australia’s 11 “first families of wine” and produces highly-rated red and white wines including Riesling, Shiraz and Cabernet Sauvignon.

Other customers signed up in April include the Hunter Valley’s Brokenwood Wines; Chalmers Wines, Michelini Wines and Stoney Hill Vineyard in Victoria; Salena Estate, Ubertas Wines, Dominic Wines and The Nimble Vintner in South Australia; Eagle Bay Brewery & Winery in Western Australia; and the Italian imported brand, BABO Wines.

The 11 sign-ups in one month compares to the total of 12 new customers recorded in the three months from January to March, taking the total number of customers using the online distribution service to 46.

Wine supply chain solution

WINDEPOT is designed to streamline the wine supply chain by providing producers the ability to hold inventory reserves in a network of depots located in the major Australian capitals.

The platform’s benefits include reduced freight costs and shipping time, less paperwork, administration, errors, breakages and working capital requirements.

For consumers, the service can offer same-day or next-day delivery of wines, and more recently, craft spirits.

Digital Wines is also expanding its existing product offering by launching a new fulfillment service called Direct-to-Depot, which enables customers to deliver their inventory directly into depots of their choice.

According to the company, its an attractive solution for larger scale wineries that have an existing wholesaler, distributor or third party logistics provider capable of managing the replenishment of the inventory.

The new service, which is currently being tested by some existing customers including Casella Family Wines, is due to launch officially in July.

Solid volume growth expected despite COVID-19 restrictions

In its March quarterly report released last month, Digital Wine said it processed a record 2,032 orders in March, almost half of the 4,234 unique orders made for the entire three-month period.

This represents an increase of 150% on the order volume recorded in the December quarter.

Digital Wine chief executive officer Dean Taylor said he expects volume growth to speed up over the coming months as consumers embrace online shopping while COVID-19 restrictions are in place.

“Online wine sales have surged all over the world as the entire hospitality sector including pubs, clubs, nightclubs, restaurants, casinos, cinemas have been closed down. Consumers still want to drink but they are doing whatever they can to avoid visiting busy shops and shopping online is the best way to do that,” he said.

“I expect wine producers to target this market more aggressively as they realise that online and direct-to-consumer are the only channels where they can continue to generate sales right now,” Mr Taylor added.

He said WINEDEPOT’s cloud-based technology platform is designed to cater for these markets, therefore the lift in orders processed came as “no surprise”.

“I expect this trend to continue over the coming months, as more and more wineries embrace solutions like ours to help them trade through these current difficult conditions, offering their customers a quick, cost effective and reliable delivery service,” Mr Taylor said.