Three Danish technology entrepreneurs have set themselves the ambitious goal of creating the world’s biggest online wine trading company.
Via their wine app for “normal people”, as they call it, they are sending out the “world’s best offers” – bargain buys with a 20% to 50% discount in Denmark and the US. Soon Brazil and the UK, Benelux and Italy will follow, and then, like pearls on a string, country after country will be added – until the biggest online wine trader in the world will bear the name ‘Vivino’.
In the summer of 2009, Heini Zachariassen sat in his basement in Copenhagen, frustrated by the tangled muddle of the wine jungle. How and where could he find some answers about what to buy and where to do it? Something online, naturally – like the film site IMDB, except for wine. Yet he was looking in vain for such a site, so he found himself creating his own online reference system.
Having successfully developed and sold another technology company, BullGuard, his new project was soon off and running. In 2010 he was joined by Theis Søndergaard, his former former BullGuard partner. Janus Friis, co-founder of Skype, helped to finance development, with later funding coming from Seed Capital and Creandum.
The first beta app launched in 2011. In April 2012, the Vivino Wine Scanner app was ready. Five months later the app had scanned half-a-million wines, and the company was growing at 25% a month – largely by word of mouth.
Zachariassen has since moved to San Francisco with his family, toggling between Napa Valley and Silicon Valley to push his wine app in the US, and he’s finally started earning money by selling wine via the app.
The free app works by making a record of where the user tasted the wine, how it tasted, and what other users had to say about it. Say you’re at Restaurant Noma in Copenhagen and like the ‘vin nature’ they serve you. You take a picture of the label and your Vivino search tells you where you can buy the wine for €22.00 ($25.00).
“We now have five million wines in our database and seven million users,” says Søndergaard, who runs the office in Copenhagen. “Every day we receive about 300,000 pictures of wine labels. When they are not recognised in the system, the picture is transferred to the Indian city Coimbatore, where a team of 60 employees on shift do the manual work of finding the relevant data. Then, in an hour or so, they return the information to the user who sent the picture.
The user is happy and we have yet another wine in our database – which is what it is all about.” As he says, the more the better. “A year ago we had a recognition match rate of 35% - today, 92%,” he says.
Users rate the wines they taste using a five-point scale, with half-points included. The more ratings there are per wine, the more valid the system becomes. Today, the app has 18.7m ratings and accumulates approximately 100,000 new ratings per day. “For Vivino the users are the vital cells in what we call the world’s biggest wine brain, but you need many cells to be brainy,” says Søndergaard, “so it is all about expanding the number of active users to fine-tune the value and validity of our database.”
Søndergaard says they need about 300,000 to 400,000 users in a country before they can take the next step and affiliate with the local wine trade to launch a Vivino-style sales program. This program is already at work in the US, where six to ten wines are offered each week to Vivino users; in Denmark, users are offered three wines per week. The Danish Vivino office has a full- time marketing expert, who sources Vivino’s bargains from about 40 affiliated Danish wine importers. When the week’s offer is replaced by a new one, Vivino knows exactly how many bottles have been sold. The Danish importer delivers the order to the Vivino storage centre, from where the wine is sent to the customer. It offers a new sales channel for the trade, while provoking people to buy wines they might not have tried before.
But why are Vivino affiliating with the local wine trade and not selling their own wine – a more profitable omission of one link in the chain? “Diversity is more fun,” says Søndergaard.
How reliable are community ratings?
Vivino recently looked at 5,000 wines in their database and compared more than 800,000 Vivino users’ ratings with those of Robert Parker and the Wine Spectator. They discovered that Vivino ratings correlated strongly with both sources. As their blog says, “Vivino ratings correlated stronger with these experts than Robert Parker and Wine Spectator correlated with each other.” Where Robert Parker gives 90+ points to a wine, the Vivino community tends to rate that wine at 3.9 or higher. So if you like Parker’s picks, but he hasn’t rated the wine you’re thinking of, then buy it if Vivino says it rates 3.9 or more.
