Vinomofo is no ordinary online wine club, but rather a “tech company” and a leader in “innovation and disruption”. Its customers are its “tribe”, and it does not sell private labels, but engages in the “black market”, “contraband” and “secret deals”. The online presence at the other end of the computer is not some retail assistant, but your “personal wine broker”.
As it announces loudly on its website, Vinomofo wants to step up, care more, keep it real and have fun. And, in between, presumably it would love to sell you some wine.
The language is deliberate and important, because it’s what separates Vinomofo, an undeniable marketing success, from more ordinary retailers.
The soft hard sell
The tone is all very theatrical, which may or may not have something to do with co-founder Andre Eikmeier’s start as an actor. Together with business partner and brother-in-law Justin Dry, they are the high profile, friendly, (still) young-ish faces of Vinomofo – two cheeky young dudes in jeans and t-shirts doing the hard sell in the softest way imaginable.
And, in a smart piece of commerce, their message rarely mentions deals and price slashing, but instead is cleverly disguised in a maze of feel good emotions. Their Twitter feed is regularly devoted to photos of cute rescue dogs living it up at the ‘Fo warehouse HQ in the inner Melbourne suburb of Richmond, with hugs all round from Vinomofo’s young staff.
On the last Friday of every month a box of goodies (including wine) is delivered unannounced by a Vinomofo employee to a person or group working in the community and addressing issues such as homelessness and domestic violence. Their gesture is a Vinobomb, otherwise known as a random act of kindness.
The website counter ticks over the changing number of new members — 440,584 and growing — joining Vinomofo.
Eikmeier and Dry like to call their venture “the most epic wine site on the planet” and now they look like making good on the boast.
In April this year they snared record-breaking tech start-up funding of A$25m ($18m) from Australian backer Blue Sky Venture Capital to feed their plans for growth outside Australia. Six countries will be targeted: New Zealand, Hong Kong, Singapore, the US, UK and China.
Rather than build substantial infrastructure in the new markets, the plan is to adopt a “business lite model”, with the formation of wine clubs, online events managed from Australia, and events on the ground, to encourage growth organically.
Vinomofo reportedly told potential investors the company would surpass A$50m in annual revenue this year; it enjoyed a particularly successful previous 12 months, with 100% growth. Interestingly, the biggest online wine retailer in Australia, Dan Murphy’s – owned by Woolworths, with 500,000 members and a 46% slice of the online liquor sales market – has also reportedly enjoyed impressive online growth in recent times (around 100% in 2013). But the online retail market remains small with 3.5% of total liquor retail sales.
Emboldened by the healthy figures and a brazen business model, Eikmeier and Dry will now take on a shareholder – a minority one – the first since unbundling themselves of their last. And that wasn’t a good experience.
Fall and fall and rise
To go back to where it all started, not in 2011 when Vinomofo was formed, but way back in time when Eikmeier and Dry were just two guys flying by the seat of their pants in a beat-up Volkswagon Kombi and calling themselves Qwoff, you need to return to 2006.
Qwoff, a wine review site, tapped into social media and became a place for enthusiasts like Eikmeier and Dry, who wanted to talk and share wine stories and recommendations with other enthusiasts. While the duo describe Qwoff as Australia’s first online wine community, they were in fact walking in the shoes of WinePros, created in the 1990s by noted wine men, Len Evans and James Halliday. Separated by a decade, the two wine communities have walked an eerily similar path, with WinePros bringing in supermarket giant Coles, to turn the site into an online retailer.
Two years after the Qwoff launch, Eikmeier and Dry were broke. An investor arrived in the nick of time and off they went again, moving out of their garage in suburban Adelaide and into a city warehouse.
To create more of a social media buzz and get to know the nation’s winemakers, they rescued an old Volkswagon Kombi from a Barossa Valley orchard and set off on a road trip with a mate and a video recorder, filming Road to Vino for YouTube. They attracted plenty of attention but made no money. By the end of 2010 they were broke for the second time.
And so, like WinePros before them, they were not able to make a financial success of providing a platform for wine lovers to talk to each other, and they succumbed to the inevitable.
“Let’s start a wine deals site,” Dry remembers suggesting.
Their story, as told on their website, recalls that it was Eikmeier who had serious reservations about turning into retailers. So they asked their Qwoff followers - or ‘Qwoffers’- for an opinion, and the answer came back, according to the now well-known story, as a “yes” with one big reservation: do it as long as they only sold wines they really loved.
Qwoff was no more.
New venture
The first business name they arrived at was Vinomojo. Three days before their launch, a cease-and-desist letter was received from a trademark lawyer acting on behalf of a client and its wine brand. At the eleventh hour there was a name change, and Vinomofo was born.
Two years later they were broke, for a third time.
Partnership with the e-commerce site Catch of the Day was a saviour, of sorts. Monied up, Vinomofo grew in business and moved from Adelaide to Melbourne but, interestingly, the more successful the business became it seems the more Eikmeier and Dry felt the business turning corporate, distancing itself from what they saw as their core culture.
Once again, a small group of investors came to their rescue and one year later they bought back Vinomofo.
And now they have another investor on board and new challenges, yet again.
Will the rest of the world really get Vinomofo?
If Australia is any guide, a particular wine drinking demographic definitely will.
The group eschews the styles of wines that their immediate generation – that is, their parents – drank and everything that went with that, from the bricks and mortar shops to the wine vocabulary with its “nuances of leather and spice on the front palate” and all that.
Vinomofo talks their language. Their wine tasting notes are less florid: “Feeling parched? You won’t be when these little thirst quenchers hit your glass. Made by some of Australia and Spain’s finest rehydration specialists, these palate zingers offer hardcore refreshment.”
Their own private brands err towards the kind of super-cool funky labels that Gen Y is attached to, with names like The Orgy, Art of War, Deux Ex Liquida and Duck Sauce. Where Gen Y’s parents might be more cautious about unknown brands that are heavily funked up with cool names, suspecting they are probably for the short term, Gen Y understands them. “Vinomofo seems to have really caught the imagination of Gen Y, which we know tend to be less brand loyal,” says Melbourne’s Phil Hude of the bricks and mortar retailer, Armadale Cellars.
Wine origin
Being less loyal to a brand makes them ideal targets for disposable private brands, the fodder for 21st-century supermarket retailing. In that regard, Vinomofo is no different to an Aldi or Tesco. Just hipper.
A number of well-known Australian wine producers provide wine for Vinomofo’s own brands. It’s not something they choose to advertise. “In the early days they approached me,” says one Victorian winemaker, “and asked me, ‘Have you got anything that received 94 points or more that you can sell us at roughly half wholesale?’ I said ‘not a chance’ and that was the end of the conversation.” He adds, “I can imagine that if you were in a position where you desperately needed to move some high quality wine and it didn’t matter if it was close to cost, then they would do a good job of moving it.”
Winemaker Chester Osborn of d’Arenberg puts it more succinctly. “Massive discounts are not our game, so no dealings. Great people though.” That seems to be the general impression from quite a few makers. No-one has a bad word to say about Eikmeier or Dry. “I’ve always had a lot of respect for Andre and Justin,” says Corrina Wright of Oliver’s Taranga, a maker of some excellent Australian Shiraz in the McLaren Vale region. “I love the business they have created with such a strong culture that they and all their staff live from the inside out. They aren’t fake about what they do.”
But would she sell her wine through them? “We would love to be able to access their mailing list but we aren’t prepared to see our wines sold at 50% off.”
Producers, however, can always choose to engage Vinomofo to run a phone sales campaign using the producer’s mailing list. Rather than slashing prices on known wines, the deals are made on special releases or new wines.
One competitor has called Vinomofo a “clearing house” for unwanted wine, but this seems disingenuous. The ready smiles of the company’s founders aside, any successful business has to have a core value, and when the lads say they are selling wines they really love, it’s possible they are doing just that – in addition to selling wines at prices that are good for the bottom line.
However, the fact that they are one of the few retailers crazy enough to enter into the minefield that is a “100% happiness” guarantee, by allowing ‘Fo members to return wines they don’t like for a full refund, credit or replacement, takes gumption. Vinomofo will even arrange for the wines to be picked up or cover return shipping costs. As one retailer says with noted exasperation: “What they are doing is guerilla warfare.”
What it is doing is upping the retail ante and doing it with panache.
