WineJump - a new startup worth following

WineJump is a new digital startup launching across Europe (March 2020) and it has the potential to cause major industry disruption. Silicon Valley based entrepreneur Thomas Winther and his business partner Marco Angermeier have built a platform that enables wineries to legally ship small quantities of wine internationally - direct to the consumer. The USP is that complex customs and excise paperwork is handled in an automated, hassle-free way. If this takes off, WineJump will quickly establish itself as one of the continent’s key influencers of how wine gets bought and sold.

The concept, which opens initially in Belgium, Denmark, France, Germany, Italy, Spain and The Netherlands, will surely be welcome news for small to medium sized wineries that operate in the notoriously difficult ‘not cheap, not premium’ space. Producers making wines that lack obvious commercial appeal will presumably relish the opportunity to talk directly with their customers. After all, engaging and building trust on social media and via email marketing will only take a winery so far if their products are not accessible.

The best startups deliver a solution to a problem - a problem worth solving. By removing the complexity and expense that face both producers and consumers in the form of customs documentation, WineJump believes their proposition will correct a number of other market inefficiencies, notably trimming the margins that are added at multiple stages of the supply chain. By way of reminder, a wine leaving the cellar door in France at €4.50 could find itself sitting on a UK shelf at £16-18.

Founder and CEO, Thomas Winther explains “we founded WineJump because we’ve always felt like importers, distributors and retailers were drinking out of our glass without asking. Middlemen only add costs and margins and no value, and they push these costs and margins on to the wine estates and consumers. It’s a broken system that exists only because of alcohol and tax regulations. Selling wine legally in the EU involves a lot of paperwork. When wine cross borders it simply becomes too much for any one wine estate or individual wine lover to manage.”

While many freight companies do offer a documentation service it’s still a manual job. Information has to be gathered and someone has to fill the form in. It takes about half an hour and usually incurs a charge of anywhere between £30-40. Even if a consumer knows the service exists, it’s rarely viable on a single box of wine. The fact that WineJump “offers users a fully automated system for payments, shipping and customs” means that this expense is completely removed.

Additionally, the perceived scalability of this project means that the company’s chosen shipper, UPS, is prepared to offer favourable rates. Thomas told me that they were contractually obliged to keep transport rates confidential, but said, “it is important to note that shipping costs are included in the consumer price per bottle when a consumer buys six, 12, or 18 bottles. If buying less than six then a flat rate of €15 will apply”.

Direct to consumer is a model that has been steadily gaining traction over the last 10 years; wineries have gradually understood how to combine CRM software and inexpensive payment gateways with social media and modern digital storytelling strategies. In the producing countries of Europe, domestic ‘direct to consumer’ methods are fairly popular, but government regulation has always prevented (largely to avoid a loss of tax revenue) the culture spreading to include retailing across international borders. While it is possible, it is often not worth the effort for either side.

Having entered into dialogue with multiple government agencies, Wine Jump claims to have built a series of bespoke, country specific engines that ensure compliance with the destination country’s rules and regulations. In handling these relatively expensive (and often complex) administrative burdens by automation, Wine Jump is not only opening up potential new markets for small producers, they are providing a route around typical warehousing and middlemen costs. This is good news for busy consumers, and probably good news for producers too.

Of course, the longer term consequences of such innovation are unknown. Presumably, as the platform’s popularity grows, competition for visibility will grow too. For wineries willing to invest in developing their brand through digital initiatives, it is the perfect mechanism. Online marketing campaigns can be linked directly to the estate’s WineJump profile, meaning ROI can be measured accurately. Those who lack the skills or inclination to work online will almost certainly be left behind, unless of course, they are successfully building an offline following through cellar room interactions and simply point customers in the direction of their WineJump profile.

Since Wine Jump takes a neutral position, i.e. they do not sell wine, the concept provides a stage on which we can finally address the question of influence. The Instagram marketeers I often criticise for their lack of substance and artificially inflated followings will have a chance to prove their worth. Likewise, should influence be the primary motivation, the established critic must do battle on the same field.

If the WineJump venture can build sufficient momentum behind its offering then it will almost certainly pose a threat to the traditional retail businesses. While the experience of browsing the shelves in our local wine merchant can never be properly replaced, most of us do that far less than we used to. Static retail models are already under extreme pressure, and this disruption will only exacerbate the challenges. One could also argue that the fallout will signify distributor casualties as well.

Is this good for wineries? WineJump have already built in the option for their software to switch shipping to certain markets on and off. For example, if an estate already has an importer in the UK they can choose not to sell there to avoid confusion. This makes sense, but what if a winery has been selling direct for a year or two already? Does that make it easier to get an importer? Or will it be too difficult to reconcile inevitable price increases?

Wine Jump have signed up around 150 wineries so far and there is excitement around the idea of creating supplementary revenue. They do not, currently, view the opportunity as a replacement for their existing and more favoured export model; rather it is an additional route to markets they have little to no presence in. It will of course be interesting to see how this unfolds. Estates that commit to this potential revenue stream will no doubt adapt and refine the way they do things, which will inevitably lead to an increase in labels, special offers, and of course, quicker picking, packing and shipping processes.

Additionally, wineries based in accessible regions may well think more about the welcome they offer at the cellar door. If someone can still purchase wines long after their visit then we may see greater commitment to advancing enotourism services and collaborations. For small estates with low volumes, combining offline experiences with ongoing digital communication linked to a competitive point of sale, could well be an attractive model.

Thomas and Marco’s startup represents a platform that brings buyer and seller together, and facilitates their ability to do business by handling all compliance obligations in an automated, hassle-free way. In the early days at least, before the early adopters have had a chance to name and shame estates with poor customer service, they are at the mercy of third parties. Delays, breakages and disputes will happen from time to time, and WineJump will need to trust their winery partners to resolve things satisfactorily. It is here that the established merchant business will seek to compete and fight back.

On a personal note I’m excited to see this concept work. As a wine consumer I think choice is important, but as someone who understands how and where a bottle of wine’s price inflates along its journey into various markets, I’m thrilled at the idea of buying my favourite wines at a cheaper rate. WineJump won’t launch in the UK until later in the year, but I’m pleased to see some friends already on board. Gianvito Rizzo of Feudi di Guagnano in Puglia told me that “WineJump is an exciting idea. While it certainly will not replace our search for importers, it will make an important contribution to increasing the reputation of the winery on foreign markets. We’re hoping it helps us reach our customers more easily. More and more people are coming to Salento and discovering our wines and this is a great way of keeping the contact with them”.

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Nb. I have no financial interests in WineJump.