A Fresh Wave of Startups Is Driving Wine Buying Into the 21st Century

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A Fresh Wave of Startups Is Driving Wine Buying Into the 21st Century

Shopping for wine has never been easier—especially for people in the middle of nowhere.

Wine is often seen as this mysterious beverage that can only be drunk with the proper food, stemware, and pretension. This couldn't be further from the truth. The only befuddling aspect of wine is trying to find a place to purchase interesting bottles without breaking the bank. Luckily the internet is here to make finding the right wine for any occasion—whether it's a romantic dinner or a night spent playing Super Smash Bros.—much simpler than it would be otherwise.

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That wasn't always the case. Draconian post-Prohibition laws regulating alcohol sales in the United States make it hard to sell wines across state lines thanks to varying rules around taxation, labeling, and other bureaucratic nonsense designed to halt the flow of fermented grape juice. But, much like winter in Westeros, change is coming, and so far it's taken two forms best exemplified by Delectable's Banquet app and Winc handling everything from vineyard to glass.

Banquet is an e-commerce platform through which wineries and wine shops can sell their wares. In theory, this is about as exciting as basically every other e-commerce platform. But in reality the app makes it much easier to find sellers, search through their wares, and purchase the bottle or bottles (lush) that you want. Remember how buying, well, basically anything used to be a pain in the ass until Amazon came around? Banquet is like an Amazon for wine that doesn't suck.

The app was borne from Delectable, a sort of Instagram-meets-Hot or Not that is popular among sommeliers, winemakers, and other members of the beverage industry. The two serve different yet complementary purposes: Delectable is about finding wine you might like; Banquet is about making it easier to purchase wine. The two are mostly separate — there is some overlap, like a link to Banquet from Delectable and Delectable reviews appearing in Banquet, but that's about it.

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"There's ultimately a small, privileged group of people who live in incredibly well provided-for beverage markets, and there's a much larger swath of people who aren't, and I think that one of the wonderful promises of technology is that the wine world isn't small," said Delectable's Julia Weinberg. "If I live in a small town in name-your-state and all that makes sense for my local market to carry are traditional wines of a certain type, then that's all I might ever be able to find."

Banquet solves that problem. I live in the middle of nowhere -- also known as the Finger Lakes region of upstate New York -- and the wine selection in most shops is… limited. Finding online stores that carry the wines I want to purchase is also difficult. But when I use Banquet it's easy to find a store, find the wine I want to buy, and decide if I want to pay the ungodly shipping costs to have it delivered to my front door. Ta-da! A world of wine right from the comfort of my phone.

Other companies like Drync have also tried to build platforms through which wineries and wine shops can sell their wares. Banquet and Delectable offer much more, however, both in terms of the number of retailers using the platform and the number of people recommending wines. Still, the approach is the same and Drync has the added benefit of partnering with an established company (eBay) to make sellers a little more comfortable with hawking their wares via its app.

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Winc takes a very different approach. Instead of serving as a platform through which other people can sell their wine, the company produces its own wine; markets it to consumers; and sells it through its website, distributes to wine shops, and forms relationships with restaurants. People with business acumen refer to this as vertical integration. I call it cutting out all of the middlemen so you have more control over what the product is, to whom it's sold, and how profitable is. (Otherwise known as selling stuff before the word "e-commerce" was invented.)

But the company didn't start out that way. It began as Club W, a wine club that curated other people's wines and made them available to anyone who signed up through its website. Shortly after that product debuted and gained some traction the team reconsidered its approach. Why focus on selling other people's wine? And why not dabble with making the product they love? Just about the only thing with which they weren't dissatisfied was their focus on the Web.

"For me and probably for you we're just of a generation that is predisposed to buying online," said Winc CEO Xander Oxman. "I'd much rather buy something on Amazon than go to a store." He said this is true of everything from groceries and consumer goods to electronics and wine. Who wants to drive to a store, hope they have a product, and interact with actual human beings when you can just point your web browser to a site that offers exactly what you're looking for?

So now Winc produces well over a hundred different wines and sells them to as many people as possible. They've figured out the arcane rules and regulations so they can ship in most of the US. (Oxman said they're over the "90 percent threshold" in terms of the number of people they can reach within the country.) It's a herculean -- or would it be Dionysian? -- feat that requires working with many different regulators just to make sure people are able to order something they like.

"On the direct-to-consumer side there's basically 50 different sets of rules. Just managing compliance on a state-by-state or sometimes even county-by-county basis is pretty complicated," Oxman said. "It's like a lot of other highly regulated spaces. There are roadblocks, but if you can get over those, they kind of become competitive moats."

Those competitive moats could dissuade others from trying to drag wine buying into this century. It's hard enough to make a new service that will be more than just a flash in the App Store's digital pan without having to worry about regulatory hurdles, expensive taxes, and the perception that everyone who likes wine really just likes to waste their money. While both Delectable and Winc appear to be in good health — both have raised a decent amount of venture capital and don't show any signs of slowing their growth — they're unlikely to face too many competitors.

Banquet solves the problem of discovering new wines and where to buy them. It's like a cool magazine that reviews the latest-and-greatest drinks that also has an easy-to-use store directory. Winc is more like Walmart: It produces as much as it can, and has spread its reach as far as it can, to make sure it can appeal to the largest number of people who could possibly enjoy its products. The end result is the same either way: A more convenient solution to finding a bottle of wine that fits your budget; your palate; and most importantly your glass, red Solo cup, or delicate stemware.