There's big money in Aussie wine making, and Luke Jecks is taking full advantage of this new investment strategy.
It may seem an ambitious way to fund a business, but crowdfunding now earns Sydney-based Naked Wines an impressive A$20 million a year. Wine enthusiasts are loving the venture.
In return for having A$40 deducted from their bank accounts each month, these “angel” investors can buy wine for sometimes half the usual retail price through Naked Wines. The pool of money raised by the monthly contributions also funds independent winemakers to create wines the way they want to, with the resulting boutique drops sold through Naked Wines.
“In Australia, the business model works perfectly, because we’re a producer country for wine. What we have here is angels supporting fellow Australians,” says Luke Jecks, managing director of Naked Wines. [The Australian business differs from its UK parent, where most wines are imported.]
The idea of personally backing independent winemakers, rating their wines online, and following and talking with them on the Naked Wine portal is creating a highly connected, engaged and active community. Some investors even volunteer to pick grapes at harvest.
“We have angels show up at the wineries and help with vintages after they become friends through the site. It’s really cool,” says Jecks.
Since launching in Australia in July 2012, Naked Wines has funded 24 independent winemakers in Australia and New Zealand, commissioned nearly 4 million bottles of boutique wine, signed up 29,000 angel investors and has another 5700 on a waiting list.
Jecks expects crowdfunding income to generate A$2 million a month by April this year. “Our start here has been extraordinarily successful,” he says.
In Australia, Naked Wines markets mostly online through campaigns with retail business partners such as Bing Lee, The Iconic, Temple & Webster, and also the National Roads and Motorists’ Association (NRMA). But even better, growth is also coming through old-fashioned word of mouth by happy customers.
Naked Wines now has three warehouses – in Sydney, Melbourne and Perth – to speed up deliveries.
“By putting the warehouse in Perth, our Christmas delivery cut-off for customers is now December 22,” says Jecks. “But our closest competitor is December 12.”
Jecks has 20 years’ experience selling wine. He’s worked in five countries for Fosters, Virgin Wines UK and Cellarmasters Australia. He gave up his corporate career to launch Naked Wines in Australia after an offer made by his friend Rowan Gormley, head of Naked Wines UK and founder of Virgin Money and Virgin Wines.
Most winemakers would love to do their own projects, says Jecks, but it’s the lack of capital that stops them. Naked Wines is filling the gap with its crowdfunding from wine lovers.
“So we’ve created a virtuous circle, where everybody kind of wins.”
Naked Wines is “getting some real superstars”, he says. There is Daryl Groom, head of Groom Wines and the former head of red winemaking for Penfolds. And there’s Victoria’s Adrian and Rebecca Santolin, who saved for nine years to make their first barrel of wine and now win gold medals and trophies at shows.
“The Santolins are a winemaking couple that Australia would have missed if Naked Wines did not happen … It sounds corny to say this, but we know what we’re doing is changing lives,” says Jecks.
“It’s one of the great reasons for coming to work.”
This article is from the February 2015 issue of INTHEBLACK