Vivino – or how i tricked my friends into thinking I’m a sommelier
“THE NETFLIX OF WINE.”
Vivino is disrupting a dusty industry on its mission to democratize wine. Founded by non-wine people. Valued at $800bn. But how?
“The Netflix of Wine”
Kevin love, NBA star
What is better than a cold glass of white wine on a warm summer evening or a glass of red wine in front of the fireplace at Christmas time? Not much.
When it comes to wine, let’s be honest, most people feel the same way (except for this one consulting friend who attended a wine seminar in his spare time and now calls himself #sommelier), in front of the big shelf you get overwhelmed by the selection and get anxiety… When in doubt… go for the prettiest label. When in the restaurant, hmm the cheapest bottle would seem like I’m only going by price and more expensive certainly means better…or not?. This does not have to be this way, the solution: Vivino.
“A guy that is really into wine doesn’t understand why other people aren’t.”
Vivino CEO – on how he founded the company with no wine background at all
This app has truly changed my life: Better buying decisions without headaches (literally) in the supermarket, direction in the jungle of the wine list in the restaurant, and the recognition of friends and family: “Laura decides the wine, she knows her stuff”.
The wine industry is old and complex and was ripe for disruption and democratization — I loved that.
Heini Zachariassen, CEO of Vivino
Wine sales are immense but online pentration is still very small at only 3%. Vivino took advantage of this gap in the market by matching people with wines they really like and making the buying process as easy and convenient as possible.
About Vivino.
Vivino is a wine marketplace, which was founded in 2009 in Denmark, and is now headquartered in San Francisco. Their mission is to democratize wine.
The mobile app includes wine ratings, reviews, prices, tasting notes and suggested food pairings, through its unique features such as scanning a label and then providing a matching percentage for the user, the app has already acquired over 60 million users and is actively selling wine in 17 global markets. The app works with over 250 thousand wineries and has received over 250 million reviews on their wines. The monthly active user base is on-par with major delivery platforms such as doordash. 95% of Vivino’s user base is reported to have been organic, with no paid marketing.
How it works.
Find As mentioned earlier, almost any wine, whether in the store, restaurant or wherever can be scanned by taking a photo of the label, alternatively the name can be entered. Vivino then shows the user a personal match probability (based on the user’s previous ratings), as well as an average rating of all Vivino users in stars, comments from them, and descriptions and statistics about the wine. The recommendation algorithm (similar to Netflix) always recommends new wines based on past ratings and purchases.
Remember The user can then rate the wine and save it, place it in a virtual cellar (Wish List) or order it directly from the winemaker.
Share Furthermore, the platform allows users to network with other users or friends, sharing reviews, comments and photos.
“That’s our secret sauce, it’s all about the data we get from the community.”
Heini Zachariassen, CEO
In addition, Vivino offers features such as curated local bestsellers or the Vivino Wine Style Awards to keep recommending new wines to users. For particularly loyal users, there is also a subscription service (the Wine Club) that sends six wines every six weeks. Vivino also has a separate platform for winemakers, where they can enter detailed information about their wines and receive personalized insights.
Lets talk about money.
The App is free for both the sellers and the users of the app. Vivino’s role is to curate the individual wines and to manage the payment process. The wines themselves are sold and distruted by the winemakers. But how do you earn money in the process? Vivino as a marketplace has different revenue streams, on the one hand marketing fees (enabled by reaching a larger target group for the winemakers, the promotion of the wines, as well as the educating part), through advertising on the platform, through the sale of aggregated data to other businesses, as well as subscription services (vivino wine club).
THE FUTURE
The online wine business is booming. Especially due to the Covid pandemic, Vivino could more than double its sales in 2020. This value is also recognized by investors, currently Bloomberg assumes a valuation of around 800 million dollars. Until now the app recognizes wines and sparkling wines, but I personally see further potential for other types of alcohol, such as whiskey or gin. How do you see that? How can Vivino continue to grow?
Cheers!
Laura
Sources:
Medium.com, Vivino.com, Bloomberg.com
Love this post! As someone who loves wine, Vivino has come in handy many times. I feel like knowledge of wines has always been shrouded with mystery and Vivino definitely demystifies the wine scene. As people become more conscious about getting the most value for their money when it comes to alcohol, I see a world in which Vivino expands to Gin, Tequila, Mezcal. Very scalable business model that uses social network element to build buzz around a fun topic – wine.
This truly identifies my problem! I am always terrified when I pick a wine at a supermarket and find myself busy pretending I actually “know” a wine (which is not true at all).
I love your idea about expanding into other categories. Not only alcoholic beverages, perhaps they can think of expanding into food such as cheese that I find also intimidating to pick.
Also, accumulating a lot of data, especially about customer preferences, I believe they can now build their own winery that perfectly matches customers’ preferences on top of just selling its data to other parties.
Thanks a lot Laura for this post! As someone who loves vine, I can appreciate a great app that can help curate my wine list whenever I need this. That organic growth numbers you posted are any platform’s dreams! Wineries will pay so much for this rich customer data so that really curate offerings to the customers that are buying their wines. The data they have at this point through retail channels and other outlets show only a fragment of who or what the customer is and so is not that useful compared to what this app can do for them
I love the idea of expanding to other alcohols and potentially can add videos or educational materials on the type of alcohol, the origin as well as some of the cocktails they can make out of it. What they could also expand into is to really use data from the reviews (250M reviews!) and give the users sophisticated recommendations on wine pairings as well as bringing in exclusive wine enthusiasts and sommeliers to provide a ‘featured list’ every so often to increase the frequency of customers visiting the app thereby leading to more revenue. Another source of increasing the stickiness of the customer, as well as growth, is by having virtual/ in person wine tasting events in partnership with a wine club
Couple of interesting questions that came to my mind while reading this are :
1) What kind of algorithm do they have to screen millions of bottles of wine – are they doing by themselves, who uploads these photos, when do they refresh this? what’s the accuracy rate/customer delight/other KPI’s on recommendations?
2) Since it’s a free app for users as well as sellers, how’re they screening for fake reviews and ensuring quality? If some sort of quality is not enforced, this could lead to a lot of customers and sellers leaving the platform
Very interesting post Laura! Thanks for sharing, looks like I need to check out this app myself! I wonder if they can continue to have a sustainable business model as they continue growing without monetizing users or winemakers. It would be interesting to learn more on the economics of the current subscription in which they send 6 wines every 6 weeks and who bears the costs of the inventory, logistics, etc as we saw on other cases such as Threadless why it was a good business model when they didn’t hold any inventory and it was print-on-demand!
Laura, first of all, 10/10 title.
Despite my love for wine, I’ve never actually used Vivino! This sounds like such a fun solution for people who are intimidated by conversations around wine. Firstly, it allows consumers to efficiently discover their own preferences about wine (given that the app tracks similarities in descriptions and tasting notes for well-received bottles), which then empowers the consumer to be able to explicitly talk about their wine preferences. With constant usage of the Vivino app, users will also become more sophisticated wine consumers as they begin to correlate the flavor descriptions per the app to the wine that they are actually tasting. You’ve inspired me to try it out!
Such a great post as a Vivino user myself! I think this is a great platform since it has such obvious cross side network effects and same side effects for the users. It also is such a globally applicable business I think it’s monetisation through the wine club is applicable everywhere. One question I do have is it’s defensibility and any barriers to entry it has built – just because it is the current platform of choice, will it always be? Or will a competitor find a way to provide even more value to both sides of the platform?