Wine.com receives multi-million growth capital from Goldman Sachs

Goldman-Sachs

Wine.com, the San Francisco-based online retailer, received last week a $ 32.5 million growth capital from the privately-owned Goldman Sachs Asset Management (GSAM PCG) credit group to focus on marketing and to increase the number of brands of wine they sell. Rich Bergsund, CEO of the company, said Wine.com plans to use the funds to innovate and identify the needs of new customers. Wine.com sells wine in 43 states and Washington DC, which currently accounts for 96 percent of the total wine consumption in the United States. Although Goldman Sachs declined to comment, GSAM PCG Vice President Matt Singer said in a recent press release that the bank was delighted to partner with Wine.com. This recent investment in Wine.com represents an opportunity for the company to improve its ability to take advantage of the growing interest in e-commerce. Consumers looking for convenience and expanded access to niche brands are actively transforming their purchases into online channels, said Stephen Rannekleiv, New York-based global beverage sector strategist for Rabobank. This new cash injection should allow the online retail giant, which has long been able to ship in so many states, to finally fight against the newly combined footprint of Amazon and Whole Foods. None of the experts I talked to thought that this investment would hurt local wine retailers or reduce the number of transactions that a number of alcoholic beverage delivery vehicles make.

Shaping the future of wine retail

The big chains, such as Total Wine & More, have loyal customers who will continue to shop for bargains, everyday wines and innovative offers directly from the producers. Local and independent retailers will always have customers who want customer service and an interactive and convenient shopping experience. Rannekleiv said that this expansion of Wine.com could even inspire other retailers to improve their online wine sales, but they have generally done extremely poor work in this area. We think they miss a huge opportunity! Many large grocery retailers could take lessons on wine marketing online at Wine.com. He does not think the new investment will lead to higher prices for Wine.com. The wine market remains very competitive and extremely fragmented. Wine.com is the largest online wine retailer, but it still represents only a very small part of the market. Mr. Bergsund also agrees, noting that retailers who understand their customers are not likely to lose a business. The multitude of delivery services on the market offers the advantage of fast delivery, with which Wine.com cannot compete. Drizly is more competitive for fast delivery. Wine.com has a relatively fast delivery, but it’s not the same day and cannot really be used for immediate consumption as Drizly is used. Wine.com competes by offering wide availability of brands and lots of information and suggestions, including online sommeliers. Both models seem to have a role to play in the market. Only time will tell which types of services Wine.com will use effectively for the investment. The big chains, such as Total Wine & More, have loyal customers who will continue to shop for bargains, everyday wines and innovative offers directly from the producers. Local and independent retailers will always have customers who want customer service and an interactive and convenient shopping experience. Rannekleiv said that this expansion of Wine.com could even inspire other retailers to improve their online wine sales, but they have generally done extremely poor work in this area. But industry experts feel that they have missed out on a huge opportunity. Many large grocery retailers could take lessons on wine marketing online at Wine.com. A lot of experts do not think the new investment will lead to higher prices for Wine.com. The wine market remains very competitive and extremely fragmented. It still remains a small part of the industry.

About Anand Sai 53 Articles
Anand Sai has worked in the field of market research as an analyst and a consultant and has also operated at several leadership positions. He has an enormous experience with respect to the compilation of high-quality market research reports and boasts over six years of experience in end-to-end project management. Anand is a dependable voice in the market research field and has been named in some of the top industry publications. He is also a travel junkie and loves to explore new places with his friends.