Alcohol delivery sees massive spike in March

Brian Smith, Winc COO & Co-Founder, joined Yahoo Finance to discuss how the alcohol delivery business is doing in the time of the coronavirus pandemic.

Video Transcript

- Let's switch topics here to talk about wine because wine delivery companies have seen a big boost amid all these stay at home measures across the country we are now joined by Brian Smith, who is the COO and co-founder of Winc. Brian, it's good to have you on today. I want to get to the delivery part first later, but let me ask you first about how you're operating in this environment because a lot of the delivery companies I've been speaking to have seen a big demand, but they've also had to really kind of step up their operations to keep their employees safe as well. Can you talk about the challenge of operating in this environment right now, especially when you see demand has ticked up so much?

BRIAN SMITH: Sure. Absolutely. Yeah, we've seen significant increase in demand in what has been a high growth part of the market, and clearly, that puts a lot of pressure. I think one of the things that is lucky, or one of the internal capabilities that we have, is that when we set out to start this company, we've completely reimagined the path from the grape to the customer's glass. So that means we have complete control over all demand planning, as well as pick, pack, fulfill data. Everything is managed internally. And so thankfully, our team has been able to be incredibly dynamic from our two warehouses to make sure that we're following best practices, looking out for the team, and keeping people at work in a healthy fashion.

- Where are you-- where are you seeing the growth right now? I find that you're kind of in a unique position to track the habits of all of us who are just hanging out at home with nowhere to go. Are you seeing, over the last several weeks, growth in maybe some areas that you didn't before?

BRIAN SMITH: Yeah. So I mean, you know, connectivity with the customer and digital expertise is really at the core of what we do so we are getting a lot of data. I think in the early indications where we saw major spikes in daily demand, almost 10x daily demand for us to customer acquisition, it really did sort of follow the sequencing of awareness and restrictions as you go geographically across the states.

That's now changed, and it's evolving, but certainly in the early days over the last two weeks, we did see a lot of activity and continue to in New York, as well as in Pennsylvania, and also, Los Angeles.

- You know, I thought you were going to tell us, Brian, that Merlot is finally coming back into style or something like that because of this thing.

BRIAN SMITH: Merlot is-- everybody should be drinking Merlot. It actually tastes delicious. It should always be back in style. We haven't seen that yet, but we have seen an incredible appetite for all sorts of styles of wines. And I think wine has historically been a social and ceremonial beverage, and I think now, more than ever, with work from home, social distancing, it's become an important part of people's day and a slight respite from some of the news and some of the uncertainty ahead.

- I didn't know Merlot actually went out of style. I'm sure I have some in the house. Thank you for--

[INTERPOSING VOICES]

- For you, I'm sure it's still in style right now. No doubt.

- So Brian, what do you-- if this crisis ever ends and people start going back to wine stores, what do you think is going to happen to your plan, to your business then? Do you have-- you're sort of capturing some market share here. Do you have a plan for holding onto that market share, or do you just think it would go back to the way it was?

BRIAN SMITH: Yeah, absolutely.

- Brian, do we still have you?

- Is an onmi channel--

- Looks like his signal is--

BRIAN SMITH: We believe at home consumption is very important, as well as at home trial, and that data from that relationship. But we are building a house of brands, and we sell those brands across direct consumer, as well as, retail and restaurants. Now, it's been very unfortunate what's happened in the restaurant community, and we're doing what we can to support there, but it doesn't change our overall thesis, and that is that you need to be connected with consumers, probably now more than ever.

But ultimately, it's about creating great products and being available where consumers are. And so as consumers start to come back in, we're seeing actually pretty decent sales in chain business. There's a lot of demand there, but as consumers start to adapt to the new normal and come back to on premise or restaurants, that is also a part of our business. So the long term thesis doesn't change, but the reality of resources and executing the business has changed quite a bit.

- Brian, you know, you talked about those restaurants-- and they certainly have taken a significant hit on the back of this-- I'm curious what your conversations are with them and whether there is talk of potential partnerships given that you are doing so well on the wine side. Do you think there are some opportunities here across platforms?

BRIAN SMITH: Yeah. I do think we will see some-- you know, there has-- we work in a very regulated environment, and so sometimes, these partnerships that sort of make sense from an economic and relationship standpoint are challenging to execute. You have seen some of the laws change where they're allowing, you know, restaurants to sell retail wine and the like to help give them some sort of life support and revenue.

We're certainly would be happy to explore those, but again, it's a challenging legal environment so a lot of what we're doing is trying to raise awareness around different causes, as well as do online digital tastings and things of that nature, where we can help support those people that have supported us.

- Yeah. It's really interesting to see how so many of these spaces are evolving in these uncertain times. Brian Smith, good to have you on today, the co-founder of Winc.