They say “life is too good to drink bad wine.” One direct-to-consumer company agrees with that sentiment.
Hello Vino has been around since 2009 when it launched its iPhone app, and later its Android app, all focused on helping customers pick out better wine. Aggregating data for so long, the company decided to roll out a direct-to-consumer subscription program based on users’ profiles and pair them with wineries they’re very likely to like.
As a “Warby of X” model company, Hello Vino uses individuals’ data to make recommendations for them, whether it be a bottle or more of wine. The business’ subscription model rolls out this month and has millions of data points compiled each month, informing which wine to choose for each customer.
Rick Breslin, founder and CEO of Hello Vino, spoke with PYMNTS about the founding of the company, why the new subscription endeavor is starting after all these years of data collection and where the direct-to-consumer trend is headed.
PYMNTS: What is Hello Vino?
RB: Our overarching mission is to help people buy wine. We’ve been around since 2009, and the app has been a utility for shoppers to help them in stores, restaurants and even at home. We saw a big need by consumers who were overwhelmed by the wine-buying process. The industry has done a good job of making wine kind of snobby and unapproachable, and so, that’s where we stepped in to try to democratize it a bit.
PYMNTS: How does the Hello Vino subscription model work? How is it a “Warby of X?”
RB: Well, now it is, as we’ve launched our subscription service. In the early days, it was similar to a Yelp of wine. But now, the app is learning all the things you do with wine. You can take photos of labels through the app, you can search certain selections, and based on all that behavior and data, we will send you a personalized shipment each month.
PYMNTS: Tell us about the history of Hello Vino and how it got started?
RB: We put the iPhone app out there in 2009 and the Android app in 2010, and the app helps people buy wine. So, it has really granular choices, such as someone saying, “I want a light red wine that tastes like cherries.” And millions of people are doing this, and we’re collecting that data. So, when we started to collect this data, we started to aggregate flavor profiles of what consumers were gearing towards and what they wanted. So, we started to do some reports for winery clients for what they should be making. It’s very valuable for them. So, we thought: Why don’t we use that data to create a wine club and leverage it to sell it directly to consumers and make it really easy for them?
So, typical wine clubs are pushing some wines at you. They might have gotten a great deal on some bulk juice. But we take a different approach. We take the data of what each person is giving the app and then connect them with the appropriate winery and the appropriate wine that they make. And send you wine each month. And it works because we’ve been monitoring what that person has been doing each month regarding their wine data.
The subscription service is starting now, but we’ve been working on it for a year. This has taken quite a bit more time to nail down. But the evolution of Hello Vino’s subscription service has taken about 18 months.
PYMNTS: Can you explain how you’re pairing the marketplace? How does it work for both winery and consumer?
RB: From the consumer side, there are two. There are people who have been using Hello Vino for years, and we have their data and we know the wine they like. The other group are new users, where we don’t have any data on them so we have a simple two-step quiz about their preferences, and based on that profile, we can send them wines they like and that can evolve over time.
The other part is how we work with wineries. We are launching Cameron Hughes wine, and Camern Hughes is going to be our inaugural wine partner. He is going to look at all his different selections and build the subscription packs from his inventory. Moving forward, we are going to work with other wineries and go step by step rather than getting a lot of wineries in on this right away.
PYMNTS: How does Hello Vino compare to buying wine anywhere else?
RB: Anytime you buy wine at a supermarket or another store, it can be marked up 50 percent. That’s because it has to go through a distributor, who then gets it to the retailers. But along the way, everybody needs their cut. So, we are connecting consumers to the winery and saving that markup. The wineries can make their markup on the consumer, but it’s still high-quality wine at a nice price point. When we deal with smaller production wineries, you’ll get a better product.
PYMNTS: Generationally, who do you feel is taking advantage or getting into the “direct-to-consumer” concept?
RB: It’s a touchy subject in the industry because everyone is trying to tap into the millennial market. You also have to take into account a person’s age and their wine history. So, when you’re younger, you’re trying a lot of stuff and figuring out what you like. They’re less loyal to a specific winery. But they’re also more experimental. They will drink a lot because they’re trying new things. So, it’s a better audience than baby boomers in some ways because they’ve already figured out what they like.
But, with everyone having a smartphone, it doesn’t matter what age they are. We just care about the wine consumer and not about their age. If a 55-year-old jumps on the app and taps around and a 25-year-old does the same, they could have the same flavor profile. So, we’re starting to get past the demographic targeting because of technology.
PYMNTS: Do you feel like the “Warby of X” or direct-to-consumer trend will grow, or is it a fad?
RB: It’s certainly going to grow. To give you an overview here, direct-to-consumer is really only 5 percent of the $38 billion industry. It’s a small piece of the pie. But it’s been growing 10–15 percent over the past three or four years. What we’re seeing is that piece of the pie is swelling. Of course, wine consumption is growing, but consumers are getting smarter. They’re interested in the ingredients in our food and the quality of our products. So, they only want the good stuff, and that’s where the direct-to-consumer concept comes in. So, I think it will grow quite a bit, especially by 2025.