In this episode of Add To Cart, we are joined by Dean Taylor who has a long history in the online business world. He has founded and sold wine businesses such as CrackaWines, My Wine Guy and The Wine Collective. In this chat, Dean discusses his latest venture, Wine Depot, which aims to simplify and streamline the warehouse and fulfilment process for wine manufacturers who want to go direct to customers. Launching in 2018, it has gained incredible traction so far with some of Australia’s leading wine manufacturers signing on, an expansion into a new marketplace model and a market cap of almost $200m under the ASX entity (Digital Wine Ventures – stock code DW8). As well as great tech and logistics, what comes through here is the importance of communication, whether that’s with investors or the wineries Dean deals with. The last lesson Dean shares is be careful who you send to pick up a bottle of 250 year old wine….
“Try not to talk about what you’re going to do, but what you’ve done“Dean Taylor
Questions answered in this episode include…
- What’s the secret to your significant growth over the last 18 months?
- What are the non-negotiables for successful fulfilment models in 2021?
- What’s a good value end bottle of wine you would recommend?
Lock, stock and the case of very old wine
That was my first business. So that was the business where we offered climate control storage for wine collectors. To be honest, it was never meant to be a big business. It was meant to be a little sidekick for me. But, right place, right time, it took off and I ended up with eleven sites around the country and I probably had 85% market share in that space.
I can reveal his identity. He has passed away, but it was Rene Rivkin. There was, I think it was seven bottles and they had been acquired from a Russian seller that had been buried and uncovered actually someone near Georgia and anyway these were amazing wines. They were all hand-blown bottles and, they were in various states of decay, none of them were really drinkable to be honest, but they were rarities and collectibles. And so anyway, we were charged with storing them.
Then it was after a couple of years, a lad was sent down to pick these up as they’d been sold to someone and it was like something out of Lock Stock and Two Smoking Barrels, this sort of henchman, a muscle-bound guy in his early twenties. And he insisted on seeing the wines right? They were all wrapped up in bubble wrap and then in boxes and then in another box. And I said, “You know, we’re happy to take them out, but once you take them out, you understand you’re taking responsibility for these, you know?”
And he’s like, yeah, yeah, no problem. Anyway he was checking them out. God knows what he was looking for, because he was certainly no art historian or had any sort of expertise in the area, but he had one of the bottles and I don’t know what happened, but it just slipped in his fingers and it just, it didn’t fall far, like maybe two inches onto the timber table we had in the office and it cracked this bottle. It just cracked like an egg. It was just amazing to watch it crack right. And all of this wine just spilled out over the table.
One of the lads that was working for me at the time, he’s run over to the the water fountain and he’s got all of the plastic cups and put them around the edges of this table and as the wine’s spilling off it’s dripping into these cups and then he’s putting the cups together. And, for about 15 minutes, this big burly guy didn’t move a muscle. He was just in shock. He didn’t know what to do. He was obviously trying to process how he was going to explain to. his boss that he’d destroyed a bottle of wine worth thousands of dollars. It was a bit like that scene…what was the Australian film? Two Hands. Where he buried the money on the beach at Bondi. It was something like that.
So, my lad came back to me and he’d managed to collect enough wine and we sat there, we did cheers and we got to drink…I can’t remember exactly what it was, maybe an 1847 Chateau Lafite. And it was awful. It was terrible. But I can tell you that I’ve had a wine that old.
$200 million market cap and growing…
We’ve got a combination of wine, which lots of people love, we’ve got tech and then, the logistics piece. And so it’s sort of a Holy Trinity and I think we’ve been able to excite people at different levels.
And once they’ve understood the fact that there’s so much vertical integration with what we do, we really begin to own a big part of the value chain and by being agnostic and working with anyone and everyone, we’re not out there at the coal face trying to compete for customers sales, but we get a clip of every single bottle that gets moved. I think once people realize the scale of the addressable market, not just here in Australia, but globally, then they get excited.
It’s been a wonderful journey, it’s been such a learning curve. It’s been exciting, exhilarating for me and this week we topped the $200 million market cap. I’m still a bit dizzy from that! But, I’ve set out to create an ASX 200 company. I think the vision and the team we’ve assembled are certainly capable of achieving it. And it’s a matter of just how long it’ll take and we’re just getting on with the job.
Boots on the ground
We work with about 400 brands at the moment. They’ve been accumulated over a year. So there’s roughly 30 or so a month that we’ve been signing on.
When COVID first hit, we realized that the industry had their backs to the wall. And you know, we knew that we relied on their business for our business to survive. And so we came out very early and provided a regional winery support package where we waived a lot of costs and gave them some free credit to use towards getting up and running. And it was just to take away the barriers to entry and to make it really easy and a no brainer for them to get on.
And then we relied then on, I guess the word of mouth too. So then you’re going to get out and tell the rest of the community about us and in regional areas, it’s gold, right?
It really is gold. I mean, so much business is done on a handshake basis and through word of mouth referrals. And so, you know, by planting those seeds and then can continuing to water them, we’ve been able to really get a strong presence in a lot of regions. I think in McLarenVale now we’ve got more than 90% of the wineries that have got cellar doors using our services. And so that’s predominantly through word of mouth.
We’ve got to keep getting it right, because obviously it can work against us. it’s been that grassroots strategy, we certainly threw nothing at marketing really and advertising.
We invested in boots on the ground, getting out and knocking on doors and telling stories and seeing which ways we can help and in getting behind industry initiatives when people were in trouble. Whether it was raising money for bushfire support or whether it was, you know you know, female winemakers or there’s someone trying to raise money for breast cancer.
So, by selling wine, now we just do what we can to get in behind those as well. And I think that when people see that you’re trying to be a good citizen within the industry, then, they accept you into that space and welcome you with open arms.