Specialist
Former Director at Naked Wines plc
Agenda
- Key trends and demand dynamics within the e-commerce wine industry
- Coronavirus top line and margin implications for Virgin Wines
- E-commerce channel development and competitive dynamics
- Potential industry consolidation and medium-term growth trajectory
Questions
1.
Could you outline 2-3 key trends in the wine industry pre-coronavirus and how coronavirus has impacted the wine and alcohol industry in the UK?
2.
How should we address the TAM of the wine industry? How big is the premium vs the value segment? What does it mean to be a premium wine regarding price points and how those differ?
3.
What growth has there been online, D2C and in subscription models in the wine industry?
4.
How has coronavirus impacted the wine industry as a whole?
5.
Have online retailers, such as Virgin Wines and Naked Wines, generally struggled more with acquiring or retaining customers during the pandemic? How might this evolve as we come out of the pandemic?
6.
Do you think retaining customers that were acquired during the pandemic will be as much of a challenge as it was prior? Do you think there are any nuances between a pandemic customer and a pre-pandemic customer?
7.
Did you notice any change in buying patterns through the pandemic with any larger purchases made and order greater qualities vs pre-pandemic? How do you expect this to play out longer term?
8.
How has Virgin Wines performed throughout the pandemic? You mentioned Naked came into some capacity constraints and stopped taking on new customers. Was this the case for Virgin as well?
9.
How does Virgin Wine’s business model work and how does it differ to other players you have mentioned?
10.
What would you say are the key benefits and disadvantages of Virgin Wines’ business model vs those of the other players?
11.
Do you have any estimates on percentage of sales players such as Virgin Wines sell at discount? As you mentioned, I think that is quite a prevalent part of its model.
12.
What are the average ranges and costs that it takes to acquire a customer? Who do you think Virgin Wine’s target customer audience is vs Naked and other players, or do you think it’s quite blended?
13.
You mentioned Virgin Wine’s wine and product portfolio is quite different to Naked’s in that it’s somewhat more refined. Could you elaborate on that, touching on its advantages and disadvantages? You mentioned the scale effect is an advantage.
14.
How does Virgin Wine’s pricing compare to competitors? Does it have much pricing flexibility given that it can be quite price comparative in the customer’s eyes vs some of the grocery retailers?
15.
How do you think Virgin Wines will differentiate itself? What levers can it pull to outperform the other big players? Do you think there’s anything in the business that lends itself to outperform, or anything it needs to change?
16.
What are the various components that make up the unit economics for these businesses and where the real costs sit?
17.
What is the rationale behind the moves into the WineBank? Is that to manage and improve working capital, cash flow and the LTV of a customer?
18.
What are your best- and worst-case expectations for wine e-commerce growth in the next 3-5 years? Are we expecting quite high double-digit growth? What are the underlying drivers of those expectations rolling out?
19.
You mentioned some barriers to entry, one being the delivery system. What other barriers to entry in the wine market should we monitor?
