This overview of Naked Wines is based on a combination of nine years of my own Nakedwines.com reviews and extracting interesting information out of their Annual Report (FY2022) (PDF download) for investors (it’s a publicly-held company on the London Stock Exchange). As this report is a legal disclosure, I assume that all information in it is true and accurate. I have not personally vetted the data.
Quick note: throughout this review I’ll refer to Naked Wines in two ways. When I talk about the company or their actual wines, I say “Naked Wines” and when I talk about the website you buy from in the US and the subscription service, I say “Nakedwines.com.”
What is Naked Wines? Naked Wines is a unique, large-scale winery where the wines are produced by independent winemakers, supported by Naked Wines and its customers. You must be a member (they call them Angels) in order to purchase from Nakedwines.com. Wines are listed at discounted prices, which reflect the potential retail price for these wines. Since the wines are sold direct to consumer (DTC), the discounted price reflects the absence of distributor and retailer markups.
Being an Angel means you make a monthly deposit into your Nakedwines.com account. These monthly deposits give Naked Wines predictable revenue, which lets them invest in production with these independent winemakers.
It is reasonable to think of Naked Wines as a crowdfunded winery. It is not anything like Shark Tank — as Insider.com’s creative reviewer implied. The system is more like Venture Capital, but the capital comes from Naked Wine’s subscribers. If you called it a VC fund, it would be roughly a $76M fund.
FYI: I find great wine deals so you don’t have to. To keep me on the hunt, I earn a commission when you buy wine based on my recommendations.
Not exactly. Yes, it’s a subscription in that you make a monthly payment to be spent on wine. No, it’s not a subscription — they don’t automatically ship your wine, they don’t pick your wine for you (you choose every wine you buy), and you decide when to have it shipped. Read my Nakedwines.com review.
They have added a Wine Genie option which does indeed pick wines for you and autoship them like a subscription, but it is not the default membership and you have to opt in to it separately.
Yes! Naked Wines is a winery. Instead of having a small number of staff winemakers (like most wineries), Naked Wines has a mix of independent winemakers and one Head of Winemaking who produce wine for them.
Not really. Aside from the fact that it’s a publicly traded company — and those are fairly rare in the wine industry — other companies who produce wine at a large scale under their own label work under different business models.
This UK-based company pioneered a new way of both making and selling wine and they’re still the only ones who do it this way. There are four components to Naked Wines which make it unique: their winemakers, their customers (Angels), their pricing model, their wine industry support.
Perhaps the most important aspect of Naked Wines is their 266 winemakers. Naked Wines contracts with winemakers of all experience levels around the world to bring a diverse assortment of wine to their loyal customers. I go into greater detail about the winemakers in another article, but here’s a quick breakdown of how they’re able to do this.
A typical winemaker at a small winery has to:
Most of that is a big old distraction from the thing the winemaker actually wants to be doing (growing, harvesting, making, and bottling). Naked Wines knows this and so it handles all the administrative and funding bits for their winemakers.
The company has an open invitation for winemakers to come to them and say “I want to make [choose your grape, blend, or style] wine from [choose your vineyard or region].” Often a winemaker has already secured the fruit they need and they really just need capital to make it happen — and someone to sell the wine for them.
The two parties agree on a range of wines and styles, and uniquely, a price the winemaker will be paid for her efforts. Winemakers can choose a setup which includes a monthly retainer or a per bottle fee, and also possible sales bonuses.
In an era where consumers are becoming more aware of exploitative practices, Naked Wines stands out as winemakers are all essentially operating on their own terms, focusing on the part of the business they care about most.
Unsurprisingly, the company is pushing hard on promoting the winemakers’ stories this year. I surmise they believe that’s the key to winning over younger wine drinkers who are more concerned with who made a wine and how than the taste of what’s in the bottle or which awards it has won. This definitely positions them differently than their main DTC competitor, Firstleaf.
As someone who interacts with the startup world pretty regularly, I can’t help but notice the specific use of the word “Angel” to describe one’s customers. In the startup world, Angel investors are those who offer early-stage capital in small amounts for relatively high valuations. This is, in a nutshell, the Naked Wines business model. Except in their case, the Angels contribute $40 a month and instead of returns, get exclusive savings on future wine purchases.
Because Naked Wines controls the winemaking and the sales channel — they have all of the information about their wines and they know their customers really well — they offer ways to buy wine that are easier than most retail stores — especially Total Wine and Wine.com.
Angels get to shop at Nakedwines.com based on a different premise than the traditional store which only thinks about color, grapes, regions, vintages, and points from critics. They can shop wines all those traditional ways, but also:
The $40 monthly deposits made by Naked Wine’s 964,000 active Angels (those who have placed an order in the last twelve months, across the US, UK, and Australia) add up to a lot of money available to invest in cool wine projects for indie winemakers.
Because the company has an existing customer base with no middlemen (distributors, wholesalers, or importers) to pay, their cost to get wine to market is lower than competing wineries.
Theoretically this means that instead of paying for 15-20% markup that those middlemen might have added into the mix, you can buy wine of similar quality at a lower price — and for a long time, that was their lead value proposition.
Even though their messaging no longer leans as heavily on their discounted wine prices — you still get somewhere between good to great value for whatever you wine you buy from them, at whatever price you pay.
One of the reasons they’re moving away from the value-focused talk is that they’re beginning to offer premium wines over $50 a bottle. Some of their ultra premium wines offer a compelling look at why Napa prices are sky-high and whether they’re justified. Here is a selection of those premium wines and “suggested” retail vs Angel price.
|Wine||Region||Market Price||Angel Price|
|Ode to Harold Cabernet Sauvignon||Oakville, Napa||$126.99||$69.99|
|Ken Deis Reserve Cabernet Sauvignon||Oakville, Napa||$109.99||$35.99|
|Viña VIK La Piu Belle, Red Blend||Chile||$104.99||$54.99|
|Trisilice Champagne||Champagne, France||$99.99||$48.99|
|Von Strasser Cabernet Sauvignon||Diamond Mountain District, Napa||$87.99||$48.99|
There are two other especially noteworthy pricing features at Naked Wines, and these relate to treating their Angels fairly.
When Angels buy wine, they are encouraged to say whether they would buy it again. This “rating” is surfaced in the store where you pick your wine for all to see. When too few Angels “would buy again,” Naked Wines drops the Angel price. But they ALSO go back and provide a credit for the difference for everyone else who already bought the wine (whether they would buy it again or not).
I like this feature because it acknowledges that the wizards at Naked Wines aren’t infallible and even more so because it treats their customers fairly.
The second aspect of their pricing model which is highly customer-centric in a unique way is a 100% Money Back Guarantee. Many other wine clubs (but not wine stores) offer customers a Satisfaction Guarantee — if you don’t like a wine, they’ll offer you a credit toward your next purchase. Naked Wines takes it one step further: at any time you can ask for a full credit of the wine you’ve just received and a full refund of any unspent funds in your account.
This is, frankly, the most customer-centric policy I’ve ever seen. It works for them because it takes your risk out of the decision to try the wine and because they believe they’re making wines most people will like.
One of the cool things about the wine industry is how they are generally supportive of other winemakers instead of staunchly competitive. This plays out more among smaller family wineries within a given wine region, as they deeply understand how their own fortunes are directly tied to those around them and those who work for them.
You see it less often with really big companies in the wine space, but Naked Wines has a history of supporting its industry in all three of its markets (US, UK, and Australia).
At this point, most of us are familiar with how “safer at home” wreaked complete havoc on businesses which rely on in-person sales to stay afloat. One of the less-talked-about industries hammered by the pandemic were the wineries in “wine country” around the world. With restaurants and bars closed, a lot of independent wineries were left holding a lot of inventory and nowhere to sell it. The wineries who already had robust wine club memberships and allocation lists fared well, but for wineries whose focus hadn’t been direct-to-consumer or relied on tasting room sales, they were in trouble.
In response, Naked Wines established the COVID Relief Marketplace — a $5M fund to purchase inventory from wineries with nowhere else to turn. While they didn’t accept every winery who applied, they were able to help some amazing wineries make it through the pandemic.
This assistance came in the form of purchasing inventory, which was then sold to the Naked Wines Angels.
Here is a list of well-known wineries (and Naked Wines winemakers with outside projects) who signed up for assistance from Naked Wines (most stuck around to work with Naked Wines after, as a thank you and because the business model works for them):
There are probably few people in the world who were unaware of the travesty that was the 2019-20 bushfire season in Australia. Most of us were stuck at home because of the pandemic, so we were inundated with news coverage of the horrifyingly destructive fire which burned approximately 11,500 square miles of land, much of which was wine country.
This time Naked Wines teamed up with their Angels to raise money to split among the Naked Wines winemakers affected by these fires. They raised $329,000 among the UK, US, and Australian Angels and the money was donated to organizations Rural Aid and VineAid. Here are the winemakers who benefitted from this generous community:
Four pages of the Naked Wines Annual Report are dedicated to how the company is becoming more sustainable. They’re looking at sustainability across multiple channels (as they should) which includes how they treat people, how they deal with their waste, and how to manage their supply chain sustainably.
Most of this section of the report talks about the People portion of their sustainability efforts, especially Diversity, Equity and Inclusion and Community initiatives which are plentiful, though hardly fall under the rubric of sustainability.
Sustainability is a hot topic in every industry, but especially the wine industry where a large number of the participants are farmers concerned with both stewardship of their land and crop yields. There has been a gross amount of greenwashing in the industry where claims of sustainability are vague and may not account for the things consumers care about most.
A big question for the industry is why consumers don’t seem to actively seek out sustainable wines. They tell us they want to buy sustainable wines, but they aren’t really searching for them online or asking for them in stores in the numbers we’ve been led to believe they are.
One explanation of this was offered by Sarah Shadonix, the Founder and CEO of Scout & Cellar wines when she presented at the International Bulk Wine & Spirits Show. At 13:34 she talked about a bunch of consumer research she did where she discovered that people care more about whether a wine is better for them than they care about whether it’s better for the planet. This is basically the exact opposite of what the wine industry is focused on, which is stewardship of the land.
In terms of cultivation and winemaking, those decisions are largely left to their independent winemakers who often are the viticulturalists in addition to being the winemaker. These folks are usually super keyed into making their land healthier because it generally makes better tasting wine. Naked Wines doesn’t go past highlighting a couple of winemakers in discussing this aspect of their “decarbonisation.”
As of March 15, 2023, there were still very few Organic or Biodynamic options on their site. A lot of wines are made from organically-grown grapes, but that doesn’t always get announced, so there are likely other wines which are organic, but we don’t know which ones. According to my contact at Naked Wines, there are some existing winemakers working towards full organic certification of their vineyards so there will be more options in the future (not a lot more).
Naked Wines looked at their carbon impacts across four sectors: cultivation, winemaking, glass bottles, and imports. They immediately saw their quickest reduction in carbon footprint was in sourcing lighter weight bottles. The carbon footprint of glass bottles is astonishingly high and some bottles weigh as much as two pounds – EMPTY! They reduced the weight of 6 million bottles in 2021. It’s great for the planet, but it’s nicer for us wine drinkers, too. I don’t need a workout when I pour my wine.
Naked Wines has been experimenting with putting some of their premium wines in boxes in the UK market. There is no sign those will find their way stateside.
For more on boxed wine and the carbon cost of heavy glass bottles, here are some great reads:
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