How Naked Wines is hoping to help winemakers weather the market storm

Grapevines may be incredibly fickle plants, but as 2020 has shown, grape growers cannot afford to be so demanding.

Many entered 2020 off the back of one of the worst droughts in living memory, only to find themselves immediately beset by bushfires and then a global pandemic. And just as things began looking up, one of their major export markets – China – imposed trade tariffs on Australian wine ranging from 107 per cent to 212 per cent.

For smaller winemakers especially, this latest setback is a cruel blow, when considered against everything else they have had to endure this year.

The team at the Naked Wines was not prepared to see winemakers take another hit, however. The direct-to-consumer wine business quickly drew up a range of support offerings, including a $5 million fund to ensure those independent winemakers hit hardest could still achieve a fair price for their production.

Naked Wines’ head of marketing and sales (and former Unilever marketing director), Paul Connell, said the idea for the support package came about when the company realised 15 per cent of its 57 winemakers would be personally impacted by the tariffs.

“The larger companies have got the balance sheets, the resilience, the channels, and the financial backing to weather these storms,” Connell told CMO. “Whereas for smaller winemakers, what we were already hearing was contracts being dropped and grape growers being left with products they couldn’t sell.”

Connell said Naked Wines’ main concern was opportunistic retailers would take advantage of the situation to renegotiate contracts and seek to acquire product at reduced prices. The ‘Stop the Squeeze’ campaign was designed to send a signal that Naked Wines would not be seeking to exploit the situation to the detriment of winemakers.

“It’s about ‘what can we do in a genuine way that will help our wine makers’, and maybe offer a lifeline to those independents that won’t have the support, and also to take a stand on what treating independents [winemakers’] right in Australia should look like,” Connell said.

The idea of the fund is to ensure Naked Wines has the capacity to purchase additional product from winemakers, so they won’t be forced to sell at a discount simply to maintain cashflow.

“It’s a fund for wines at the rates it should be brought for,” Connell said. “We have committed for existing and new wine makers that it has to be fair price for everyone around the table.”

Connell hoped the various elements of the campaign will also send a signal to wine retailers to support an industry that has struggled through 2020 and believes it will tap into the sense of community support that many other brands have connected to through the year.

“It was a little bit of a call to arms to winemakers to get involved, and to other retailers to ask that we all do the right thing, and that these positive behaviours we have seen during COVID live on,” he said.

“Through 2020, there was a massively democratising moment where suddenly a much large portion of Australia was comfortable with shopping online. But if you look at the sentiment at the time, there was a real want and willingness to know where their money was going and who was benefitting.”

The campaign also aligns to Naked Wines’ purpose of getting the stories of winemakers in front of consumers, to raise their knowledge of independent producers and the work they do.

“If we are going to do our job of helping people get closer to independent wine makers then we have got to be able to confidently talk about them as craftsmen and women and share their best work, not just prices and deals that activate,” Connell said.

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