It’s clear US direct-to-consumer wine business Full Glass Wine believes in the category’s prospects. The company has made seven acquisitions in 17 months.
The two most recent deals were announced in December, with the California-based business snapping up US peers Wine Access and Cameron Hughes Wine.
Go deeper with GlobalData
Last week, Just Drinks spoke with Full Glass Wine co-founders Louis Amoroso (the company’s CEO) and Neha Kumar (its COO) to discuss the group’s recent expansion and the outlook for DTC wine sales in the US, which have – perhaps understandably – slowed from their pandemic highs.
Dean Best (DB): You’ve had a pretty active year or so with a flurry of M&A. How has that reshaping of the business benefited Full Glass Wine?
Louis Amoroso (LA): Where it has helped is in terms of the volume, the people, the diversity of product as well. The day before Thanksgiving, we acquired Wine Access, a totally different type of product than the rest of the companies we’ve acquired. The sweet spot for Wine Insiders, Splash, Winc is $10 to $25 a bottle. Wine Access is really more like $50 to $1,000 a bottle.
Our intent is to have all the different levels. Splash is our entry-level programme and then migrate them up through Splash, through Wine Insiders, through Scout & Cellar, up into Wine Access.
DB: How have you managed to integrate that number of acquisitions in a short order?
Neha Kumar (NK): So much of our team has worked together before. What that allows for is the ability to work quickly and seamlessly at an accelerated pace, as opposed to if we were new and fresh to the industry. This is not our first rodeo of looking at some of these companies as well. We’ve been looking at these companies for a long time.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataNumber two, the integration isn’t happening overnight. For example, with Wine Access, we’ve been in conversations in some way, shape or form with the company for over a year. The integration was happening in the background, in parallel to the transaction, which is very, very helpful. A lot of things – moving them over to our warehouses, starting to integrate things from a tech standpoint – might actually start to occur anywhere from 30 to 90 days before the transaction close.
DB: Did Full Glass Wine manage to grow organically last year, putting the impact of these acquisitions to one side?
NK: It has. Would we like it to grow more? Absolutely. Working from a paid acquisition standpoint is a very important point for us as well. Having said that, one thing we’re not about to do is take spaghetti and throw it at the wall and see what sticks. Some of these things I do need to keep a little bit under wraps but, basically, we’re very, very excited. Our team has been doing various forms of testing for the past four to six months on different customer cohorts that we’ve segmented out. We wanted to see different types of messaging, different types of price points. We’re very, very excited to pedal to the metal over the next 30 to 90 days.
DB: On the delivery aspect, how are you working to get that cost of delivery down?
LA: There’s two pieces. Across the portfolio, six bottles or more of wine ship for free. There’s very few orders less than six bottles. We have three warehouses across the country so that we can cut down on the zones we’re shipping across and it is really important to get it to the consumer quickly. Consumers are expecting more and more with the Amazon effect of ‘Hey, I want to order on Sunday morning and get the product on Sunday evening or the next day.’ Roughly, one-third of our customers get their orders the next day, one-third in two days and, the remaining third, three days.
DB: Have you got any M&A lined up for this year?
NK: I always consider Louis and I are just market opportunists, so, while we’re not actively going out and looking for any deals, if something were to come up, we’re definitely open to the possibility. Right now, our number one focus is to really home in on the existing customers and enhance their overall experience.
DB: What was your sense of how the DTC wine in the US performed in 2024? In 2022 and 2023, the market came under pressure, lapping the boost seen in the pandemic and with inflation putting pressure on consumer spending.
NK: In 2023, 2024, specifically in ‘24, you saw the market starting to stabilise out. If you look at [DTC] wine purchasing in 2024 from the past ten to 20 years, it’s still significantly higher. You just saw a big blip in 2020 and 2021 but it’s a given: you had a global pandemic, so, of course, purchasing behaviour temporarily is going to shift but that doesn’t mean it’s going to stay at those levels essentially.
2024 was a very good year. It gave us the opportunity to pick up these companies at smart pricing
Neha Kumar, Full Glass Wine COO
We do believe it has helped accelerate people to move purchases online. The comfort level has increased significantly. For us, 2024 was a very good year, essentially, because it gave us the opportunity to pick up these companies at smart pricing, which was very good for Full Glass Wine.
We were able to properly consolidate the companies at pricing that was effective and smart for us. 2025 is going to be the year that we’re going to really be able to extrapolate out and grow market share. What I really like in 2024 is we had the ability to create a platform which allows us to better service the customer. Our number one focus is on the customer and servicing the customer’s needs. If we can sort out our internal operations in a way that’s most cost-effective to better handle and service them, that’s where we want to aim towards.
DB: Has the recent pressure on DTC wine in the US led to consolidation in the sector?
LA: Yes, definitely. People got sort of out over their skis, not only in DTC but in multiple areas during the pandemic, where people just didn’t think that consumer behaviour was ever going to change. On the wine side, people started ramping up inventory, started spending a lot of money on customer acquisition, thinking those customers were going to act the same as the customers they acquired over the previous ten years, so they didn’t change their attrition models. They didn’t double or triple down on advertising. They quintupled down on advertising. Then they bought all the inventory to service all those customers coming in the door and they hired tons of people.
Then coming out of the pandemic, nobody reacted quickly enough. They were light on cash, had tons of inventory, with not enough customers to work their way through that inventory and with a lot of employees they brought on they just couldn’t support at that point. That put us in a really good position to be able to come in. A lot of these brands and/or companies were built during what we call the glory days of 2012 to 2018 when money was free. They have good brands but sort of the operational chops were not there.
DB: What percentage of wine sales in the US is now made through the direct-to-consumer channel and where do you think it could get to?
NK: We think there’s a lot of room and potential for growth. One of the things the pandemic has done is it’s accelerated consumer behaviour to be more comfortable with purchasing products online. We are very optimistic and confident. The data is definitely there for us already in our testing to showcase that. A lot of people might have questioned the market if it’s more of an elastic product. On some of these groups, our testing is showing a bit otherwise, which is very interesting.
We anticipate significantly growing market share in 2025
Louis Amoroso, Full Glass Wine CEO
LA: Coming out of the pandemic, the direct-to-consumer wine industry across pureplay, e-commerce companies, the wineries, etcetera, in the US was right around 12% at the peak. Analysts thought it was going to flatten out and then start rising again. Instead, it took a little bit of a dip. I think it went around a 5% decline off of the 12% in 2023 and 2024 and now it’s starting to go back up again. But, you know, 12%. Electronics in the US last year were I think just shy of 50% direct-to-consumer. There’s a massive amount here. We anticipate significantly growing market share in 2025.
DB: Looking at price segments, what have been the dynamics in the DTC wine market in the last year or so? Have cheaper wines suffered and the premium end fared better?
NK: In the past year and a half or two years, the way that I would essentially look at this – and I think you’ve alluded to this in a question in some way for the past few questions you’ve asked, so I’ll just go directly to it – direct-to-consumer overall is down. I’m not just talking about wine. It’s every single kind of product in direct-to-consumer. But, if you’re looking at it and direct-to-consumer is down, compared to what? Compared to the previous couple years, where it was a blip of a global pandemic, or is it down compared to 2015, 2016, 2017? If you’re looking at a long enough time horizon, direct-to-consumer wine is still up. If you’re comparing it to 2020 to 2021, direct-to-consumer isn’t going to be up because that was a global pandemic – but it’s that way across the board, the majority of direct-to-consumer products.
We’re seeing it actively – and that’s why we have a high degree of confidence, otherwise we wouldn’t be going around buying all these companies – that we have the ability to scale this. Now, I just want to be mindful about how we talk about this as well; all these companies, when they were running separately, you need x number of directors of compliance. When you have everybody under one umbrella, SG&A can be specifically more streamlined, thus allowing us to essentially take additional costs. We’re able to essentially run the business more efficiently and then take the capital resources and allocate them towards increasing the customer experience.
DB: When you look at sales opportunities, is it the pricier end of the market that gets you most excited? Many wineries are looking to premiumise their ranges.
NK: A lot of them are going to try to go toward premium products because they need to be able to justify the price in regards to shipping. We just look at the overall customer life cycle, right? We’re looking at what they’re going through in various phases of life. From somebody who’s just trying wines, to somebody who wants to try higher-end wine, somebody who has a different use case for the wine. That’s really what we’re focused on.
Some of our brands are volume plays and we have the ability to do that versus high-end wineries if they’re shipped in one or two bottles [and] that gets to be a bit of a challenge. We encourage our customers to do six bottles or more for all of the brands, except for Wine Access because Wine Access is a higher premium wine and so therefore you can justify the shipping costs.
We’ll encourage upsells on a six-bottle pack and we’re trying to move them into a 12-bottle pack. The shipping cost per bottle goes down exponentially and that’s what makes the whole model work. Now, why is someone going to want to go from a six- to a 12-pack? It’s really us messaging in regards to discovery and that’s where some of the current tools work well and then some of the tools that we’re building up, from an AI standpoint, are going to really connect the dots in a magical way.
DB: What are you forecasting your annual net sales to be in 2025?
NK: We anticipate doing a minimum $200m this year with our existing brands as is.
DB: Is the business profitable?
NK: Yes.
DB: Do you give that number out?
NK: No, not yet.
DB: Are you looking to bring in more funding this year?
NK: It depends. Our number one focus is on whatever is going to help us with the existing customers. I’m not saying that to throw that around. You want to remember we’ve acquired so many businesses and so many customers so quickly in 18 months, and we essentially have a corp dev team of two. You’re looking at them.
Our focus is the existing customers and making sure we can follow through with what we told them we’re going to do. That is our number one goal here. If what is needed there is potential funding, then, yes, that will be there on the horizon. Have we had conversations with people who are interested in investing in our company? Absolutely, and we’re very fortunate that we have good capital currently behind us and the ability to bring on capital relatively quickly if we need it.
