Digital wine club Winc is going public, filing an initial public offering on the New York Stock Exchange under the symbol WBEV.
The initial public offering price is currently expected to be between $14 and $16 per share.
BofA Securities and Canaccord Genuity are acting as joint lead book-running managers for the IPO. Craig-Hallum and Roth Capital Partners are also acting as book-running managers, and Benchmark Company is acting as co-manager. Winc plans to offer 5 million shares of its common stock and will grant the underwriters a 30-day option to purchase up to 750,000 additional shares of its common stock at the public offering price.
According to the S-1 filing, Winc sold more than 430,000 cases of wine in 2020, and the company's subscriber base stands at approximately 120,000 members as of June 30, 2021.
And in line with higher direct-to-consumer wine and liquor sales during the pandemic lockdown, Winc said it has experienced "a significant increase in DTC demand" since March 2020. Revenue grew by 77.5% from $36.4 million at the end of 2019 to $64.7 million at the end of 2020, and then another 20.4% from $29.2 million over the first six months of 2020 to $35.1 million for the first six months of 2021. Losses narrowed from $8 million at the end of 2019 to $7 million at the end of 2020.
Founded in 2011 and based in Los Angeles, Winc has been at the forefront of a new group of wine clubs that emerged in the past decade as an upgrade to the old guard of programs attached to the likes of credit cards, airlines, and similar sources. To start, rather than just sending six reds or six whites (or some mix of the two) in a single box every few weeks or months, Winc homes in on a prospective member’s palate. Even if the consumer isn’t a wine expert, Winc’s opening questionnaire solicits responses about their tastes in food, spices, and other beverages (such as coffee or tea) to produce a more comprehensive preference profile. From there, members can still make a final decision on which bottles they want or not.
While Winc underscored in the S-1 that it sells across all price points with a special interest in highlighting premium wines (bottles priced between $10 and $30), the Summer Water rosé stood out as one of the company's bestselling wines annually. Cases of Summer Water sold increased from 29,000 in 2019 to 45,000 in 2020, representing year-over-year growth of 55%. The pink wine generated $6.1 million in revenue in 2020 alone, and $18.2 million from 2016 through 2020.
And Winc has been changing up the kinds of wines it sells, too, with a notable push into organic wines. The company's first foray into natural wines was the release of Cherries & Rainbows, made with sustainably farmed grapes and zero added sulfur at an eco-friendly winery in France’s Languedoc-Roussillon region. The company says it sold out “almost immediately.” Given its popularity, Winc took a bigger step in 2020 by launching Wonderful Wine Co., an entire portfolio of sustainable and low-sugar wines made with organic grapes and produced and packaged with a low-carbon footprint.
And earlier this summer, Winc acquired Natural Merchants, an importer of natural, organic, and biodynamic wines as well as a distributor of wines sold at Whole Foods and Trader Joe’s. After this acquisition, over half of Winc’s portfolio is now made up of organic, natural, and biodynamic wines. While the brand's focus has primarily been direct-to-consumer sales, Winc is growing its wholesale retail arm, which serviced 7,700 accounts in 2020. In the S-1, the company says it plans to expand that figure to at least 50,000 retail accounts within the next five years.
And the brand added a new sake bottle to its digital shelves in August. A note in the S-1 hinted at more non-wine beverages on the way, as the company writes its "omni-channel platform could be applied to entirely new categories, such as spirits, beer, and nonalcoholic celebratory beverages, significantly increasing our addressable market."
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