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Founded over a glass of red

Online wine marketplace Winery Lane is charting expansion after raising more than $1.2 million in pledged investment through an equity crowd-funding initiative.

The online retailer, which stocks a range of independently produced wines, will bring pledges onboard as investors in the business as part of the process, facilitated by equity-funding platform Birchal.

With still just over six days to go, co-founder Stephen Mobbs said the business had already smashed its initial target of $250,000, and that the funds would be directed at scaling up the business.

The current campaign is for expressions of interest, but a formal funding campaign will be launched based on the pledges next month after the company changes its structure to allow for an influx of additional shareholders. Investors will receive perks for their support, including a 32 per cent discount on all purchases they make with the business.

Winery Lane aspires to occupy a niche in Australia’s booming online wine market, focusing on providing independent winemakers with an additional path to market that’s relatively risk-free and prioritises telling their stories.

“Our proposition is that we’re looking for wine lovers, and we want to be able to engage with them on a regular basis, it’s not just about making purchases – it’s the stories behind the wine,” Mobbs told Inside FMCG. “We invest really heavily in content development for each winery, [because] they don’t have the funds or expertise to develop a lot of that themselves.”

Winery Lane operates on a consignment model, whereby winemakers a charged a commission on sales through the platform, shipping products to a central warehouse operated by the e-tailer. Mobbs said that while traditional market juggernauts Coles and Woolworths had done a lot to provide smaller wineries with a pathway to market, Winery Lane’s less adversarial approach was more compelling.

“The Coles and Woolworths have had a fantastic run … but we feel like our offer is more compelling,” he said. “We’ve removed the adversarial type conversations that wineries might have with buyers, we work off fixed margins, it’s not about waiting for another winemaker to come in and offer a higher margin.”

Growth in online shopping has opened up the wine market in recent years, with businesses such as Vinomofo and Cracka Wines also capitalising on the willingness of suppliers to look outside of traditional channels. But, even as the market becomes more competitive, Mobbs is confident that Winery Lane’s niche will deliver incoming shareholders returns.

Mobbs said Winery Lane was founded over a glass of red wine. After returning from a trip to the Yarra Valley, he and co-founder Cameron Harris recalled a conversation with a winemaker, who explained to them that even with numerous awards and recognition–it is still quite difficult, costly and time-consuming for small producers to be heard in today’s crowded marketplace.

“As consumers, [we] also knew how difficult it was to discover great wineries and even more difficult to buy from some of them. So, [we] set about creating Winery Lane. [Our] aim was to bring wine lovers and winemakers together like never before,” explained Mobbs.

Birchal, CEO & co-founder, Alan Crabbe told Inside FMCG Winery Lane’s Expression of Interest Campaign has taken off with over $500,000 pledged within the first 24 hours.

“With the passing of the equity crowdfunding legislation late last year, the red tape has finally been cut and we are now able to work with a group of innovative and fast-growing brands, like Winery Lane, to help them raise capital,” said Crabbe.

“Running Expressions of Interest is extremely important because it gives companies the opportunity to engage with potential investors. It’s also a great chance to gauge the level of interest before the raise goes live.”

Inside FMCG: How does Winery Lane differ from other competitors?

Stephen Mobbs: Winery Lane is only focused on identifying and working with Australia’s best independent winemakers. [We] are both committed to helping wine lovers discover the hidden gems in the Australian wine scene.

Winery Lane operates on fixed margins, asks the winemaker to decide on the range which best represents their brand and vineyard, we also ask them to set their price and we only work directly with the winemakers to build ongoing relationships.

Unlike any other retailer, [we] invest heavily in content to help build the winemaker’s brand. We build content which informs, educates and entertains our customers but importantly, the content shares the story in every bottle.

Inside FMCG: Tell us the process of selecting  wines for your consumers.

Cameron Harris: When we evaluate any winemaker for inclusion into Winery Lane, there are a several key themes that we focus on. We always look for independence. This means the winemakers we work with will be varied but in every case the people that run the business on a day to day basis will have real autonomy.

We consider their track record of quality and consistency as this ensures Winery Lane is known as a trust mark for consumers unsure of a new winery. We also take into account the winery’s resources and its ability to consistently produce wine of the highest quality.

Inside FMCG: What’s the most popular wine at Winery Lane?

Stephen Mobbs: We believe wine lovers will have three key drink occasions and wines they will drink during those occasions. The first is the mid-week special, the second is the wine they bring out when you have spent time preparing a good meal to share with a loved one and the third occasion is the wine you bring out when you are looking to impress.

Each of these occasions has different price points for every consumer. For some wine lovers their mid-week special could cost as much as another’s wine they use to impress. Ultimately, drinking wine should be about enjoyment and sharing the moment, not how much you’ve spent.

Inside FMCG: Any advice on creating a startup company in the wine industry?

Stephen Mobbs: Speak with your customers and continue to speak with them regularly. No one operates a business in a vacuum, so be prepared to constantly evaluate what is important to your customers to learn, change and iterate.

Inside FMCG: Will you put up a brick and mortar store in the future?

Cameron Harris: It would be naive of us to rule it out. That said, we are the early planning stages for something we know wine lovers are going to want to be part of.

Inside FMCG: Do you plan to expand outside Australia?

Stephen Mobbs: Our focus is currently on the Australian market and helping wine lovers discover Australia’s best independent winemakers. When the time is right, we’ll evaluate our options which would include expanding into other markets.

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