A Brazilian wine e-retailer toasts a 90% growth rate in web sales
The vast majority of e-commerce sales still comes from wine, but Wine.com.br is rapidly moving into other specialty beverage markets, including beer and coffee.
Wine.com.br likes to be first—or almost first—in certain segments of Brazilian e-commerce. Wine.com.br, No. 46 in the Internet Retailer 2014 Latin America 500 , has been selling wine online in Brazil since 2008. Its web sales grew 89.1% to an Internet Retailer estimated $111.03 million in 2014 from $58.7 million in 2013.
Wine.com.br, which claims to have nearly 90,000 wine club members and to have sold nearly four million bottles of wine in its seven-year history, believes the key to growth is getting in early on in a promising niche, says chief marketing officer Ricardo Flores. “We like to be first,” he says.
Now with its web-based wine business established, Wine.com.br wants to expand and be first—or at least in the first group—in specialty beer and coffee. In 2014 Wine.com expanded into selling gourmet coffee online. In summer 2014 Wine.com.br announced it was investing about $23 million to build its own coffee business, which includes grinding and roasting its own beans. The company began construction on a standalone plant last year and expects to begin full production sometime in 2015. The coffee plant could eventually have a work force of more than 200 employees, Flores says.
In March, Wine.com.br also spent an undisclosed sum to acquire Monodor Patents SA, a company specializing in patents, research and development of coffee-capsule systems, and Mocoffee, a global manufacturer of coffee-capsule products and coffee as well as other hot-beverage products for consumers and businesses. Wine.com.br acquired Monodor and Mocoffee because they give access to products that include coffee machines and beverage capsules that encompass a variety of flavors and blends of coffee, tea and other beverages.
The deal to acquire Monodor and Mocoffee and also gives Wine.com.br a base to acquire more specialty beverage customers in Brazil and in 17 other countries in Europe and elsewhere. “There is a window of opportunity in coffee,” Flores says. Coffee production and consumption already are big business in Brazil. The county has been growing coffee beans since the 19th century, and in recent years Brazilian exports of coffee have topped more than $7 billion annually, according to the Brazilian Coffee Industry Association. Coffee drinking also is an essential part of daily life for many Brazilians. Each month Brazilians consume nearly 20 million bags of coffee. That’s more than twice the amount of about 8.2 million in 1990, the association says.
There’s plenty of coffee already for sale in Brazil, but Wine.com.br says demand for specialty gourmet coffee and related beverages is growing. Wine.com.br also says it can leverage its current e-commerce model, customer reward program and deep editorial content to appeal to specialty coffee drinkers in its home market and around the world.
The e-retailer also has developed expertise in fulfillment, a big challenge in Brazil, where the national highway system is notorious for its poor condition and package delivery can be unreliable. But Wine.com.br.com has made big investments in fulfillment and delivery. About 99% of all Wine.br.com deliveries arrive on time because 85% of all packages are shipped by air and then delivered by a cadre of licensed local delivery companies. In certain big cities like Sao Paulo and Rio de Janeiro and elsewhere, it also has a fleet of delivery vehicles and company drivers to make deliveries.
Wine.com.br’s wine customers are educated buyers who like the speed and ease of shopping online but also like to be informed on the products they purchase, Flores says. These customers also expect on-time delivery and great customer service, he says. Wine.com.br anticipates attracting the same kind of coffee and beer buyers, and Flores says he sees an opportunity to get into those categories early and win loyal customers.
Another area for expansion is specialty beers. Only a small part of Wine.com.br’s total e-commerce sales are from coffee and beer, but in addition to branching into coffee, Wine.com.br is developing an e-commerce program for microbrewed beers. In October Wine.com.br launched WBeer.com.br, an e-commerce site featuring 300 specialty beers. As with its wine site, the beer site also offers single-product sales and a subscription-based beer club and deep content to educate specialty beer drinkers on the individual brews. The company’s distribution and fulfillment hub in Espírito Santo, a city in the southeastern part of Brazil, ships all orders for beer and wine.
Wine.com.br expects plenty of growth ahead for niche web retailers in Brazil, Flores says. But the company also needs to be quick to seize new market opportunities. “There are specialty beverage markets that are wide open,” he says.