PR NewsWire | Jul 15 2021
SYDNEY, July 15, 2021 /PRNewswire/ — Naked Wines Australia, a leading company that connects Australian and New Zealand everyday wine drinkers to the best independent winemakers in the country today announced an increase in local sales, totalling $84.2 million[1] for the year ending 29th March 2021, up by 42%[2]. This sees the Australian results sitting in line with the company’s global results achievements.
These results have been driven by evolving consumer purchasing behaviours, catalysed by the COVID pandemic; with customers creating an online shopping boom whilst at the same time more deeply examining the impact of every dollar they spend, with a strong purchasing stance to support local businesses and communities – along with retention and repeat purchasing sitting at a new high.
Alicia Kennedy, Managing Director (MD) from Naked Wines Australia said, "These results show for Naked Wines – and its growing community of independent winemakers and Angels[3] (our customers) – we’ve been able to achieve another standout year for the business, growing even further from what was already a landmark result the year prior,"
"As we continue to grow our market here in Australia, we also continue to grow and push our mission; to disrupt the wine industry through a strong direct-to-consumer (DTC) model which is for the benefit of all wine drinkers and winemakers,"
"This continued digital acceleration has seen Naked Wines hold its position as the fastest growing and most popular DTC wine business, and the largest in the world,"
"These results are proof that this business model is in demand, meeting a new shift in consumer needs and providing independent winemakers a much-needed selling model with a point of difference for the industry more broadly,"
"As the COVID pandemic continues to be a variable and evolving factor for all businesses, our conviction to continue backing local independent winemakers, plus honour all our commitments and fair prices to consumers is no small feat – and one that has given the business clear vision and focus during continued disruption. This mission and our role is something we take on with much pride as a standout example for the industry,"
"Overall, our results show, the challenging environment has our businesses set up for the future, we have a bigger and better business than before, with customer growth and sales of the best independent Australian wine surging" said Ms Kennedy.
MAJOR TRENDS DRIVING NAKED’S GROWTH
The effects of the COVID pandemic on Naked Wine Australia’s business are now clear, with the company being in an enviable position to capitalise on online purchasing, "In the last year we’ve experienced first-hand the wave of customers flocking online to buy wine during the COVID crisis and they have happily found a home at Naked with an established and reliable retail platform they can trust," said Ms Kennedy.
"But more importantly we have seen these purchasing behaviours endure post lockdown as Australians realise our business model and platform literally gives customers direct access to our winemakers and their products. Wine lovers can connect more deeply with those winemaker stories and where their wine comes from – we can see this strategy producing impressive customer retention figures,"
These significant customer trends are generating repeat business in Australia, with the results showing an increased demand for Naked’s offering and an increase in contribution from the Australian repeat customer base, which grew 44% in the last year.
The business believes consumer interests will also continue to be strongly shaped towards local purchasing due to the known issues plaguing the industry off the back of the summer 2019 bushfires, followed by the smoke taint quality challenges.
"The business has also seen greater interest from consumers as they take on an understanding of how current ‘big bottle’ retail conditions and major market forces can negatively affect the bottom line of smaller independent winemakers,"
"Being independent means your margins are often squeezed, with little wriggle room, and you are more susceptible to rapidly changing market conditions, with less of an ability to quickly bounce back. This is when independent winemakers need really honest, reliable support from an ethical purchaser that isn’t using these conditions to take advantage of price. We know this is why the waitlist for winemakers to make a home at Naked is only growing,"
"There has never been a better time to be a business selling independent Australian wine, and there has never been a more important time for independent winemakers to get that consumer support and understanding of the retailing conditions that don’t favour them,"
Looking to the future, Naked is focusing on growing their customer base in the longer term; with investment in new customers growing 89% in the last year to $10.1million[4], "What’s most encouraging is that we have seen a continued strong performance in our Repeat Customer base in the first two months of FY22, so we believe that whilst many people will have undoubtedly tried us for the first time throughout the pandemic lockdowns, the experience is one they see true value in – the best wines, at the fairest prices and at the same time being part of a movement that backs independent Australian and New Zealand winemakers vs lining the pockets of big bottle shops."
NAKED; THE DISRUPTOR FOR THE BETTER
This last year also saw Naked Wines release a major rescue fund for independent winemakers facing tough times due to the China wine tariff action.
The initiative, called Stop The Squeeze, is the only lifeline of its kind for the independent industry, "We launched the rescue fund and also an ongoing business pledge; to honour all commitments to its winemakers, not to drop contracts, commit to delivering fair prices to winemakers and customers, and finally deliver a AUD $5 million rescue fund for winemakers feeling the grip of the tariff hike".
Stop the Squeeze is the latest in numerous greater purpose campaigns for independent winemakers from Naked Wines Australia including;
- Raising more than $329,000 to help Australian winemakers and their rural communities devastated by bushfires as well as,
- Establishing a COVID relief fund of AUD $5 million, which has so far benefitted more than 40 independent winemakers globally.
"For independent winemakers – who are already operating on small margins and being constantly squeezed by big bottle major supermarket chains here in the domestic market – impacts such as COVID or China’s import tariffs have the potential to be a slow death to their businesses,"
"When you have a bigger business, or are owned by Coles or Woolworths, you have more breathing room financially and there is a greater ease in weathering these big disruptive market storms,"
"But if Australians want to see a truly local and diverse wine industry, then they need to step up and support it with ways that truly mean something for independent winemakers. This includes going direct to the producer’s cellar door when you can, or buying online through direct-to-consumer business models, so as much profit as possible can be passed on to the winemaker,"
"We are never going to stop using our platform to support and advocate for independent winemakers in Australia, being a disruptor ‘for good’ and showing consumers how they can support independents now, tomorrow and always." concluded Alicia Kennedy.
NAKED WINES AUSTRALIA BUSINESS RESULTS AT A GLANCE:
- Sales at value of $84.2 million[5]
- Sales increased 42% from last year ($59.6 million[6])
- The local Naked Wines Australia business results show:
– It was the least impacted geography by COVID-19 in comparison to the US and UK segments of the global group
– It is showing strong normalised retention trends in sales - Repeat customer contribution profit grew 44% from $12.6 million[7] (FY20) to $17.9 million[8] (FY21)
- Investment in new customers grew 89% from $5.37 million[9] (FY20) to $10.1 million[10] (FY21)
- Naked Wines currently has 61 of the best independent winemakers from across Australia and New Zealand including:
– Emerging and award-winning winemakers who have worked for household labels like Penfolds, Wolf Blass, Vasse Felix, Henschke and Yalumba – all now producing brilliant wines for themselves in part thanks to the unique business model of Naked Wines
– In the last year alone, six (6) new local winemakers have joined the Naked Wines stable including Ben Riggs, Josh Pfeiffer, Hamish Thomson, Paige McArdle, Phil Moraghan, and Andrew and Jamie Pike
These Australian business results, come off the back of Naked Wines’ Global Full Year Results[11] which show:
Globally, strong performance in FY21, with growth across all geographies:
- Total sales +68% to £340.2 million driven by the accelerated channel shift to online wine purchasing due to COVID-19, investment in customer acquisition and favourable customer retention and frequency trends
- Strong growth in all three geographies, particularly the US segment, where sales grew 78% to £161.7 million. US now represents 48% of total sales and is now our largest market
- Investment in New Customers[12] of £50.0 million compared to £23.5 million last year, delivering a 5-year Forecast Payback of 3.0x
- Repeat Customer Contribution profit[13] of £84.9 million (+83%) and an enhanced margin at 30% (+320bps), reflecting the +53% increase in active Angels, scale efficiencies and the geographic mix shift to our higher margin US business
- Adjusted EBIT[14][15] of £(1.5) million and loss before tax of £(10.7) million reflecting the +113% increase in Investment in New Customers in the year
Globally, supported winemakers while continuing to build our platform:
- Unprecedented channel shift to online, transforming the online wine market, and marking an inflection point in Naked’s history
- Grew our base of active Angels by 53% to a total of 886,000, with improved retention rates
- Enhanced our appeal to top winemaking talent:
– Partnered with 235 winemakers (FY20: 211) across 19 countries
– Supported independent producers through this year’s challenges
– Provided financial support for 36 winemakers through our $5 million COVID Relief Fund[16]
– Launched a AUD $5 million "Stop the Squeeze" campaign to support growers and producers in Australia who have been challenged by the Australia / China tariff disputes
- Delivered quality (91% ‘Buy-it-again’ rating) and customer service levels (91% 5* star) through a period of significant growth
For full global results and analysis: www.nakedwinesplc.co.uk/investor-centre/results-centre/
Images for media use here.
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[1] Currency converted from £45.5 million to AUD at conversion rate of $1.85AUD to £1GBP as at 14 July 2021 |
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[2] Compared to last year, FY20 |
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[3] Naked Wines Australia backs its winemakers’ independence, connecting them directly to more than 100,000 Australian customers (known in their business as ‘Angels’) and enabling them a "fair go" to freely produce great wine, at fair prices, and sustain their livelihoods |
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[4] Currency converted from £5.5 million to AUD at conversion rate of $1.85AUD to £1GBP as at 14 July 2021 |
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[5] Currency converted from £45.4 million to AUD at conversion rate of $1.85AUD to £1GBP as at 14 July 2021 |
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[6] Currency converted from £32.2 million to AUD at conversion rate of $1.85AUD to £1GBP as at 14 July 2021 |
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[7]Currency converted from £6.8 million to AUD at conversion rate of $1.85AUD to £1GBP as at 14 July 2021 |
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[8]Currency converted from £9.7 million to AUD at conversion rate of $1.85AUD to £1GBP as at 14 July 2021 |
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[9]Currency converted from £2.9 million to AUD at conversion rate of $1.85AUD to £1GBP as at 14 July 2021 |
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[10]Currency converted from £5.5 million to AUD at conversion rate of $1.85AUD to £1GBP as at 14 July 2021 |
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[11]Naked Wines plc "Naked Wines" or "Group" – full results for the 52 weeks ending 29 March 2021 |
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[12]This is an alternative performance measure. See the ‘Alternative performance measures (APMs)’ from page 39 |
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[13] As above |
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[14] As above |
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[15] Adjusted EBIT is operating profit adjusted for amortisation of acquired intangibles, acquisition costs, impairment of goodwill, restructuring costs and fair value movement through the income statement on financial instruments and revaluation of funding cash balances held |
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[16]Our COVID Relief Fund was an additional $5 million which we put into our wine buying plan in 2020 to buy from winemakers we hadn’t worked with before and whose sales and livelihoods had been disrupted by the COVID-19 pandemic |
About Naked Wines: Naked’s mission is to connect everyday wine drinkers with Australia and New Zealand’s best independent winemakers. They give the best Aussie and Kiwi winemakers the backing they need to make the best wines they’ve ever made, whilst delivering to wine lovers at a fair price.
Today, Naked Wines boasts 61 of the best independent winemakers from across Australia and New Zealand, including emerging and award-winning winemakers who have worked for famous labels like Yalumba, Penfolds, Wolf Blass and Vasse Felix, and now work for themselves. Six new local winemakers have joined the Naked Wines stable in the last 12 months, including the talented and acclaimed Phillip Moraghan (ex Curly Flat), Paige McCardle, Josh Pfeiffer from Whistler (ex Henschke), Glenn Barry (ex Knappstein) and Ben Riggs of Mr Riggs Wine Co. (ex Wirra Wirra).
For years, the big supermarkets and their bottle shops have been giving winemakers and wine drinkers a raw deal. Their buying clout forces local winemakers, who want to reach Australian drinkers, to churn out wine which the big players then stick a fancy label on and mark-up significantly, meaning that by the time consumers buy it, the majority of what’s in the bottle is retailer margin and marketing. Winemakers are driven to the wall and consumers are, at best, short changed. In fact, the only winners are the big bottle shops and supermarkets. Naked Wines cuts out the middle-men and strips away the hidden costs, such as distribution and advertising, that drive up wine label price tags. Through an innovative business model, Naked Wines Australia backs its winemakers’ independence, connecting them directly to more than 130,000 Australian customers (‘Angels’) – and enabling them a fair go to freely produce great wine, at fair prices, and sustain their livelihoods.
As a result, customers end up drinking great-quality wine at better-value prices – whilst also gaining the satisfaction of supporting local winemakers and their communities. Everybody wins; the only market players that come out with less are the big bottle shops and supermarket duopoly.
Always drink responsibly and avoid excessive alcohol consumption. To learn more go to drinkwise.org.au
