Digital Wine Ventures (ASX: DW8) is an Australian company that aims to identify and invest in early stage technology-driven ventures that have the potential to disrupt and digitally transform the USD 423.59 billion global beverage market.
In May 2019, they acquired WINEDEPOT, a cloud-based SaaS platform that uses technology to connect producers, distributors, importers and retailers to dramatically reduce the time, margin and capital wasted in the existing supply chain.
Founded by start-up and wine industry veteran Dean Taylor, the WINEDEPOT platform provides users access to a B2B marketplace, a SaaS operating platform and a fully integrated end-to-end logistics solution.
To accelerate the roll out of the logistics solution the Company has partnered with Australia Post and opened a number of strategically located ‘depots’ around the country, which allows suppliers to offer their customers same and next day delivery.
The depot network is supported by a 25,000 sqm central storage and distribution centre, that DW8 operates in partnership with Wine Storage & Logistics Pty Limited. Together these partnerships greatly reduce DW8’s capital expenditure requirement and execution risk.
Launched just four weeks ago, DW8 announced on 21 October 2019 that it has signed up industry heavyweight Casella Family Brands to use WINEDEPOT’s integrated logistics, trading and order management platform. The agreement with the second largest wine producer in the country goes a long way in validating the need and potential of WINEDEPOT platform.
The Casella Family Brands Agreement
Casella Family Brands is Australia's largest and most successful family owned wine business. They also operate several regional wineries throughout Australia.
WINEDEPOT will manage the fulfillment of Casella Family Brands’ entire product portfolio, under the agreement, through a range of domestic channels. The portfolio includes a number of iconic Australian wine brands such as [yellow tail] Wine, The Magic Box Wine Collection, Peter Lehmann Wines, Morris of Rutherglen, Brand’s Laira Coonawarra, Casella Family Wines and Baileys of Glenrowan.
Casella Family Brands, General Manager of Procurement/Distribution/Strategy, Flaminio Dondina is looking forward to a successful and long-term partnership with WINEDEPOT.
Flaminio Dondina stated:
The WINEDEPOT business
WINEDEPOT is a cloud-based tech-platform designed to unite wine industry stakeholders to reduce the margin, time and capital wasted in the current supply chain.
Catering to producers, distributors, importers and retailers of all sizes, the vertically integrated trading, order management and logistics platform provides an end-to-end supply chain solution capable of servicing a wide variety of sales channels including the rapidly growing direct-to-consumer and online market segments.
WINEDEPOT’s integrated wine trading and smart logistics platform is being launched in Australia before being expanded into other key markets for Australian wine such as China, USA, UK, Canada, Hong Kong, Singapore and New Zealand.
Key benefits of the cloud-based technology platform include:
- Reduced freight costs & shipping times;
- Reduced paperwork & administration;
- Reduced working capital requirement;
- Reduced errors & breakages;
- Increased customer reach;
- Increased customer satisfaction and repeat sales.
The WINEDEPOT Revenue Model
The key drivers of revenue for the WINEDEPOT business are the number of suppliers using the platform, the number of products distributed in the network, the quantity of inventory stored, the volume of orders processed and fulfilled, and the number of sales channels connected to the platform.
The business expects to generate revenue by providing wine producers, distributors, importers and retailers access to an end-to-end supply chain solution with services including:
- Fulfillment fees- receiving, picking, packing, next day delivery;
- Storage and slot fees- for holding and storing products within the network;
- Surcharges- adhoc fees for various optional services;
- SaaS fees- for the usage of WINEDEPOT’s cloud-based ERP application/s.
Once the B2B marketplace is launched, additional revenue is expected from trading fees for processing orders via the B2B marketplace, which would be charged as a percentage of the transaction value and vary between sales channels and the different market segments serviced.
Other Wineries With WINEDEPOT
Besides on-boarding Australia’s largest family owned wine business, Digital Wine Ventures’ WINEDEPOT business has also signed several smaller-scale wineries as customers for its integrated logistics, trading and order management platform. These include wineries from leading Australian wine regions such as the Adelaide Hills, Coonawarra, McLaren Vale such as:
- Brown Hill Wines
- Redman Wines
- Maan Wines
- Gatch Wine
CEO Dean Taylor believes that the signing up of both large and small producer alike goes a long way in validating the need for a disruptive supply chain solution such as WINEDEPOT.
On 22 October 2019, the DW8 stock settled the day’s trade at $0.007, with a market cap of $6.26 million and 893.82 million shares outstanding.
To scale its product offering, engage additional resources and general working capital, DW8 is conducting a private placement at $0.0065 to raise up to $962,000 to sophisticated and professional investors. The offer includes a 1:4 listed December 2022 Option with a strike at $0.015. The company is also allowing existing holders to participate in a 1:10 rights issue. The Lead manager for the Placement is Peak Asset Management.
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