D2C for wine-lovers: reflections on WineDirect growth model.

I took some time to reflect on WineDirect's growth model and to think about D2C space and the future of smaller wine producers more broadly. Couple ideas came to my mind:

1) Volumes kill authenticity and adversely impact quality of wine. 3 tier system as well as business operations strategy of Gallo, Constellation Brands and alike dilute brand identity of premium wineries and encourages them to be laser focused on profits  and make critical decisions such as how long to age wine in barrels, how much residing sugar to keep and how often to change oak barrels based on cost / benefits analysis and consumption preferences of very broad and often uneducated audience and not on wine complexity and grape identity.

2) D2C has decent potential to give a serious advantage to smaller (and potentially higher quality) producers over big players.  I am a big believer that a strong B2C offering paired with in-house / outsourced logistics capacity, marketing platform and customer support can boost revenues and margins for domestic SMBs as well as for international boutique vineyards and wineries which currently lack resources to enter US market.

I think that wine market is ripe for processes and technology disruption and those producers and service providers that will figure out how to ride this over $3b emerging market in a sustainable fashion will become category creators with solid first mover advantage.