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Dive Brief:<\/h3>\n\n- Adding several wine brands to its portfolio, Amass Brands \u2014\u00a0which sells spirits and non-alcoholic beverages \u2014 announced it has acquired operating assets from direct-to-consumer wine company Winc, according to a Thursday press release.<\/li>\n
- The acquisition of Winc\u2019s assets includes several brands, such as Summer Water,\u00a0that it sells through a subscription delivery service. The deal will enable the companies to combine Winc\u2019s DTC e-commerce platform with Amass\u2019 \u201crapidly growing portfolio of wine and spirits sold through traditional retail partners,\u201d\u00a0per the release.<\/li>\n
- A little over one year after going public, Winc in December filed for Chapter 11 bankruptcy\u00a0protection.<\/li>\n<\/ul>\n
Dive Insight:<\/h3>\n
The deal with Amass comes less than two months after Winc filed for bankruptcy.<\/p>\n
The company, known for its wine delivery subscription service, filed with $3.4 million due in principal debt. Project Crush Acquisition Corp., whose CEO Mark Lynn also serves as CEO for Amass and co-founder of Winc, emerged as a stalking horse bidder with a proposed purchase price of about $10 million.<\/p>\n
Winc had wholesale retail partners such as Target, Whole Foods and Albertsons. However, its revenue from DTC sales declined and led to liquidity constraints, according to court documents.<\/p>\n
Winc\u2019s second-quarter earnings from November showed that although wholesale revenue increased 32% year over year, DTC sales were down 11.8%. Net loss increased from $3.9 million to $4 million, while operating expenses increased 13.6%.<\/p>\n
The wine company\u2019s decline in DTC sales demonstrates the larger trend impacting the industry. The DTC wine shipping industry experienced its first-ever decline in volume (-10.3%) and value (-1.6%), according to the annual direct-to-consumer wine shipping 2022 report from Sovos ShipCompliant and Wines Vines Analytics. The report noted that wine consumers, especially those buying at under $50 per bottle, pulled back on DTC puchasing.<\/p>\n
\u201cNo winery, regardless of region or size, appears to have avoided the effects of a retreat from consumer wine spending in the shipping channel,\u201d the report added.<\/p>\n
For Amass, the deal represents an opportunity to grow its customer base. “The acquisition of Winc\u2019s amazing portfolio of wine is another step for Amass towards creating a next-generation beverage company,” Lynn said in a statement.<\/p>\n
Amass isn\u2019t the only company to have invested in DTC alcohol delivery. In February 2021, Uber purchased delivery company Drizly for $1.1 billion in stock and cash.<\/p>\n
Dive Insight:<\/h3>\n
The deal with Amass comes less than two months after Winc filed for bankruptcy.<\/p>\n
The company, known for its wine delivery subscription service, filed with $3.4 million due in principal debt. Project Crush Acquisition Corp., whose CEO Mark Lynn also serves as CEO for Amass and co-founder of Winc, emerged as a stalking horse bidder with a proposed purchase price of about $10 million.<\/p>\n
Winc had wholesale retail partners such as Target, Whole Foods and Albertsons. However, its revenue from DTC sales declined and led to liquidity constraints, according to court documents.<\/p>\n
Winc\u2019s second-quarter earnings from November showed that although wholesale revenue increased 32% year over year, DTC sales were down 11.8%. Net loss increased from $3.9 million to $4 million, while operating expenses increased 13.6%.<\/p>\n
The wine company\u2019s decline in DTC sales demonstrates the larger trend impacting the industry. The DTC wine shipping industry experienced its first-ever decline in volume (-10.3%) and value (-1.6%), according to the annual direct-to-consumer wine shipping 2022 report from Sovos ShipCompliant and Wines Vines Analytics. The report noted that wine consumers, especially those buying at under $50 per bottle, pulled back on DTC puchasing.<\/p>\n
\u201cNo winery, regardless of region or size, appears to have avoided the effects of a retreat from consumer wine spending in the shipping channel,\u201d the report added.<\/p>\n
For Amass, the deal represents an opportunity to grow its customer base. “The acquisition of Winc\u2019s amazing portfolio of wine is another step for Amass towards creating a next-generation beverage company,” Lynn said in a statement.<\/p>\n
Amass isn\u2019t the only company to have invested in DTC alcohol delivery. In February 2021, Uber purchased delivery company Drizly for $1.1 billion in stock and cash.<\/p>\n