WineLab Case Study

I worked in the conventional wine trade for 13 years prior to WineLab. While I was studying winemaking at University of California, Davis, I came across the idea of wine on tap. I thought it was excellent and wrote a rudimentary business plan that I presented to my then employer. He liked the idea but couldn’t see how to bring it into his existing fine wine merchant model (this is a very traditional sector). I realised this was an opportunity I had to explore, so I left and set up WineLab in 2013.

We have an ecommerce site where we sell wine selections to the B2C market. The B2B market is the bigger part of the business, selling our wine on tap and now cocktails on tap into the hospitality industry. We sell over 60 different wines in kegs, and we’ve developed around 15 cocktails that are sold in kegs too. We sell bottled wine as well, of course. A restaurant might use the keg wine for their wine by the glass or house wines but will also sell wine by the bottle for those who want it. We sell across Ireland and Northern Ireland, to everything from neighbourhood cafes to Michelin-starred restaurants.

The important thing to understand is that we don’t sell wine in kegs because it’s cheaper. The cost-saving simply allows us to put a better-quality product in there. Quality and the environment are the main drivers for us. Wine on tap is a high-quality product that’s fresher, cost-effective, and also more sustainable.

Wine in a keg can be preserved for an incredibly long time. We say 60 days once the keg is tapped, but over the pandemic we had clients that were closed for well over 12 months and found the wine they had left on tap was preserved just as if the keg hadn’t been opened. For the end consumer, kegs mean a guaranteed freshness, exactly as the winemaker intended, and typically a better quality than other wines at the same price. It’s an exciting innovation.

It’s the history and tradition that pulls you into winemaking, but all the science and know-how involved can also be off putting to a lay person. Taking fear out the equation is a good thing for the consumer. When wine comes from a tap it changes people’s expectations. We’ve seen disruption in every single part of the drinks industry. In the alcohol market you have the rise of small batch distilleries and craft breweries. But think about the massive innovation across the industry – barista coffees, flavoured teas, seltzers, plant-based milks, kombucha… Why not wine? In the early days, hospitality clients weren’t sure if their customers were ready for this. But I’d remind them how every other drink in the industry has changed. Today, I’d say we’ve adopted wine on tap more than any other country in the world. It’s a small market, but we have around 500 outlets in Ireland pouring wine. It’s developing internationally too.

Wine in kegs is more environmentally sustainable than in glass. You can fit twice as much wine on a pallet, which means a 50% reduction in the carbon footprint of your drink. The kegs are circular recyclable units, going back to the producer to be refilled. Like any innovative technology, it’s not designed to completely replace what was used before, but in a lot of situations it will make more sense for an establishment to serve on tap rather than open multiple bottles of wine. It minimises the risk that opened bottles don’t get finished before the wine goes off, it reduces the glass waste, and it saves a lot of space.

Glass can be recycled, but it’s a resource-intensive process and without serious legislation in favour of recycling it’s still a lot cheaper to produce virgin glass rather than recycle. Very little wine is being shipped in recycled glass and, in fact, most of the glass we dutifully separate from our waste is still sitting in vast quantities on the other side of the world, waiting for recycling to become economically viable. Kegs might not be the perfect solution, but I think there’s a danger in delaying doing something because it’s not perfect, and 94% less packaging versus a glass bottle is significant.

We lost our business partner about a year ago. She managed the financial side of the business and when she passed away the knowledge of how things operated went with her. We had been running with Sage 50 but had always found it limiting in terms of inventory management. It was slow and unstable; when it crashed it would lose data that we’d then have to repopulate. So, we decided to make the move to Xero for accounting and to Unleashed for inventory management. We gave ourselves three weeks to move over, which was very fast but doable!

The main reason we chose Unleashed was that it managed excise duty well and allowed us to assemble products from stock [read more about how WineLab uses Unleashed for their complex business on our blog]. It integrates with our ecommerce shop – Shopify – and with Xero, so we manage orders from start to finish without manual data entry or duplication. Thinking ahead to some of our longer-term requirements, I can see that Unleashed will be able to meet them when we’re ready.

Unleashed is used across the business. I’m on it every day, but it’s also used by the purchasing manager, our order admins, and the sales operations team. In addition, we just invested in their stock-aware CRM product, called Prospect, which we will start using for our B2B customers. Unleashed’s analytics are strong but there were some gaps that the machine learning in Prospect will help us address. One of the team is currently being trained on that and then we’ll be ready to bring that into our process.

We were a team of about a dozen people this time last year. Our business partner had a full Financial Director role, but for the size of the business that doesn’t make a lot of sense when you’re hiring an employee. We would have also been asking someone to come in and try to pick up the threads of all these long-term relationships she had built. It didn’t feel right. We decided that as well as moving to new software we would outsource the financial management side of things to Beyond.

As an SME, the benefit of a service like this is that you’re getting three different tiers of expertise. When it comes to bookkeeping, we do part of that internally and the other part is handled by a Beyond bookkeeper. When our internal person goes on maternity leave soon, we’ll just have her hours provided by the Beyond bookkeeper instead. Then we have a management accountant who handles all the reporting, and we have Rory as our outsourced CFO.

We’ve been able to expand and contract the service as and when we need it. As a growing SME, this makes perfect sense and it’s a rational way to run our business. It keeps you profitable through growth periods as opposed to taking on people who at first aren’t working at full capacity.

We’ve grown quickly since the pandemic, and I’d say the plan for the next 10 years is probably “less is more”. My vision is to build a business that’s sustainable for all involved – founders, employees, customers, and suppliers. We want it to be somewhere pleasant to work, where employees are well recompensed. We want to be good people to deal with, who pay their bills on time. We want business operations that create minimum impact on the environment. I suppose what I’m describing is a strong culture of belonging and of common purpose. Where we work hard but enjoy it and have real work-life balance.

With our subsidiary in Northern Ireland and the possibility of international markets for our cocktail range, we’re well on the way to where we want to be in terms of revenue and headcount. We have a really good product we believe in and we’re doing what we love. That’s a fantastic achievement in itself.