Innovation or Legality for Wine Clubs?

A friend who works in tech asked me at school pickup the other day what was driving the changes in the wine club space and therefore, the direct to consumer wine sales space. Basically he was wondering, what innovation was at play that was helping wine clubs to gain more market share.

To start, yes there has been some innovation in regard to direct to consumer wine sales. Of course, there is better, cheaper software these days that make things possible that were not before. When I opened my own wine club, it was a monumental challenge to find any software that would accept both prepaid gifts, as well as, ongoing monthly subscriptions. After a decade, I built the functionality on my Chromebook, in an afternoon sitting on my couch using WordPress and Woocommerce. So yes, technology has helped. But it’s not driving the change because there have been industry specific software programs for about 20 years that got this stuff done and done well enough for wineries to focus on other things.

Sadly, the main driver in the changes inside the wine club space are a series of court cases which effect what type of wineries and wine clubs can ship to which states. Some states have taken advantage of the situation. A few years back, Texas was negotiating with to open a warehouse in the state and bring in what they thought were a few hundred jobs. Part of the negotiation, was sending cease and desist orders to all 3rd party wine clubs, retailers and wineries without proper permitting that were shipping into the state. Similar cases have come up in many states, mostly Republican leaning which is the topic for another post, allowing wineries to ship with a permit into the state, but disallowing wine clubs which are not permitted as wineries, but instead as distributors or retailers.

So what’s driving innovation within the wine club space? Is it technology? No, not really although technology has made the barrier to entry a lot smaller. Instead, the need to stay ahead of a series of court decisions is driving business decisions. What that means for the wine in your glass is still an open question.