Wine-Searcher Actively Entertaining Investor Offers Is No Surprise

Online Wine Search is a critical and growing sector that pays dividends to both online retailers and consumers.

We write a lot in this space about the evolution of the alcohol industry. Most often the subject matter is consolidation or the marketplace or consumers or regulation or the media. What is discussed less, and certainly discussed with less urgency when it is discussed, is the consolidation or evolution of the various service providers orbiting the alcohol beverage industry.

It is with this in mind that I wanted to report that Wine-Searcher appears to be actively courting and answering potential partners and investors in a pivot toward significant growth. Many in the industry may have already heard this information. However, I think it is significant for a number of reasons.

First, Wine-Searcher is the largest wine price comparison and search engine in the world and operates on a global scale. At last count, Wine-Searcher shows over 13 million updated offers on wine daily and sees more than 240 million searches performed annually on its platform, which was founded in 1998 by Martin Brown.

Recently, Wine-Searcher got some competition with the founding of Pix, a product of wine technologist and entrepreneur Paul Mabray and crew. The point here is that even with the domination of Wine-Searcher, there were some smart people who believed there was even more room for growth in the area of wine search platforms.

The apparent move by Wine-Searcher to entertain offers of investment and partnership suggests that Mr. Brown and the rest of the Wine-Searcher management also think growth in this little talked about area of service in the wine industry is also set for more growth.

The other interesting thing about Wine-Searcher is that while it had, for years, been in the business of generating millions in revenue from subscriptions, today its revenue sources have been broadened to include providing data insights and analytics on global or regional wine availability, pricing, and user demand. With 240 million+ searches annually one can see how Wine-Searcher data could provide significant insights to private clients.

The Pix revenue model is somewhat different from Wine-Searcher, based as it is on keyword purchasing a la Google. At a recent private meeting of independent fine wine retailers where both Pix and Wine-Searcher executive management sat on a panel discussing the impact and meaning of online searches for both wine retailers and consumers, the representatives of both companies agreed that while they are clearly competitors in the space, they also approach the wine search realm differently and provide somewhat different benefits.

Whoever Wine-Searcher eventually decides to partner up with will most certainly agree that wine-specific searching and search technology is likely to be a critical element of current and future growth of online sales and marketing, particularly as more and more vendors/retailers take to the Internet to market and sell wine.

The knock against online wine search engines like Wine-Searcher has been that they motivate race-to-the-bottom pricing by retailers looking to attract attention to their online offerings with loss leaders. On the other hand, I know retailers who will spend tens of thousands of dollars with Wine-Searcher annually in order to generate many millions of dollars in sales from those using the platform to find the wines they want. My guess is that the same will eventually be said by retailers who work with Pix. The point here is that there are few if any retail categories like wine in which the consumer is confronted with perhaps hundreds of thousands of items for sale—somewhere in the world.

When information got out and came my way that Wine-Searcher was entertaining investment offers after all these years as a family-owned company, I started to count on my fingers the number of just alcohol-related companies that would have an interest in investing in wine search technology. I ran out of fingers and had to use my toes, then had to use the toes of my son, Henry.

It will be interesting to see how online wine search evolves in the wake of new investment in Wine-Searcher as well as with competition from Pix. One thing is certain, there is no rational e-commerce without robust searching options.