Angels Sorting Good From Bad Get Rewarded With Discount Wines

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Photographer: Elin McCoy/Bloomberg

Rowan Gormley, center, founder of U.K. online retailer Naked Wines, with winemaker Gerhard Lobner and sales manager Paul Kiefer at the Mayer am Pfarrplatz restaurant in Vienna, Austria.

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Photographer: Elin McCoy/Bloomberg

Rowan Gormley, center, founder of U.K. online retailer Naked Wines, with winemaker Gerhard Lobner and sales manager Paul Kiefer at the Mayer am Pfarrplatz restaurant in Vienna, Austria. Close

Rowan Gormley, center, founder of U.K. online retailer Naked Wines, with winemaker Gerhard Lobner and sales manager... Read More

Source: Bravado Wines via Bloomberg

Chilean winemaking couple Constanza Schwaderer and Felipe Garcia. The pair won the Naked Angels Winemakers of the Year award in 2010. Funding from Naked Wines helps finance their winery, Bravado Wines, founded in 2006. Close

Chilean winemaking couple Constanza Schwaderer and Felipe Garcia. The pair won the Naked Angels Winemakers of the... Read More

Source: Cavas del 23 via Bloomberg

Ripe syrah grapes at Bodega Cavas del 23 winery's vineyards; its 2007 Beviam Syrah was a hit with Naked Wines' Angels. Close

Ripe syrah grapes at Bodega Cavas del 23 winery's vineyards; its 2007 Beviam Syrah was a hit with Naked Wines' Angels.

Source: Cavas del 23 via Bloomberg

The sign for winery Bodega Cavas del 23 in Guaymallen, Mendoza, Argentina. Owned by Alfredo Meyer and Alejandro Jausoro, the winery makes a syrah under its Beviam label that wowed Naked Wines' customers. Close

The sign for winery Bodega Cavas del 23 in Guaymallen, Mendoza, Argentina. Owned by Alfredo Meyer and Alejandro... Read More

Source: O'Vineyards via Bloomberg

Joe, Ryan, and Liz O'Connell at their winery Domaine O' Vineyards in Cabardes, France. The O'Connells, from Florida, purchased the vineyard in 2004, and their cabernet-merlot blend Trah Lah Lah has won fans among Naked Wines' Angels. Close

Joe, Ryan, and Liz O'Connell at their winery Domaine O' Vineyards in Cabardes, France. The O'Connells, from Florida,... Read More

Small bands of “Archangels” fan out at London’s recent wine fair, intent on separating the good from the bad. Instead of halos and wings, these 50 seraphim are armed with lists and iPhones.

Their mission is to sip and savor offerings from new independent vintners for U.K. online retailer Naked Wines.

After tasting Decanter magazine’s medal-winning sparkling wines, Archangel Peter Batty, a filmmaker and musician, dismissed the selections as “a lot of crap.”

But at a table of Argentine labels, the Beviam reds from Mendoza’s Bodega Cavas del 23 wowed him. Two days later its 2007 Beviam Syrah was offered on the Naked Wines website, and within 48 hours the 600 bottles were sold out.

“It was amazing, so easy,” said winery co-owner Alfredo Meyer, a finance director for Vienna-based steel company Bohler- Uddeholm AG.

Started in 2008 by Rowan Gormley, the 48-year-old founder and former chief executive officer of the Virgin Wines club, Naked Wines is a new kind of marketplace.

In wine terms, the company is a complex, fresh blend: part savvy online retailer, part wine club and social media clique, and part community-supported agriculture -- farms whose customers pay directly in advance for the produce.

This last part of Gormley’s business model, in which Naked’s customers help provide financing to small winemakers lacking capital, and get preferential prices in return, may be a wave of the future.

I first met Gormley last autumn at Vienna’s Schloss Schoenbrunn during the European Wine Bloggers’ Conference, where he demonstrated how his model works by having 200 bloggers choose an Austrian white for the site in a blind tasting.

Rumpled Shirt

I can attest that he wears clothes -- jeans and rumpled plaid shirt -- in public. The “naked” in the name of his company and blog (Naked Rowan) he says refers to transparent pricing. After adding taxes and shipping costs, Naked takes a 10 percent fee for each bottle.

The business claims to have 175,000 customers, 52,463 of whom -- the Naked Angels -- prepay 20 pounds a month to get a 33 percent discount on purchases and attend tastings. They post hundreds of wine reviews, both positive and negative. Bottle silhouettes next to listed wines indicate the percentage of people who would buy the wine again.

The 200 Archangels are the most active, and have followers. Craig MacKay, managing director of an insurance company, was drawn by the cash back discount, but what holds him is that “my money is going to the vineyards.”

Domaine O’Vineyards

While many wines are from established estates without a U.K. importer, the monthly fees, which add up to over 1 million pounds ($1.6 million) a month, help talented winemakers start up or expand. Domaine O’Vineyards in France’s Languedoc, purchased a half dozen years ago by the American O’Connell family, is one beneficiary.

“You need a huge amount of cash for bottles, corks, barrels,” said Ryan O’Connell. Part of their 2011 production is already paid for. One third of the wines will go to Naked, which means O’Vineyards saves on shipping, packaging and marketing.

At the fair, Gormley launched an even more far-reaching concept, a website marketplace he calls “a farmer’s market for wine.”

Naked Wines invited sellers picked by the Archangels, like Cavas del 23, to pitch a six-bottle case of wine at a specific price directly to potential buyers on the website. The Angels and others customers can accept the rate if they think it’s worth it, or pitch a lower one.

If the winemaker is happy with the final price, the deal goes through. The key for the seller is guaranteed volume.

Pricing Power

“If 1,000 people agree to buy a case each, a vintner might be willing to let them have a 30 pound wine for 20 pounds,” says Gormley. “If buyers only want to pay 16, he can lower his price, or not. This transfers power to the customers and winemakers.”

Judging by comments on the website, Angels have some complaints about the flexibility of the system, still in beta mode.

Naked offers more than 200 wines from a dozen countries, some made by well-known and award-winning winemakers. O’Connell likes the instant reviewer feedback. “The wines the Naked Angels like are fruitier, easier to appreciate,” he says.

Of those I’ve tasted, most are fair to quite good. The 2010 Rotes Haus Gemischter Satz (13.49 pounds), a traditional Viennese white blend from 13 grape varieties, is fresh, crisp, and more interesting than pinot grigio.

The 2008 Domaine O’Vineyards Trah Lah Lah (12.99 pounds) is a fruity merlot-cabernet blend; and their Proprietor’s Reserve (16 pounds) is rich and spicy.

Angels Save

These aren’t rock-bottom bargains. The deliciously juicy, gulpable 2010 Raats Original Chenin Blanc listed at 9.99 pounds, for example, costs 8.99 elsewhere in the U.K. The real savings are to Angels, who pay only 6.66 with their discount.

Gormley plans to launch a Naked Wines USA, but the U.S. has dozens of legal hurdles, thanks to the legacy of Prohibition and the power of the wholesalers and distributors lobby.

The other day a friend was upset that a wonderful bottle of rose he’d tasted in Provence was nowhere to be found in the U.S.

Maybe he could join the celestial choir.

(Elin McCoy writes on wine and spirits for Muse, the arts and lifestyle section of Bloomberg News. The opinions expressed are her own.)

To contact the writer of the story: Elin McCoy at elinmccoy@gmail.com.

To contact the editor responsible for this story: Manuela Hoelterhoff in New York at mhoelterhoff@bloomberg.net.

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