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Sunday 23 November 2014

Facebook enters the wine business

19th February, 2013 by Lucy Shaw

Facebook has started selling wine via a new online store on the site that encourages its US customers to send gifts to their Facebook friends.

Facebook founder Mark Zuckerberg

Facebook founder Mark Zuckerberg

Keen to take advantage of the opportunity to trade on the world’s biggest social networking site, according to The Huffington Post, several US producers have put their wines up for sale via the Facebook gift store.

“It’s working really well and we’re excited to see where it could go,” Dwight Harrington, operations director at Blackbird Vineyards in the Napa Valley told the HP.

Whether Facebook’s attempt to make money from its one billion users will prove profitable for both the site itself and the wineries involved remains to be seen.

Facebook’s stock has had a tough time since the company went public in May as users are increasingly accessing the site from their smartphones, where there are fewer opportunities for revenue.

In a bid to tackle the problem, the new gifts section is available on the Facebook app for both the iPhone and Android.

Among the wines available to buy on Facebook are Robert Mondavi, Clos du Bois and Wild Horse, and all of which are owned by drinks giant Constellation.

Robert Mondavi wines are available to buy on Facebook

Robert Mondavi wines are available to buy on Facebook

One of the smaller producers on sale is Titus Vineyards in St Helena, which produces fewer than 10,000 cases a year.

“Social media is a hot issue in the wine industry right now, as we’re all trying to connect with the elusive Millenials, so what better way than to work with Facebook? It’s a huge exposure opportunity,” Titus’ sales and marketing director Christophe Smith told the HP.

Prices for the wines on Facebook range from $15 to $100, excluding shipping.

Once an order is placed, the recipient is sent an email message. If they accept the gift and share their postal address with Facebook, the wine arrives at their door several days later.

However, complicated shipping rules in the US mean that wineries can only ship to the states where they are licensed, which can be as few as 16 or more than 30.

According to The Huffington Post, so far the wineries enrolled have yet to see a huge amount of interest in their wines on Facebook.

Blackbird Vineyards in Napa has been selling three to four orders a day, with each order ranging from one to three bottles,

“Companies that are selling gifts higher than the $5-$10 price point are seeing slower sales than they expected,” admitted the winery’s marketing manager Victoria Amato.

Blackbird originally planned to sell its wines on Amazon.com but pulled out because the site would have discounted its wines.

In contrast, Facebook sells wines at their recommended retail price.

With each wine sold, Facebook, the winery and ShipCompliant all get a percentage of the sale, but the share each receives will not be publicly disclosed.

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