‘Now is the right time to invest in growth,’ says Virgin Wines CEO

Following the release of Virgin Wines’ 2025 results, CEO Jay Wright tells James Bayley about the company’s plans to drive growth. The business is focusing on commercial partnerships, Warehouse Wines and customer acquisition as it targets £100 million in revenue despite challenging market conditions.

Despite a shrinking online drinks market and rising duties, Virgin Wines has maintained revenue at £59 million in FY25, while strengthening its balance sheet and increasing investment in growth.

The group has reported revenue of £59 million for the year ended 28 June 2025, unchanged from the previous year, as per the company’s audited results. This performance comes against the backdrop of a contracting online drinks market and inflationary pressures.

Adjusted EBITDA came in at £2.3 million and profit before tax at £1.6 million, with both figures exceeding market expectations. Gross product margins softened from 37.6% to 35.6% year-on-year, reflecting rising duty, glass and packaging costs and the introduction of Extended Producer Responsibility (EPR) tax.

Chief executive Jay Wright (pictured) told the drinks business that maintaining stability in such an environment reflects the strength of the business model. “We’ve had a good year in a declining market,” he said. “We’ve kept our revenue steady year-on-year, and we continue to be cash-generative, which builds a really healthy balance sheet. We are investing in a growth strategy that we announced last March. So we’re focused on driving the core business through increased investment and customer acquisition.”

Virgin Wines remains debt-free with gross cash of £17.6 million and net cash of £9.3 million, having repurchased £2 million of shares and prepaid £1.6 million of duty. Wright added, “The balance sheet over that period was debt-free, we’ve got £17 million in growth cash on the balance sheet and we just thought now was the right time to invest that cash in growth.”

Commercial partnerships deliver momentum

The commercial channel remains a standout performer, growing 24% year-on-year to just under £9 million, according to Wright. Key partnerships with Moonpig, Ocado and major rail operators have fuelled this rise.

Wright said. “We have very positive relationships with the likes of Moonpig and we are looking to expand that relationship both in terms of the wine range and other product categories such as beer and spirits.”

The partnership with Ocado, launched within the past year, now features around 55 SKUs on the retailer’s website. Virgin Wines has also strengthened its presence in the travel sector, supplying wine to LNER, Avanti and Great Western Railway, while expanding into WH Smith travel locations.

According to the company, commercial revenue growth is expected to continue in FY26 as these partnerships deepen.

Warehouse Wines expands Virgin Wines’ demographic reach

Warehouse Wines, Virgin Wines’ value proposition launched 18 months ago, has completed its first full year of trading with £1.8 million in revenue and approximately 21,000 customers.

Wright said, “The Warehouse Wines value proposition is a new initiative we launched about 18 months ago, so we’ve literally just come to our first full year of trading there, and we believe that by investing in growth in that area, we can attract a different sort of demographic and type of customer to the core Virgin Wine space. So really, it’s utilising the very cash-generative sides of our business to drive incremental revenue in what we know has been a very subdued consumer landscape.”

With inflation and duty increases reshaping the UK wine market, Wright believes the offering taps into a neglected segment. “What this has done is move wine into an area where we think we can attract a supermarket buyer into a B2C proposition,” he said. “It’s about trying to bring in the supermarket buyer who spends £7.99 in a B2C environment. It doesn’t have any subscription schemes either, so unlike all other B2C businesses, it’s literally just there for people to come whenever they want to buy whatever they want.”

Warehouse Wines’ revenue rose 484% year-on-year, according to the company.

Disciplined investment drives customer acquisition

Virgin Wines’ customer acquisition increased by 28% in FY25 while marketing spend rose by just 6%. The cost per acquisition fell slightly to £16.40, while conversion rates remained well above 40%.

Wright attributed this to partnerships and improved digital infrastructure. “We are very disciplined in terms of the way we go about customer acquisition and have a range of different routes to bring these customers in,” he told db. “Our partnership model is vital to that because that is our most cost-effective route to bring in high-quality recruits.”

He added that improving the customer journey was key. “We have revamped different areas of our website over the last 12 months, one of those areas being the recruitment journey for new customers to come in and we’ve had a significant increase in conversion rates from those new customers coming in.”

Virgin Wines’ WineBank membership rose to over 128,000, with cancellation rates improving to 14.7%, reflecting strong customer loyalty.

Buying model offsets duty pressure

The sector has faced some of the sharpest tax increases in recent history. Duty on a 14.5% ABV bottle of wine rose to £3.21 in February 2025, up from £2.67, as per HMRC data, with an additional 10p per bottle from the new EPR tax.

Virgin Wines’ open-source buying model has been critical in absorbing these costs. “We’re working with winemakers all around the world, and we go and make our wine with those winemakers ourselves,” Wright said. “This allows us to search out where we get the best value from, every vintage, and produce more wines in areas where we get better value and produce fewer wines in areas where we get less value.”

The company maintains just 12 to 14 weeks of inventory, allowing rapid adaptation to shifting price and tax structures.

Technology and AI to unlock new growth

Virgin Wines is placing technology at the heart of its future strategy. The company is developing a mobile app, set to launch in early 2026, to enhance engagement, drive sales and reduce reliance on email marketing.

“We have been developing a state-of-the-art mobile app, which will launch in the early part of 2026, that is fundamental in terms of how we are planning to use technology to grow the business,” Wright told db. “We believe this will drive increased customer engagement, attract a different audience with the app, find new ways to acquire customers, have a new proposition to give to customers and also to mitigate a little bit of our reliance on email marketing through push notifications.”

An AI recommendations engine has already been introduced to analyse wines by taste profile and suggest stylistically similar bottles to customers, aiming to deepen loyalty and increase order frequency.

Building towards £100m

Virgin Wines has set its sights on £100 million in annual revenue with a 7% EBITDA margin. Trading in Q1 2026 remains in line with expectations, with customer acquisition up 29% and Warehouse Wines revenue up 134%.

Wright told db, “We went through a huge amount of growth during the Covid period, we’ve retained a lot of that. We are higher in terms of revenue now than we were going into Covid, so there has been good growth over the last few years in a fairly subdued market consumer landscape over the last three years.”

The company believes its diversified model, disciplined acquisition strategy and investment in technology position it strongly for long-term growth.

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