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Winc Inc. Q3 Earnings Could Ignite A Rally; Here’s Why Bulls Are Trading Ahead Of Release (nyse-amer:WBEV)

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Dec 08, 2021 (AB Digital via COMTEX) -- Winc Inc. (nyse-amer:WBEV) snapped higher by about 3% ahead of its earnings call on Wednesday. It will be the first time WBEV reports earnings as a publicly-traded company after completing its $22 million IPO last month. It's also the first time investors get a glimpse behind the scenes at a public WBEV, with a growing base anxious to get the first word on where 2022 will take them. If pre-IPO trends are any indication, they may be in for an intensely bullish ride.

Keep in mind that WBEV is already a respected player in the DTC wine industry. At the same time, they aren't anything like the DTC companies they are compared to. WBEV is different. In fact, they are changing the DTC landscape, approaching the business with a heavily personalized business model that generated more than $55 million in DTC revenues last year. That personalization also helped its subscriber base surge, serving over 125,000 active monthly users contributing to a recurring and growing revenue stream. The better news- those users stay engaged with WBEV, which is the driving force behind the company's impressive growth.

To date, the interactive component of the DTC platform has enticed users to post more than five million Winc wine reviews. Winc embraces each one. In fact, those comments and reviews act as the primary source of data that fuels Winc's innovative and personal approach to wine sales. The more excellent news is that the model's working.

Its subscription-based service has sold more than 400,000 bottles of wine in the United States market this year alone. Over the past decade, more than 18 million bottles have been sold. And while it's a testament to how Winc can leverage its DTC business model to create an impressive recurring revenue stream, it's only one part of its mission to drive value through an omnichannel business model.

Omnichannel is a big word that means revenues come from multiple places. Winc investors, though, only need to know the strategy can be a revenue-generating game changer.



Video Link: https://www.youtube.com/embed/orp34xBH19g

Expanding Its Market Presence

That's because it takes the company well beyond its DTC roots, giving its wines a presence in several of the largest consumer markets by integrating its brands into wholesaler networks like WholeFoods Market Inc. and Walmart Inc. /zigman2/quotes/207374728/composite WMT -1.02% .

That's not all. Its omnichannel model also makes its products available in thousands of restaurants across the country. Put simply, WBEV brings its message and products to multiple markets. The intention is to create awareness and build a brand following. Once they do, history shows Winc can convert a taster into a subscriber.

For investors, that's good to know. And to make sure its wines can get into the hands of consumers, it's also good to know that Winc has secured significant relationships with several of the largest distributors in the country. Notably, Winc has been strengthening its market position and margins by leveraging the power from the same Tier-one distributors and retailers used by Constellation, Diageo, and Gallo. But, Winc does so with an edge through a digital presence that embraces customer feedback.

That results in Winc developing only the products that connect with a generation of consumers in a way that even the industry giants can't or are unwilling to do. The excellent news there- they sell products. And that earns more attention from distributors who can make much more money selling Winc products than warehousing them. And that's not all.

Beyond Winc's ability to impress distributors with excellent products that sell, Winc's omnichannel approach to sales diversifies risk and expands revenue streams. Strangely enough, they are one of the few, if only, DTC wine companies leveraging such a model. Investors aren't complaining. After all, it keeps the competitive landscape thin and the growth trajectory steep.

Growth Is No Coincidence

That growth is happening. And it's not by coincidence; it's the result of a process. Here's how it works. Winc aggregates data from its DTC network and combines that with trend research to create a brand that will appeal to consumers. From there, it produces in-house the product and places it on its DTC platform. After that, they aggregate and extract data from reviews and monitor sales. Finally, its product winners are introduced through press releases and partnerships with retailers like Target Corp. /zigman2/quotes/207799045/composite TGT -1.38% , while poor performers are either tweaked or canceled from production.

On paper, it sounds simple. However, being simplistic in the process doesn't mean it's easy to do. It's grinding work. But, Winc believes it's worth the effort, and the results of its data collection can have a compelling impact on a brand's future.

Here's an excellent example. After following its processes, Winc's Summer Water brand garnered a gross profit return 32X greater than its average development cost. That's an excellent return. And it's not an exception. Winc notes that each brand typically generates a gross profit 4.6X greater than its development cost.

Here's the best part. It only takes approximately 2 months to get from bottle to consumer, with operating costs significantly lower than industry standards. Competitors can't do that. In fact, most don't even try. Instead, they sell consumers what they want when they want. The difference in business models doesn't stop there.

Being Different Is Good

/zigman2/quotes/207374728/composite
US : U.S.: NYSE
$ 135.75
-1.40 -1.02%
Volume: 8.73M
Jan. 26, 2022 4:00p
P/E Ratio
47.53
Dividend Yield
1.62%
Market Cap
$380.44 billion
Rev. per Employee
$248,679
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/zigman2/quotes/207799045/composite
US : U.S.: NYSE
$ 211.71
-2.97 -1.38%
Volume: 4.21M
Jan. 26, 2022 4:03p
P/E Ratio
15.58
Dividend Yield
1.70%
Market Cap
$102.86 billion
Rev. per Employee
$252,685
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