Pour one out for Winc.
The wine subscription company behind Summer Water and Wonderful Wine Co started trading on the New York Stock Exchange on Thursday and received a tepid welcome from investors. The stock debuted at $13 per share and climbed to a high of $14.20 before closing at $12.27, down by about 5%.
Winc tailors wine recommendations to shoppers' palates. It essentially operates a wine-brand factory, popping out as many as 10 new brands per year informed by data gathered on customers and their ordering habits.
Winc originally sought to sell five million shares in October, priced between $14 and $16, to raise about $80 million. But the Santa Monica-based company quietly postponed its debut. It ultimately sold 1.7 million shares this week, raising $22.1 million.
Winc's direct sales surged during the pandemic, as lockdowns drove oenophiles to hunt for bottles on the internet. But Winc has cautioned that another global crisis, climate change, poses a threat to its bottom line.
Extreme weather fueled by climate change "could negatively impact the quality and quantity of grapes available to us and our producers for wine production," the company said in a regulatory filing.
Now trading under the symbol WBEV, Winc said in a statement that it's "excited for the next phase of our journey, which involves pushing industry boundaries, continuing to make great wine, and ensuring you always have great glass in hand." The company did not respond to a request for further comment on its downsized IPO.
.@WINC (NYSE: $WBEV) opens on the New York Stock Exchange at $13 pic.twitter.com/6yrOU5cT0U
— NYSE 🏛 (@NYSE) November 11, 2021
This story was updated after trading closed on Thursday and was corrected to reflect that Summer Water is a Winc brand, while Yes Way Rosé is not.
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Santa Monica-based wineseller Winc has postponed its expected debut on the New York Stock Exchange.
The IPO was anticipated for this week, valuing the company at around $263 million. Instead, it has been pushed to a later, unknown date, a NYSE spokesperson confirmed in a call with dot.LA. As of Friday afternoon, Winc's expected stock symbol — "WBEV" — was still reserved in the exchange's system, the spokesperson said. Winc did not respond to a request for comment.
Winc offers a wine subscription service tailored to shoppers' palettes. Through collaborations with vineyards and other brands, the company said it aims to churn out as many as 10 new wine brands a year, according to an SEC filing released last week.
Winc aimed to sell five million shares at a price between $14 and $16 that would have netted about $80 million. It also offered its underwriters additional shares worth about $12 million.
As the pandemic shuttered storefronts, Winc saw the upside of an online sales boom. Between subscriptions and deals with wholesalers, the firm says it sold more than 430,000 cases of wine in 2020, up 80% from the prior year.
But while that global catastrophe seems to have helped Winc, another crisis poses a threat to both the firm and the wider wine business.
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The 10-year-old company expects to price its IPO between $14 and $16 per share and has applied to list on the New York Stock Exchange under the symbol "WBEV."
Like other alcohol purveyors, Winc has seen a "significant increase" in direct online sales since March 2020, according to an SEC filing published last week. As the pandemic shuttered bars and restaurants, more people splurged on bottles of wine and spirits to drink at home. Excessive drinking spiked during lockdowns, too.
Winc's executives say the online frenzy reflects a "permanent shift in consumer behavior," away from buying bottles at brick-and-mortar stores.
Winc produces its own wines in collaboration with vineyards and other wine brands, such as Yes Way Rosé. And in a sense, Winc can be thought of as a wine-brand factory. It aims to pop out as many as ten new brands per year based on the data it gathers on customers and their ordering habits. To that point, Winc says its mission is to "become the leading brand builder within the alcoholic beverages industry."
The majority of Winc's revenue today comes from its subscribers, who pay monthly for bottles tailored to their palates, but the company also sells its brands through wholesalers. In all, Winc says it sold more than 430,000 cases of wine in 2020, up 80% from the prior year.
While the pandemic has been a boon for Winc's sales, another global emergency poses a threat to its bottom line.
Climate Change and Wildfires
Winc warned in its filing that destructive events linked to climate change, such as wildfires and extreme weather, "could negatively impact the quality and quantity of grapes available to us and our producers for wine production."
"We are already beginning to see the effects of climate change on wine in many regions of the world," Columbia University climate scientist Dr. Benjamin Cook told dot.LA. For example, droughts and wildfires in the West are "linked in part to climate change, and these events are having impacts on grape growers and harvests in California and elsewhere in the region," said Cook in a comment on the wider industry.
But Winc sells a ton of California wine. All five of the company's "core brands" — which each bring in between "$1 million and $10 million in annualized revenues" — feature California grapes, though not always exclusively. Winc's "Wonderful Wine Company," for example, sources grapes from California as well as Spain, Argentina, and Chile. For its part, Winc says it is "not reliant on any one vineyard or geographic" because it outsources production.
As the impacts of climate change nevertheless grow clearer, climate-related disclosures such as Winc's have also "grown dramatically" in the U.S., the Securities and Exchange Commission said earlier this year.
And wine is one among countless industries affected by the climate crisis.
Google, for example, has cautioned that hotter temperatures could drive up the cost of cooling its data centers, while drugmaker Eli Lilly has said the warming Earth may boost demand for some of its medicines.
While noting the threat of climate change, Winc also laid out in some detail how it limits its carbon footprint. The company said in the filing that it uses "flexi-tanks" to pack more wine into shipping containers and it plans to embrace corks that are "100% plant based, 100% sustainable and made from discarded materials."
Winc also says it strives to produce 75% of its wines "from sustainably farmed grapes by the end of 2021." The wineseller advertises many of its bottles under a sustainability banner, but it offers little information on how it determines whether a bottle of wine was produced sustainably.
Winc did not respond to requests for comment on its coming IPO.
Editor's note: Winc has reportedly postponed its IPO. The firm did not immediately respond to a request for comment.
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