Amass Brands acquires operating assets of wine company Winc

Dive Brief:

• Adding several wine brands to its portfolio, Amass Brands — which sells spirits and non-alcoholic beverages — announced it has acquired operating assets from direct-to-consumer wine company Winc, according to a Thursday press release.
• The acquisition of Winc’s assets includes several brands, such as Summer Water, that it sells through a subscription delivery service. The deal will enable the companies to combine Winc’s DTC e-commerce platform with Amass’ “rapidly growing portfolio of wine and spirits sold through traditional retail partners,” per the release.
• A little over one year after going public, Winc in December filed for Chapter 11 bankruptcy protection.

Dive Insight:

The deal with Amass comes less than two months after Winc filed for bankruptcy.

The company, known for its wine delivery subscription service, filed with $3.4 million due in principal debt. Project Crush Acquisition Corp., whose CEO Mark Lynn also serves as CEO for Amass and co-founder of Winc, emerged as a stalking horse bidder with a proposed purchase price of about $10 million.

Winc had wholesale retail partners such as Target, Whole Foods and Albertsons. However, its revenue from DTC sales declined and led to liquidity constraints, according to court documents.

Winc’s second-quarter earnings from November showed that although wholesale revenue increased 32% year over year, DTC sales were down 11.8%. Net loss increased from $3.9 million to $4 million, while operating expenses increased 13.6%.

The wine company’s decline in DTC sales demonstrates the larger trend impacting the industry. The DTC wine shipping industry experienced its first-ever decline in volume (-10.3%) and value (-1.6%), according to the annual direct-to-consumer wine shipping 2022 report from Sovos ShipCompliant and Wines Vines Analytics. The report noted that wine consumers, especially those buying at under $50 per bottle, pulled back on DTC puchasing.

“No winery, regardless of region or size, appears to have avoided the effects of a retreat from consumer wine spending in the shipping channel,” the report added.

For Amass, the deal represents an opportunity to grow its customer base. “The acquisition of Winc’s amazing portfolio of wine is another step for Amass towards creating a next-generation beverage company,” Lynn said in a statement.

Amass isn’t the only company to have invested in DTC alcohol delivery. In February 2021, Uber purchased delivery company Drizly for $1.1 billion in stock and cash.