Delivering Wine to Customers
- Mike Tango Bravo
- MICA VERA
his section describes the many different ways end customers (drinkers) can acquire bottles of MTB wine today, and in the future, using the Openvino processes. The importance of this section is to explore the different new business models that Openvino introduces.
First let’s evaluate the four different components that are involved in “traditional” wine sales, the model that Costaflores uses today.
Markets: Where does Costaflores currently sell wine?
Stakeholders: Who are the different players involved in the supply chain?
The trade flow: How does the wine move from the winery to the drinker, what costs are incurred along the way, and how does money move.
Problems: What are the problems this traditional model presents today to Costaflores and the other stakeholders?
The Markets
In what markets are Costaflores wines currently available, and where does Costaflores expect to sell wine in the near future (24-36 months). What is the price point for Costaflores wines today?
Argentina
Mendoza (local sales)
Greater Buenos Aires
Other cities
The rest of the country
Brazil
Sao Paulo
Rio de Janeiro
The rest of the country
India
Mumbai
Pune and the rest of Maharastra
New Delhi
Gurgaon
Bangalore
Other parts of India
Spain and the EU
Barcelona
The rest of Spain
The rest of the EU
Places Costaflores is not selling today, but MUST be selling by May 2021:
USA
The United States should be an important market for Costaflores. The USA presents the particular challenge of the three tier model. However, identifying a “technical importer” and distributor should be feasible, once the Openvino model is properly communicated.
Canada
In the past, Costaflores has sold wines in Ontario. Based on that experience, sales could be reactivated in this market and in Quebec.
Uruguay
Congo and other non-traditional wine markets
In the past, Costaflores has sold wine in the Republic of Congo, Mauritius, Hong Kong, and Senegal. Other non-traditional markets should be explored, including Russia, Aruba, or crypto-friendly nations like Korea and Japan.
Stakeholders:
(JC y Lucas, crear iconos para cada uno, para mostrar la relación entre sí)
The Winery / Producer (i.e. Organic Costaflores S.A.)
The winery is where the wine is produced and bottled, and from where it is initially shipped. Today, the winery Cuchillas de Lunlunta is the legal entity that produces Costaflores wines.
Cold storage: Winelock, BsAs Deposit, Finca Costaflores
Wines are shipped from the winery directly to the cold storage facility in Perdriel operated by Winelock. At Winelock, the wines labeled, boxed, and palleted for shipment. From Winelock, some stock is shipped to a cold storage facility in Buenos Aires or directly to Finca Costaflores for distribution in Mendoza. Wines that are exported abroad leave Winelock and are handled by the shipping forwarder.
Forwarder
Costaflores, or the wine importer, hire a shipping forwarder to transport the wines from the cold storage facilities to the port (Buenos Aires or Valparaiso, Chile), and from there, by ship abroad. On some occasions, small quantities of wine might be air-freighted abroad.
Delivery
For domestic deliveries, different shipping methods can be used, including personalized deliveries by the brand representatives.
Customs Agent
The customs agent in Mendoza (Jorge Lopez) is responsible for handling all the export paperwork
INV
The Instituto Nacional Vitivinícola is responsible for registering the amount of wine produced during a harvest, approving Costaflores labels, analyzing wine for export, and tracking wine as it is sold for export or for domestic consumption.
The job of registering these movements with the INV is job of the external agent / gestor (Juan Carlos Campos).
Bonded warehouses Brasil holding, San Cugat, Indian Boded warehouse
When wines are received abroad (i.e. India, Brazil, Spain), they are often initially held in a government bonded warehouse, until the customs and excise duties have been paid.
Importers
Costaflores works with importers in different countries. These importers are responsible for receiving the wine shipment and managing the customs and excise taxes.
Distributors (Wholesaler)
In most countries, the wine importer must legally be a different entity from the wine wholesaler, or distributor. The distributor, or wholesaler, can only sell wines to retailers. In the United States, the importer, the distributor, and the retailer, must be three separate, unassociated, legal entities. This is known as the three-tier system, and is a legacy of 1930’s prohibition laws.
Reseller (Retailers)
The wine reseller, or retailer, can be one or more of the follwing:
Restaurants and bars
Wine shops (vinotecas)
Online retailers
Brand representatives (salespeople)
The brand representatives are the people who work for the distributors (wholesalers) and sell to the resellers (retailers). These representatives might be in charge of reselling wine from the distributor to the retailers, or in the case of domestic sales, they might be responsible only for coordinating the sale between the retailer and the wine producer (Costaflores). In Buenos Aires, Pia Argimón is the brand representative for Costaflores. She regularly visits retailers (restaurants, vinotecas, etc.), promotes Costaflores wines, and collects orders. Costaflores bills the retailers directly, and pay Pia a commission on the sales. For sales in other countries, the brand representatives are normally employees of the distributor.
Brand Ambassadors
Brand ambassadors are people that promote Costaflores wines at events, tastings, on social media, etc. In some cases, they might be brand representatives at the same time (and receive commissions for sales). In other cases, they might receive commissions for promotional services, but not be directly associated with the resulting sales. A sommelier hired for a tasting event, or an online influencer, would be examples of brand ambassadors.
Marketers
Marketers are the people responsible for posting on social media, coordinating press releases and working as press agents, searching for bloggers, online influencers, coordinating marketing content development, identifying wine events and speaking engagements, and tracking and analyzing traction from different campaigns across the channels of engagement.
Servers
Restaurant waiters, bar tenders, and vinoteca sales people are the customer facing servers.
Drinkers
The drinkers are the customers, the people that pop the cork and imbibe Costaflores wines.
Trade Flow:
Given the many aforementioned stakeholders and sales processes, let’s analyze some of the different traditional trade flow models.
Direct sales in Mendoza from Finca Orgánica Costaflores
Sales in Buenos Aires
Brazil
India
Spain / EU
USA: the three tier model
Direct sales in Mendoza from Finca Orgánica Costaflores
Sales in Buenos Aires
Brazil
India
Spain / EU
USA: the three tier model
Problems
Hard to collect payment:
Argentina
IndiaBig commitment for importers
High excise and import duties
The Openvino delivery model
In essence, the model used for delivering wine from the winery to the glasses of drinkers, looks like this:
Direct-to-Drinker
In the most basic of processes, the drinker buys the wine directly from store.costaflores.com with tokens, and Costaflores organizes delivery.
The drinker buys tokens through the Costaflores vintage ICO, from a crypto exchange or store.costaflores.com, or through a peer-to-peer transaction.
The drinker buys bottles of wine from store.costaflores.com using the tokens. Costaflores.com burns the tokens.
store.costaflores.com charges and invoices the drinker for the shipping and handling services of the bottles.
Costaflores organizes the shipment of the wine to the drinker.
Direct-to-Drinker through an importer
In this instance, the drinker is still purchasing the wine directly from store.costaflores.com with tokens, but the delivery is not direct from Costaflores to the drinker, but through an importer/distributor.
The drinker buys tokens through the Costaflores vintage ICO, from a crypto exchange or store.costaflores.com, or through a peer-to-peer transaction.
The drinker buys bottles of wine from store.costaflores.com using the tokens. Costaflores.com burns the tokens.
store.costaflores.com charges and invoices the drinker for the shipping and handling services of the bottles.
Costaflores organizes the shipment of the wine to the drinker.
Sales through a reseller (wine shop or vinoteca)
In this case, the drinker is purchasing the wine from a wine shop (vinoteca) or restaurant, or through an online retailer that is selling bottles for fiat. The drinker is not purchasing tokens. The token purchaser is the vinoteca, restaurant, or online retailer, or possibly the token purchase was handled directly by the importer or distributor.
Use case examples
In this section we explain the supply-chain processes for the Openvino delivery model by exploring the following example use cases:
Direct-To-Drinker in Mendoza
Wine shop in Buenos Aires
Wine shop in Rio de Janeiro
Restaurant in Sao Paulo
Wine shop in Mumbai
Restaurant in Gurgaon
Direct-to-Drinker in Bangalore
Direct-to-Drinker in New Hampshire
Wine shop in Barcelona
Direct-to-Drinker in Münich
Wine shop in London
Direct-to-Drinker in Auckland
Direct-to-Drinker in Riyadh