Wine Startups Harness The Cloud To Bring Cabernet To The Clueless

(Forbes) - Millennials are confused by wine, apparently. The thousands-of-years-old practice of fermenting grapes and putting it into bottles needs to be completely re-imagined for the ever-connected and social-media-obsessed ‘Amazon Prime generation.’ This demographic, loosely characterized as aged 22 – 32, don’t know their Claret from their Beaujolais – but that’s okay, because now there’s an app, an algorithm and a subscription box for that.

“Millennial buyers want to be directly connected to the producer,” says Xander Oxman, Co-Founder and CEO of Club W, which provides a subscription-style delivery service of wines from small-scale producers. Club W, which costs $39 a month, is definitely not your grandmother’s wine club, with an algorithm that matches up taste preferences without the old-world jargon. Wines are curated by a network of ‘tastemakers’ and go for as little as $13 a bottle. Smart phone app users can scan a barcode on the wine bottle to instantly play a video giving you even more tidbits about the wine’s provenance and possible complementary pairings. Club W netted just over $3 million in financing from Los Angeles-based Crosscut Ventures early in 2013.

Oxman plans to expand into bottling wine in 2014, buying up juice on the global market and operating as a winery. He hopes these efforts will reduce distribution costs, allowing users to get “the best value from around the world,” he said.

Oxman is just one of many entrepreneurs pouring into the online wine, beer and liquor market. This industry grew at an average 12.7% between 2008 and 2013 according to a report this week from IBISWorld. Wine startups increasingly need to meet the challenge of satisfying the different and more rarefied tastes of millennials. For instance, the fastest growing segment – millennials are more likely to seek advice from friends and family on recommendations than ask a store clerk, according to research from Sonoma St