Constellation Brands announced on Wednesday its purchase of Empathy Wines, a direct-to-consumer (DTC) wine platform and a “digitally-native wine brand”. Terms of the deal were not disclosed. Empathy Wines focuses on producing high quality, sustainably made wines, sold direct-to-consumer through its eCommerce platform, powered by consumer insights and content-driven digital marketing.
Gary Vaynerchuk (founder of VaynerMedia and Creator and Host of Wine Library TV) and former VaynerMedia executives Jon Troutman and Nate Scherotter founded the business in 2019 to create quality wines made of grapes sourced from sustainable growers, and at a USD 20 per bottle price point that benefits both the consumer and the farmer. Empathy Wines has gained traction quickly with consumers, propelled by the founding partners’ expertise in scaling consumer brands and building brand equity in a digitally-native way, while providing an elevated purchasing and delivery experience to the consumer. The brand has experienced impressive growth since its initial product launch in 2019, selling approximately 15,000 cases and acquiring more than 2,000 subscription customers to date.
As part of the agreement, Empathy Wines brand will be integrated into Constellation’s wine and spirits brand portfolio. Empathy Wines employees, including co-founders Jon and Nate, will join the Constellation Brands family and work together with its wine and spirits organization. Vaynerchuk will continue to assist Constellation Brands and Empathy Wines in a consulting capacity.
Constellation will work with the Empathy Wines team to further scale the brand’s growth, while leveraging their rich consumer insights and analytics, proven brand building expertise, and high-performing digital technology to build DTC and digital capabilities that Constellation intends to scale across its wine and spirits brands to help deliver strong and sustainable growth for its portfolio.
This move aligns with Constellation’s wine and spirits vision to focus on so-called ‘power brands’ in the wine sector which sell for more than USD 11 per bottle at retail. In March last year the company announced to discontinue up to 40 percent of its underperforming wine and spirits brands (inside.beer, 01.03.2019). One month later, Constellation entered into an agreement with E. & J. Gallo Winery, the world's largest family-owned winery, to divest more than 30 wine and spirits brands, along with six winemaking facilities located in California, Washington, and New York. The sale, was valued with USD1.7 billion (inside.beer, 9.4.2019).
“We are committed to transforming our wine and spirits business into a high-performing brand portfolio that consistently delivers growth and shareholder value,” said Bill Newlands, president and chief executive officer, Constellation Brands on Wednesday.
“Key to our strategy is being consumer obsessed – building a direct relationship with our consumers, meeting them where they are shopping and engaging today, and pushing beyond to meet their evolving preferences well into the future. We believe Empathy Wines has the right team and approach to help us deliver exceptional brands and experiences to our consumers, and thereby industry-leading growth, by expediting our ability to more deeply connect with consumers and build the strongest direct-to-consumer and digital commerce business in the category.”
“Our ability to understand and ‘empathize’ with the modern-day wine consumer’s behavior, wants, and needs has been proven through Empathy’s incredible growth,” said Vaynerchuk. “We are excited to replicate this modern-day, consumer-centric approach at a larger scale, and with more infrastructure, working with a portfolio of some of the most iconic brands in the world of wine, and with leadership that is making investments in a quickly evolving category.”