A revolutionary way of buying and selling wine has been launched by the Winemakers' Federation of Australia. Wineries will be able to link up directly with wine-buyers without going through middlemen, such as wholesalers, by using a website named From the Producer.
The savings, at least in theory, can be shared by both the producer and consumer, as the winery can keep all of the sale price and the buyer can obtain the wine cheaper than from a traditional retailer.
The site, fromtheproducer.com has emerged at a critical time when we have a record number of producers trying to sell wine in an ultra-competitive marketplace. Retail channels are narrowing as more and more of the wine market is dominated by a handful of big supermarket retailers.
It's what insiders such as Tony D'Aloisio, the president of the federation, call a new route to market.
D'Aloisio, the former chairman of Australian Securities and Investments Commission, is himself a wine producer, whose Yarra Valley winery Oakridge is one of the first users of From the Producer. Oakridge is developing a new dry white, an arneis, which, because of limited quantity is well suited to this kind of salesroom. Oakridge has also listed a merlot.
So far, the site lists about 570 wines from 60 producers. It should have many more as soon as the word gets around. The number of wines and producers is limitless and food products such as cheeses, olives and oils are also offered. There is no cost attached to selling this way and producers can offer niche wines, rare and limited production wines, or test-market new varieties.
The cost of developing, building and hosting the site has been shouldered by Melbourne-based IT entrepreneur and philanthropist John Cameron, who heads a company named Cameron Edge. He was a member of the team that developed an automated trading system for the Australian Securities Exchange that enabled it to make the switch from a physical trading floor.
John Cameron and his wife Alison are also directors of the Cameron Foundation, which was established with the proceeds of the sale of Cameron Systems to Orc Software in 2006. The foundation donates about $500,000 a year to charities mainly in health, education, human rights and disaster relief. It is closely associated with Cameron Edge, which creates computer software and services. Its aim is to generate income for the foundation and use technology to support worthwhile causes.
D'Aloisio has described From the Producer as an extension of the cellar door and an important addition to the retail landscape. Balnaves, Yalumba, Angove, Lowe Winesand Oliver's Taranga are already involved alongside Oakridge. Wineries large and small are equally welcome to use the site.
Wine producers in remote areas, such as Coonawarra and Frankland River, where the potential for cellar door sales is limited, will find the site especially useful. Kirsty Balnaves, of the Balnaves winery, says Coonawarra's location about three hours by car from Adelaide and four from Melbourne counted against many people making the trip to buy ex-winery.
John Cameron describes From the Producer as a free, neutral, central market-place where consumers can find local producers and their products.
''It's completely automated and managed by the producers themselves, which means it costs almost nothing to run.'' he says. ''I have put it 'on the cloud' where it can run forever as a free service allowing local producers and consumers to connect and do business.''
Cameron is a wine lover who saw a need, researching and refining the system by travelling the world. He got WFA involved from the beginning, because he realised consumers would need a guarantee that the producers they were dealing with were not going to run off with their money and fail to deliver the goods. Hence, every winery selling on the site must be a registered member of WFA, meaning wineries in other countries and importers cannot join . This fits the aims of the business, which focus on helping Australian producers. Food producers must also be affiliated with their peak industry organisation. This should create consumer confidence that the producers on the site are reputable and reliable.
There are more than 2500 wine-producing entities in Australia, many of whose products are not sold through the conventional retail chains. The number of wine producers is unlikely to be greatly reduced any time soon, and this diversity is an important advantage of the wine scene. Much of the creativity, energy and excitement comes from the small producers who have the least marketing clout. This initiative is a valuable opportunity for them - and indeed, possibly, a lifeline.