Naked Wines’s Unique Business Model

At Naked Wines, customers are called 'Angels'

In a dusty lot next to the crush pad of a Sonoma Valley vineyard, more than 100 ‘angels’ gathered to taste wine and enjoy tacos, pizza, and pupusas from food trucks. This was the U.S. summer tasting of Naked Wines, an online wine subscription company that calls its customers ‘angels,’ because they ‘fund’ winemakers to produce wines, which angels, in turn, can purchase at wholesale prices.

“We live in Texas, and when we heard Naked was hosting an in-person tasting in Sonoma, we decided to drive out,” said one angel at the event. “We’ve been members for 5-years and have done a lot of online tastings with Naked winemakers. I’ve learned so much about wine and winemaking, and I really enjoy discovering new ones.”

The term, ‘Naked,’ refers to the fact that the customer doesn’t pay for hidden costs, such as advertising and distribution. All of the middle people are stripped from the equation, which can reduce the cost of a bottle of wine by 40 to 60%. Angels pay a $40 per month subscription, and then can select from hundreds of wines made around the world. They can also review the wines online, read the reviews of other angels, and receive a credit to their account if they receive a wine they don’t like.

“I’ve been in wine clubs before, and I’ve found them disappointing, because they just kept pushing off their wine,” said Justin Lester, a 5-year angel from Los Angeles. “With Naked, it’s really cool, because you pay for the subscription each month, and then you decide what you want. The only challenge is sometimes they do sell out, so you have to order wines quickly.”

The fact that the tasting was held outside in a dusty lot wasn’t as appealing to some long-time angel members. “The first Naked tasting we attended before Covid was in Napa and was very elegant with lovely appetizers,” reported Susan Wallace Gilbert from West Sacramento. “I loved being able to walk around, talk with the winemakers, and hear their stories. The vibe was great, and I’ve been a member ever since.”

Today Naked Wines has over 300,000 angels in the U.S., as well as thousands more in the U.K. and Australia, where they also have operations. The company is publicly traded on the London Stock Exchange, with Forbes reporting on a story of their restructuring and 28% share price increase in October of last year. Their revenue for the last fiscal year (LFY) was £350 million ($441 million), as reported in the company tear sheet, August 25, 2023.

The winemaker's name becomes the brand at Naked Wines

Naked Wines employs hundreds of winemakers from around the world, many of them from very famous wineries. In the U.S., some of the winemakers make wines for Naked part-time while still maintaining full-time jobs at their wineries (a common employment clause in many U.S. winemaking contracts). As I walked around the tasting event, talking with customers and winemakers alike, I discovered that there were several reasons that the winemakers enjoyed working for Naked Wines.

For many it’s the freedom to make wine in the manner they want that is appealing. Naked provides the winemaking facility and equipment, as well as the online sales channel for the wines.

“They finance you to make wine with no stress, and the customers are called angels,” reported Daryl Groom, former winemaker of the $800 Penfolds Grange and 8-time winemaker of the year. “I get to make wine from both Australia and California, and one of the things I like best is the pleasure of meeting the customers like this.”

Groom also said that he liked the fact that Naked Wines gives back to the community and charity. “For example, they gave $1 million this year, with a quarter of that going to aid in heart research.”

Matt Parish, who started making wine with Naked in 2012, and has worked at Stags’ Leap, Etude, and other famous Napa valley wineries, agrees with Groom on the ability to get closer to customers.

“When I was working with the large wineries, I was always one degree away from the customers. But with Naked, it’s a real pleasure because I get to work with great people and have a good relationship with customers. It’s like a chef in a restaurant that has an open concept, the chef gets to see how people respond to the food,” said Parish.

Part of getting closer to the customer is seeing the thousands of reviews and ratings the angels post about the wines in the online community forum. For example, Parish is listed amongst the 10 highest rated Naked winemakers, out of 193, according to angel feedback. To date he has received 191,575 ratings.

For sparkling winemaker, Penelope Gadd-Coster, who has made wines for Schramsberg, Mumm, and J Vineyards, there are other benefits of working with Naked: “The reason I joined Naked is because I tried to start my own brand, but found that sales, marketing, finance and administration took me into different spaces. Here they let me do what I love best - making sparkling wines.”

Ana Diogo-Draper, Naked winemaker, with Portuguese tile wine label design

For Ondine Chattan, a winemaker who focuses on making Russian River pinot noir and Mendocino Muscat, it’s the chance to help preserve heritage vineyards. “I’ve been a winemaker with Naked for seven years, and they treat winemakers very well. They allow us the freedom to find our own grapes, and I like to focus on old heritage vines, like the muscat canelli grapes that went into this wine. They don’t hammer you on the price of the grapes. They are very supportive.”

Finally, Ana Diogo-Draper, long-time Naked winemaker as well as Director of Winemaking at Artesa Winery in Napa, referred to the fact that Naked is unique in that they put the winemaker’s name on the front label as the brand. “Plus they let you get involved in the label design, so I selected a label for my wines that looks like the tiles from my home country of Portugal.”