A toast to online wine Video

A toast to online wine Video Transcript

>> Producing only 1 thousand cases of wine a year, Barello [assumed spelling] Winery - tucked away in the rolling hills of California's Napa Valley - is by all measures a tiny operation.

>> I enjoy staying small because I get involved on every level and that's what got me interested in the first place with the wine business.

>> The one job that winemaker Tom Farello [assumed spelling] leaves to outside help is marketing.

>> Their job is to sell and my job is to make wine.

>> He's partnered with Americanwinery.com: the latest start-up trying to attract the elusive online shopper: the wine drinker.

>> Online sales is a relatively new concept in the wine industry believe it or not.

>> Rather, make that a relatively new successful concept.

>> It's kind of viewed as kind of too many hoops to jump through to get it.

>> Complicated at individualized state shipping laws, combined with the consumers' hesitation to purchase alcohol online has stunted the growth of the industry.

>> There's no reason why wine can't be sold online just like all the other goods and commodities that have now become big sellers online. One of the references I use to support that is the way people thought about shoes and the way people thought that you must try on shoes before you buy them. However Zappos has completely taken apart that stigma and is now transacting a billion dollar's worth of shoes.

>> Unlike past failed websites that had limited inventories, Americanwinery.com showcases more than 25 hundred different bottles and carries no inventory since each winery ships directly.

>> A '94 Merlot and '97 Merlot. I'm happy to pay a commission to a salesperson that makes a sale and I'm also happy to ship from here and you know garner the full benefit of it.

>> The big benefit of some of these sites is that they can kind of be that personal [inaudible] for you.

>> They get to you know give you a very dedicated experience in the way that they you know handle your wine and the information that they can give you. And also they make more profit on that sale and that's a really significant factor for wineries and their economy as a small business.

>> Just 18 months old, one would think this challenging economic climate would be a horrible time for Americanwinery.com to ripen into maturity, but in fact some say the timing could be perfect.

>> Moving into a recession you know people aren't going to buy these big expensive bottles of wine. They're going to be buying cheaper stuff. So if they need someone to tell them you know what's cheap and still good? So there's going to be a big need for that.

>> Drops in prices just by a dollar or 2 do not significantly impact our business model. We can adjust and put our effort into different areas very quickly.

>> People need their juice. I mean if you love wine, you've got to have it. It's really part of your meal. It's more like a food. It's more like you know supplies for the home kind of thing than it is this specialty item. The 800 pound gorilla in the online wine business is Amazon who says they have plans to start selling wine online. You'd think that could hurt the smaller online companies like Americanwinery.com, but wine makers like Tom Farello are actually pleased. They say that any way a customer base can get interested and comfortable with a buying a product like wine over the internet is a good thing. In Napa I'm Kara Tsuboi, Cnet.com.