Fakers Not Makers and The Return of Philip James

There is a new era of companies trying to capitalize on the new subscription economy in the wine industry. Some like Wine Awesomeness, SommSelect, and Viticole follow the original model from days of old when the aptly named “Wine of the Month” club searched to find good deals or great new finds to bring to wine consumer. In parallel to these interesting curated clubs that leverage both new consumer behaviors and digital marketing tools comes an alternative group trying to capitalize on the “authenticity scam.” The majority of these companies look to participate in the market by sourcing bulk juice and creating false brands to fool unsophisticated consumers. Most of these companies like Winc.com, Nakedwines.com, Bright Cellars, Wine Insiders and more use this model or a variation of it. Mind you, it is not their business model that is insulting, it is the illusion that they have access to unique pricing and juice that equals the great and family owned brands at huge savings. It is their attempts to misrepresent authenticity. It is their endless generation of wine labels that have no meaning except to obfuscate where the wine really is made from the consumer. Writer Jeff Siegel, who focuses on inexpensive wines in his blog, has written about this phenomenon twice already (here and here) and I’ll let his writing tell you his thoughts on the wine quality. I don’t think all the wines they make are bad nor ALL of their wines are manufactured labels. Moreover I commend them for employing people and helping to off-load excess bulk juice. In the end, these companies are just playing a better internet game than wineries and quality wine retailers but mostly substituting plonk in the place of artisanal wine.

With that we see the return of one of wine-techs interesting characters. Many of us in the industry remember Philip James. One time climber of Mt. Everest, the man who rode 17,000 miles on his motorcycle for charity, the founder of two wine-tech companies, in the elite club of wine-tech leaders who have raised over $10 million dollars, and all around enigmatic British wine-tech entrepreneur. While his pollyanna Wikipedia page paints him as the most successful wine-tech founder in history, most of us in the industry remember a different story.

It all began when he founded Snooth.com which started as a Cellartracker competitor and morphed into a marketplace and then into a media company. Let’s not forget his egregious act of scraping Eric LeVine’s data from Cellartracker.com — https://www.jancisrobinson.com/articles/snooth-and-cellartracker. He then moved on to be one of the largest funded companies in wine-tech as he founded Lot18; originally a Flash Sale site where he seemingly he was super successful in spending a dollar to make $0.50 and eventually had to layoff 35% of its employees before Philip moved on. After various pivots, Lot18 has transformed into the Hot Topic of wine retailers (make no mistake, some of those labels look like some of the pop culture items I buy all the time).

Separated at birth?

Then he went on to publish a kickstarter campaign about a device that turns water into wine (https://vimeo.com/8884674). Although it turned out to be an elaborate stunt for a good cause and quite a few of the press were duped into featuring the absurd campaign claims, many of us inside the wine industry were not surprised that it was yet another hoax from Philip James. Fool me once, shame on you. Fool me twice, shame on me.

So now he’s back in wine and armed with $4,000,000 he has created a tangled web of companies starting with Penrose Hill at the top. Penrose Hill looks like an incubator of wine industry solutions but as you drill down into past he parent company (below) you see they are all just shells on top of the one theme — taking plonk and repacking it.

Then there is another “wine club” (the quotes are VERY intentional) claiming to unleash the cost shackles for the consumer to allow them exclusive access to vineyards and winemakers. From New York city.

If that wasn’t enough, why not launch another “create a make your own wine label for occasions” like the pioneer of custom wine labels, Windsor Vineyards (but without the quality vineyards, contracts and production facility).

And then his fourth company targeting large custom label orders also featuring their “proprietary VinePath technology.” Huh? Not sure how connected CustomVine is to the other three but it seems to have a crucial sourcing function . . .

So with all this new cadre of fakers vs makers what should we believe out from Philip James and the his new collection of companies? That he is a good actor returning to wine after two failed attempts to help the industry become better? A maker of companies to help the consumer? Or a faker, returning again to prey on the market conditions and ignorance of the consumer? Regardless of his intentions the key is that we all remain diligent in helping educate consumers on the difference between the fakers and the makers.