The King of Online Wine
Originally published in Northwest Palate May-June 2002 Mike Osborn readily admits he's a computer guy first
and a wine guy second. But that doesn't mean he doesn't love pulling
corks. At the Portland headquarters of eVineyard--now the nation's
largest online wine retailer after its 2001 acquisition of wine.com--
bottles of red and white wine sit just a few inches away from the water
cooler and coffee pot.
"It's a lifetime of learning," says eVineyard's
33-year-old founder and vice president of sales and technology.
"I'll know more about wine six months from now than I do now, and I want
that process to continue for the rest of my life. I think that makes me a
lot like our customers."
Although approximately 80% of America's wine consumers are
over 50, Osborn believes there's an ever-growing market of younger people
who are eager to learn about wine but feel cowed by the purchase process.
"Ordering wine in a restaurant or even a grocery store can be a highly
intimidating experience," Osborn says. "You're faced with hundreds of
products and very little information to base your decision on. And you
don't want to ask a lot of questions for fear of looking ignorant.
Selling wine online allows us to marry content, in other words bottles
and cases of wine for sale, with information about what you're buying.
Internet technology is the means by which you can demystify wine."
The website (accessible at either www.wine.com or
www.evineyard.com) lives up to that premise. A well-organized database
quickly links you to whatever you're searching for, whether it's a
particular winery, varietal, region, or price range. In seconds, you
can access the site's complete list of, say, Oregon wines and even
sort them by wine-industry ratings, if you like. (Editor's note: The
site comes up short on Canadian wines--only four, all from one
producer. We also found the purchase process a bit confusing. But the
Washington wine we ordered was reasonably priced, arrived promptly,
and came properly packaged.)"
The marriage of wine with Internet technology seems
Osborn's birthright. While growing up in Southern Oregon, he often
vacationed in California's Napa and Sonoma regions with his family.
Osborn's father was born in Vallejo, California, and some of Mike's
earliest memories are of touring the vast vineyards there. For most
of his life, however, it was switchboards and software interfaces Osborn
found most intoxicating. "I was into capitalism from a young age," he
laughs. "While friends worked at McDonald's or at the local supermarket,
I sold microcomputers and wrote software."
After graduating from high school in 1987,
Osborn enrolled at Portland State University, but soon dropped out to
start a business teaching software engineers about relational databases.
That business was so successful that Osborn and his wife-to-be began
taking lots of three and four-day weekends to his viticultural stomping
grounds in Northern California, as well as the burgeoning community of
wineries a short drive away in Oregon and Washington. "It gave us a lot
of time to learn about wine," he recalls. "Before long, it was a huge
part of our lifestyle." In 1994, Mike and Debra Osborn were married on
the grounds of Rex Hill Vineyards in Oregon's Willamette Valley.
In 1997, a few years after selling his company,
Osborn found himself working with Intel to roll out a software program
called Pandesic, designed to help retailers connect their web pages
directly to their inventories and operational systems. With the dot.com
revolution still in its infancy, however, Osborn decided to become his
own client.
In December 1998, the month eVineyard shipped its
first order of wine, Osborn's site was a second-fiddle competitor to
the larger, more aggressive wine.com. Ultimately, however, eVineyard's
way of doing business carried the day. While wine.com had acted as a
liaison between its website visitors and pre-existing retailers around
the nation, eVineyard established its own warehouses across the U.S.
This business model proved to be both more efficient and better adapted
to the existing "three-tier" system of wine distribution in the U.S.
As a result, and after its own site's 1,000% growth
rate in 2000 brought it an infusion of capital, eVineyard snatched up its
larger competitor in April 2001 and relaunched the site under the
moniker "wine.com by eVineyard." Since then the company has grown by
leaps and bounds. "Overnight our sales quadrupled and have steadily been
growing since," says Osborn.
Today, wine.com by eVineyard sells wine in 27 states
and Japan, representing over 75% of the domestic market for off-premise
wine sales, including each of the top ten U.S. wine markets. But despite
the ever-increasing reach of his online company, Osborn asserts that
the company's Oregon roots are still important. "We do try to be great
stewards of Northwest wines," he says. "We feel we're part of the local
wine industry. In that way, even though our business has a national
presence, we're proud to be somewhat provincial."
Oregon and Washington wineries now represent about
12% of the site's sales in the Northwest and about 5% nationwide.
California wineries account for approximately 44% of the site's national
sales. Osborn says the two largest Washington wineries, Columbia Crest
and Chateau St. Michelle, do very well on the site, while vintages from
Willamette Valley and to a lesser extent other Northwest appellations are
reaching cult status. "Single-vineyard wines are particularly an Oregon
phenomenon that the wine world is excited about," he says. "People are
really seeking these products out." (Our site search turned up an
array of Oregon single-vineyard offerings from Adelsheim, Archery Summit,
Panther Creek, Rex Hill, and Sokol Blosser.)
More comfortable behind a desktop than under the
spotlight, Osborn would always rather talk about his business than
himself, but when asked for a personal favorite, he unequivocally
chooses Pinot Noir. "Without a doubt," he says. "Of course Pinot Noir
varies widely among producers, but with three awesome vintages in a
row, it's hard to argue against that varietal right now." He also
confesses to a soft spot for Zinfandel, and attests that Müller-Thurgau
goes surprisingly well with spicy food. Eager to explore European
vintages, Osborn and his wife scheduled a wine tour of Tuscany but
had to cancel it in the wake of September 11. "But we definitely will
get there," he says.
Meanwhile, the fresh-faced tycoon intends to ensure
that eVineyard keeps thriving in an age when the bottle has gone empty
on many a dot.com business. "Wine is a lifestyle, but a lot of people
need help breaking down those barriers to make buying and drinking less
intimidating," says Osborn. "And that's precisely what we have in mind."
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