Winc Inc. 2

INVESTMENT HIGHLIGHTS

Stock Information

Winc is a differentiated platform for growing alcoholic beverages brands, fueled by the joint capabilities of a data-driven brand development strategy paired with a true omni-channel distribution network. Winc’s mission is to become the leading brand builder within the alcoholic beverages industry through an omni-channel growth platform.

Most Recent

• Craig-Hallum Capital Group reiterated its BUY rating and $13 price target
• WBEV’s return to YoY revenue growth in Q4 despite extraordinary COVID-era comparisons
• Net sales jumping 10% y/y to $18.5M, well higher than its $17.3M estimate
• WBEV’s core brands delivering 47% growth in case volume sold in 2021
• Winc’s brands in the wholesale channel up roughly 115% y/y to nearly 17,000
• WBEV’s five core brands grew 47% y/y in 2021, and cases sold surged by 167,000, up nearly 50% y/y in 2021
• At 0.6x EV/sales, market ignores the early signs that Winc is on the verge of profitably scaling its wholesale business
• $13 price target is based on 2.5x CY22 EV/sales, a discount to peers at 5.1x

Winc Snapshot

WBEV growth has been driven by its core brands that have gained top ratings from critics, a cult following from consumers, and significant growth at retail locations throughout the country. Among these brands is Summer Water, a rosé that captures the essence of laidback, easy drinking lifestyle creating tremendous social following and growth at retailers like Whole Foods, Walmart, and Albertsons. Another example is Lost Poet, a wine created in partnership with Atticus, an Instagram poet with over 1M followers, and that has found rapid success at Target. These brands have helped drive explosive growth in WBEV’s wholesale channel, which more than doubled in Q3 2021.

Investor interest was and still is primarily from WBEV’s innovative brand development process that has produced its national portfolio of brands and and its upcoming innovation pipeline that will soon span across multiple beverage categories. Winc is leveraging consumer data to inform brand and product strategy in a way that differentiates itself within the industry and allows them to scale brands in a much more capital efficient manner than our peers.

Competitive Analysis

Roughly 75% of WBEV consumers are 44 years or younger, the key Generation X and Millennial demographics – these consumers are the next generation that will dominate the wine and beverage spaces in the near future. Everything WBEV does is centered on its customer connection and the modern path to consumer created through its digital expertise and wholesale network – from brand aesthetics and values to social media engagement to its commitment to sustainability and organic wines. Informed by industry reports and their own proprietary surveys and data, Winc believes that sustainability and organics are among the most important buying factors for the younger consumer – and the company has listened and acted on it, nearly tripling its organic selection in 2021.

Catalyst Watch

Winc is the only beverage company leveraging the “best of the old”, at-scale wholesale distribution, with the “best of the new”, a direct digital connection to consumers with data-driven brand development.

Winc accelerated its online growth in 2020 due to lower online customer acquisition costs that were a result of COVID and customers turning online for alcoholic beverages. In 2020 they don’t expect the same growth pattern – instead, the company is focused on growing its core brands, launching its innovation products, and continuing rapid growth in their wholesale channel

The company noted excitement about its planned 2022 launches that include a bag format for its Dime brand (read: Dime Bag), a canned cocktail called WKND, and as well as a celebrity-backed brand that they hope to launch in the second half of the year. Winc is also launching new vintages for its current brands and exploring some partnerships with exciting retail accounts throughout the country.

In The News

Winc Reports Fourth Quarter and Full Year 2021 Financial Results

Winc’s Strong Wholesale Growth Driven by Unique Omni-channel Strategy

Winc Sees Unprecedented Growth in Its Organic Wines

Big Picture Opportunity

Multiple near-term catalysts. Massive market demand. Share price presents a compelling value proposition as Winc continues to integrate new brands, improve margins, and expand retail and wholesale agreements.