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Virgin Wines signs new partnership with Ocado

04 October 2024 By Arabella Mileham

Virgin Wines has teamed up with online retailer Ocado in a strategic partnership to offer a 50-strong wine range to Ocado customers as part of their weekly shop.

The launch, which is already live, will be first time that Virgin Wines’ range will be available to buy as individual bottles, it noted, as they had previously only been accessible to Virgin Wines customers as part of multi-bottle cases.

According to Ocado, this will expand their own customers’ choice by offering a broader variety of white, red, rosé, and sparkling wines, including some lesser-known grape varieties sourced from regions across the world. Ocado’s range already comprises 295 wines from its collaboration with Marks and Spencer and lists more than 4000 products in BWS on its website.

Ocado’s BWS trading manager Vanessa Pearson said that the Ocado team were increasingly looking for inspiration in terms of new styles, regions and producers for its customers, who liked the convenience of being able to add wine to their weekly shop.

“This is something we’re well positioned to deliver, as we don’t have the same shelf space constraints as other supermarkets and can quickly respond to trends and changing tastes,” she said.”

Virgin Wine’s chief executive officer Jay Wright said the collaboration would allow it to introduce Ocado customers to its hand-picked selection wines from its portfolio.

“Virgin Wines has long-standing relationships with a considerable network of independent winemakers across the world. Our team work closely with them to create a unique range that is constantly evolving to meet the varying needs of different consumers,” he said. ” I’m confident the wines selected for our range at Ocado will resonate with both seasoned wine enthusiasts and those looking to discover something new.”

Strategic move

The move is likely to be a highly strategic one, given Virgin Wine’s recent woes and tying in with its recent focus on acquiring new “high quality” customers.

It’s not been the easiest time for the online wine merchant, which issued a profit warning in January 2023, highlighting a decline in its revenue. These fell 17% in the first half of 2023 to £33.6m on the back of internal logistics issues, including “teething problems” with its new warehouse management system, along with inflationary pressures, macroeconomic headwinds and the cost-of-living crisis. The underlying earnings before interest, taxes, depreciation, and amortization (EBITDA) was reported to be £1.4m versus £3.9m in the first-half results for 2022, and two months later it launched a full business review.

Since then it has reported a “significant” increase in profitability for the first half of the year, and “strong momentum”. Year-on-year growth was up 2% in January 2024, to £34.3 million, with profitability also improving, with EBITDA up 122% to £1.75million, compared to only £0.8m in the first half of 2023. However, this is still below revenue for the first half of 2022, which stood at £40.6m.

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