Wondry Wine Co. celebrated its two-year anniversary by filming an update for "Shark Tank" to showcase its growth since first appearing on the reality TV show.
The Dallas-based business agreed to a $225,000 investment from Mark Cuban in exchange for a 15% stake when it appeared on the show last year. Wondry makes bottles of fruit-forward and cocktail-infused wines such as watermelon rose and sangria especial and cocktails creams including sweet hazelnut and vanilla caramel.
Since the airing of the first episode in November 2022, the company grew sales from about $250,000 to $1.1 million, signed a 10-year distribution deal with Southern Glazer’s Wine & Spirits LLC and expanded its retail presence in Kroger, Target, Sam’s Club and Costco. Its products are being sold in almost 400 stores, up from 16 prior to "Shark Tank." And a deal with Cuban was formally inked in March.
"With our first airing, it was so wildly successful, so we're trying to make as much wine as we can and as quickly as we can," Wondry co-founder and CEO Whitney Gates said. "But in addition to that, we are expanding as we speak. We're in talks with other states. We're in growth mode right now, so that requires making wine around the clock. It requires meeting with retailers and distributors around the clock. That's what going into the holiday season looks like for Wondry."
National expansion is the primary focus right now. Wondry, which is set to reappear later this year on "Shark Tank" in a business update segment, recently expanded into Arkansas and Florida with Southern Glazer’s and in Georgia through a deal with Atlanta-based Savannah Distributing Co. It’s working with Southern Glazer’s to move into Pennsylvania and other states.
The company aims to identify large wine markets and distribute its wine across the entire Southeast including Alabama, Tennessee and Mississippi in the next year.
"We want to gain access to all of the states in the Southeast and begin to sell our products across major grocery retailers, mass retailers like Target and Walmart and club retailers like Sam's Club, so we can allow people easier access to our products," Whitney said. "Besides the Southeast, (we want to) focus regionally to build a cult following then identify power markets and eventually get outside to California to New York and to Illinois."
Wondry found its product line and consumer base by analyzing the entire wine industry. The brand discovered a lane for itself after reviewing annual reports for other wine companies and surveying industry shifts. Total wine sales have flatlined and even fallen in recent years and customers tend to be older, according to the 2023 State of the Wine Industry report by Silicon Valley Bank.
Whitney and her husband, co-founder and Chief Operating Officer Chaz Gates, then identified which types of consumers gravitated toward which types of wines and what categories were growing. Their end product and target consumer base became clearer each time they narrowed their focus.
The co-founders see themselves similar to the craft beer and seltzer brands that introduced new flavors to their respective spaces. Wondry aims to deliver the craft cocktail experience younger customers enjoy in a wine format.
The company produces and bottles all its 13.9% alcohol-by-volume wines from its Carrolton facility and partners with suppliers who extract oil from the skin of fruits, allowing the brand to achieve a fruit-forward profile without using artificial flavors. The brand currently contracts a small team of 10 people to help move products out the door.
"We decided to focus on crafting a product that blurred the lines between a premium wine and craft cocktail because Millennial and Gen Z are gravitating toward craft cocktail," Chaz Gates said. "Older generations still want wine. We married those two concepts and came up with Wondry. The name Wondry itself is wonder and dream because we are reimagining the wine experience. ... We (have) a clear-eyed laser focus on our target consumer, which is a multicultural woman. They tend to have sweeter profiles. They want something new and exciting, so we try to package something that would fit that consumer profile."
Pitching new products to stores is never easy, but positioning the brand to target Gen Z and Millennial consumers gives Wondry a story many retailers like to hear.
"When you have a really strong product proposition that fills a white space, it's much easier to sell a retailer because you're able to tell them quite easily, 'Our product will deliver more traffic to your stores and incremental growth to your wine category because we're reimagining wine for a consumer that you're not currently engaging,'" Whitney Gates said. "A lot of these retailers are not engaging the Gen Z, Millennial (and) the multicultural female consumer in a meaningful way."
Whitney Gates' childhood laid the groundwork for Wondry and inspired the creation of the brand. She grew up watching her late paralyzed uncle use glass gallon jugs, old plastic apple cider vinegar jugs and a plastic nylon glove to make wine from fruits like peaches and pears.
Chaz Gates had no prior exposure to winemaking, but his wife always had buckets of wine in her Uptown townhome when they were dating. So, he encouraged her to take a chance on the product.
When the couple launched the brand in Target and Total Wine stores in DFW, they made every single bottle of wine themselves. Now, the Gateses are in a chapter of their business where they’re focused on driving efficiency, which means continued investments in automation and identifying economies of scale.
"Whitney was pregnant (when we started)," Chaz Gates said. "We were exhausted. We had our original equipment that literally was a hand crank like a casino machine where you’re pulling down the lever to tighten the caps, and we had to manually put bottles up on a bottle filler line that filled the bottles by gravity. Now the business has grown to where we have a fully automated bottling line with a conveyor belt and fully automated bottle filler and capper. We just feel so fortunate to see this growth in real time."
Innovation for Wondry means disrupting existing categories. The co-founders created their cocktail cream line, a wine-based take on a cream liqueur, to get their products into mass retailers who can’t sell spirits and want to do something similar with other categories.
"We've got our eyes set on the sparkling wine category," Whitney Gates said. "When you think about, for example, the champagne experience, a lot of people can only drink champagne if it's mixed with fruit juice. ... How do we disrupt that category and deliver a champagne-like experience that people actually like? That's just one example, but we have many in the vault."
