Saturday 19 October 2019

Enter ootra – the app shaking up wine distribution in Australia

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Richard van Ruth came up with an alternative to traditional wine distribution. It’s called ootra and it’s set to take the industry by storm.  

It’s the same old song. Winemakers blame their distributors for not doing enough to move their wine, and distributors blame winemakers for not helping. There’s angst and bitterness and too often it all ends in tears. And sometimes in court.

Richard van Ruth wants nothing to do with it.

After more than 20 years in the wine industry including stints with Mildara Blass, Petaluma, Liberty in the UK and a long tenure with Primo Estate, he knew there had to be a better way.

Enter ootra, which tips the traditional distribution model on its head. The app allows wine producers to connect directly to restaurants and wine merchants, bypassing the traditional sales team and putting winemaker and customer directly in contact. It features a diverse portfolio of emerging and unique wine brands.

“I was talking to my now-co-director before this whole business model came to light about the need for the wine industry’s incumbent distribution model to evolve,” Richard says.

“The discussion revolved around the frustrations everyone seems to be feeling, that by and large the wine producing community go around bashing their distributors because they are not getting the outcomes they want or think they should be getting.

“And if you’re a distributor, you’re frustrated as well because you’re not necessarily able to deliver the results your users want, let alone sustainably make a profit. The frustration extends to trade buyers, who increasingly vent their frustration at the endless stream of reps bashing at their doors.

“Watching these three user groups get increasingly frustrated, I thought there had to be a  model of trading that can be managed effectively between buyer and seller.”

When setting up ootra – which is supported by a significant family wine company – Richard targeted the top third of the restaurant trade and the best independent retailers around the country, researching their wine buying habits. Then he went to winemakers with his radical idea, also researching how they run their businesses and market their wines. They liked the ootra concept and Richard began to assemble a portfolio of products to suit what the trade were seeking.

“ootra gives wine producers complete transparency and control, as well as ownership of the relationship with the customer, and that resonates strongly with the bunch of winemakers that form the core of our portfolio,” Richard says.

“They also appreciate the opportunities to build brands nationally, target the right venues, own the relationship with the customer and get paid on time.

“The challenge now is getting trade buyers and managers to pause and take a look at ootra and understand what the platform is and what the benefits are. Of course there is a stream of people storming into their venues every day trying to sell them something.

“But we’re getting there, we’re increasingly utilising our winemakers as part of that process and we’re building a community, which is a strong theme with ootra – buyers and sellers coming together. And each time someone joins that community it makes it stronger.”

It’s one of those ‘why didn’t I think of that?’ ideas. “It’s more telling when I speak with someone outside of the wine industry about what I’m doing,” Richard says. “And they’re like ‘Oh, hasn’t that been done in the wine industry yet?’ And I’m like ‘nope’.

“The wine industry has hung on to a legacy model of trading which in this day and age is becoming harder and harder to sustain, particularly for small to medium sized operators on both sides of the equation.

“We are creating a more sustainable model of trading – giving control of pricing and discounts and, ultimately, profitability to the producers. They’re not being told what price to sell their product for. All I’m letting them do is to use ootra as a tool to market their brand.”

A major benefit of ootra for both winemakers and the trade is the data they will receive including detailed information about what’s selling (and what’s not) and where.

“Our data will tell the story,” Richard says. “Sharing these insights with our producers will become quite powerful, particularly in terms of the on-trade because there is no real single source of truth for on-trade data. Most of the stats you read are based on sets of assumptions.

“Trade buyers will also gain insights into what’s happening across the market including trends and opportunities.”

Mothervine in Adelaide has 500 wines on its list and supports new and emerging wine producers. “ootra is really helpful for people on both sides of the wine trade,” venue manager Patrick Madden says. “It’s an easy platform to have a look at what’s new – and available – and get information directly from the winemakers.

“I can do everything from the one app as opposed to jumping from email to phone calls to Facebook messages. With ootra it is all in one place. More and more wineries are getting on board and I think it could snowball.

Emma Farrelly, director of wine for State Buildings in Perth, agrees. “I like the ability to go to a wine space and find an array of really small producers in the one location,” she says. “You connect directly with wine producers and don’t have to talk to anyone else. The contact is quite personal.”

Winemakers who are on board include Catlin Wines in the Adelaide Hills, Dabblebrook in McLaren Vale, Freehand in Mount Barker (WA), Gala Estate in Tasmania, Lady & The Hawk in the Yarra Valley, LS Merchants in Margaret River and The Stoke Wines in Kangaroo Island.

The ootra ‘cru’ – a panel of winemakers and sommeliers – develops the portfolio mix, evaluating brands for inclusion on the site and curating their own wine ‘playlists’.

Richard says the Australian wine community has too much going for it to spend half its time stressing about distribution.

“What’s beautiful about the wine industry is there are so many people who are passionate dreamers and artists, in a way, who paint these wonderful sculptures that are called wines and then present them to the world and want someone to come and buy them,” he says.

“Long may it be the case, but we don’t need friction. If ootra is a conduit to help buyers and sellers of wine come together it will assist both sides to understand each other’s needs better and form stronger, more mutually beneficial relationships. It’s a powerful part of what we’re doing.”

ootra has just employed its first business development manager, based in Melbourne. Richard says the business is reaching a tipping point and is humbled by the strong support from producers and the trade. He isn’t sure where ootra will end up, but says the possibilities are endless. “I’m not writing the script as such at this stage,” he says.

Richard is an iconoclast from way back. “I’ve always been someone who’s thought differently to others. I noticed it at school. I wasn’t a conformer to conventional ways of thinking,” he says.

“It really came to me clearly in the mid-90’s. I started working at The Ed Cellars at Mitcham and fell in love with the wine industry and wanted to make it my own. I ditched my Science degree at Adelaide Uni and started doing marketing at UniSA. A year into that course I thought, ‘My God, I’m just learning stuff that other people regurgitated.’ There was no new thinking. Almost the minute they write those marketing text books they’re out of date. I took a sales job at Mildara Blass and treated the next 10 years as my tertiary education.

“I’ve always looked at what’s in front me – including wine distribution – and thought, ‘is this the best way we can do it?’ It’s part of humans’ evolution to say there’s got to be a better way. Otherwise we’d all still be living in caves.”

ootra.com.au

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