Italian on-line wine retailer expands into UK

New online retailer Tannico aims to drive the UK Italian wine market. We ask Marco Magnocavallo about the start of the company in Italy, its move into the UK and its development internationally

Marco Magnocavallo Tannico

Italian on-line wine retailer, Tannico has launched its first international branch here in the UK. The company became the Italian market leader after just three years, with 15% of the market share and 40,000 customers.  Over 250,000 bottles were sold in 2015 and the company has already achieved an impressive 50% return customer rate. The website offers a portfolio of 6,000 wines, of which 500 are stored in a UK warehouse to meet 48 hour delivery deadlines. The entire Italian portfolio will be available to ship from Italy by the end of 2016, with delivery within 10-12 working days. 

How did Tannico begin?

I have a passion for start-ups. I set up Tannico in late 2012, in Italy, having previously founded Blogo, an online vertical publishing business, and Boox, a startup accelerator. I decided I wanted to create a new Italian start-up in the retail sector. I chose wine because: 1) Italy is one of the world’s largest wine producing countries with over 100,000 wineries, and 2) the Italian online wine market was at only 0.2% of penetration with huge opportunities for growth over the next few years. In just three years, the company became Italian market leader, with 15% of the market share and 40, 000 customers.  Over 250,000 bottles were sold in 2015 and the company has already achieved an impressive 50% return customer rate. We believe firmly in representing small producers, who represent a huge 10% of our sales. 

Why are you focusing on the UK?              

Italy can seem complicated for consumers, with so much to offer from so many regions. We aim to position Tannico as the leading online shop for the Italian wine enthusiast, at any level of knowledge. I feel Italy is underrepresented here in the UK when it comes to small producers, and I will bring these directly to the market, through an easy to use, factual and enjoyable online retailing platform. Later this year, we launch the entire catalogue available to ship from Italy, which will contain over 6,000 different bottles. If you’re seeking a Barolo – we will have more than 70, whereas other UK merchants may only have up to five.

Accoding to the IWSR, sales of Italian still wine were down by 4% in 2015, whereas Italian sparkling wine has boomed by +58%. Do you think Tannico can reverse these figures?

Tannico will offer the most extensive list of Italian wines to UK consumers, many of which are exclusive so not available from any other source. Our site educates and provides informative tasting facts and figures and descriptors to help our customers navigate their way around Italy. We hope to spark customer intrigue about still Italian wine.

What are your launch plans for the UK, and how much are you investing into this market?

Throughout September, we have been running a soft launch to ensure that the operational side of the business and the functionality of the site work perfectly, as well as investing a lot in online marketing (Facebook, Google Adwords etc). We are also planning a launch party for the trade at the end of October/beginning of November.

The online wine shop is a competitive market here with many established retailers. What makes you think Tannico will succeed over others?

Firstly, we have a catalogue of well over 6,000 Italian wines, thus the choice for the consumer is extremely broad. We also believe in having detailed information that is informative as well as aesthetically pleasing, making the consumer journey easy and educational. For each wine, we cite tasting notes, awards and scores (JS, Gambero Rosso, Luca Maroni, Parker, etc.), food pairings, a description of the winery, and our own score. All our listed wines are tasted by our sommelier team.

We will replicate our Italian model, which uses a lot of intellectual technology, including IA Algorithms, personalisation, and one-to-one emailing.

We are warehousing 500 wines in North London which can be delivered anywhere in the UK within 48 hours.  Delivery is free for orders over £89.  We have a portfolio of 6,000 wines which will be available on a 10 day to 2 week delivery basis from Italy.  We aim to price the wines competitively for the UK market, and offer promotions on a rolling basis.

The aim is for this to be the dream shop for any consumer who is passionate about Italian wine – whether that be Prosecco, Sicilian whites, fine Amarone... 

You mentioned earlier that you feel smaller producers are underrepresented over here. What do you feel can be done to change this?

We call them Piccoli Produttori. From the end of 2015, we began a new line of business that focused on the small producers, which we define as under 100,000 bottles produced per year. Italy has an enormous wine production – over 100,000 wineries. The majority of these have issues getting their products listed and/or exported, hence many of these wines remain local. However, we find many of our customers are developing a keen interest in small producers, who produce artisan wine with love and passion, resulting in wines with highly unique characters. We travel around Italy in order to find these wineries, and already have well over 200 on board. At the moment, we have 44 of these wineries listed on our UK site. This figure will continue to grow.  

After just one year, the small producers already represent more than 10% of our sales, and this figure is growing month on month.

Where do you see Tannico going in the future?

Later this year, we are launching Tannico Intelligence, which is targeted at wineries and consorzi. It will help the wineries to better understand the dynamics of the online market, with data available regarding their brand and products. This will include pricing around Italy, who is buying their wines and where from, brands they are similar to, and comparisons with other brands.

We achieved market leadership in Italy in just three years with a 15% market share. Following the UK launch, we are looking to expand to Switzerland and France in 2017. The combined online market for these three countries is 1 billion. By 2019, we are aiming for half of our revenue to come outside of Italy.

How is Tannico funded, and who are the shareholders?

The company was launched with a €200,000 seed investment from Boox. Six months post launch, €500,000 was raised from different Italian angel investors. We aim to expand to Switzerland and France in 2017, with by 2019 the target of €40,000,000 in revenue, half from outside of Italy. In order to reach this objective, we have just released a new round of funding for €4,000,000 on September 29.  

21 November 2016