Napa’s WineBid selling to Third Leaf Partners–led group

WineBid Inc., said to be the largest online auction house for fine and rare wines, is being acquired by an investment group led by San Francisco-based Third Leaf Partners, which has a portfolio of emerging and established beverage and hospitality brands, the companies said June 8.

The deal still has to be approved by their shareholders, they said. The plan is to keep senior management and staff as well as grow and expand the business.

Napa-based WineBid was started in 1996 and has operations also in Chicago and Hong Kong. WineBid’s CEO called the deal “a great union.”

“The acquisition by Third Leaf’s group is a great move for both companies,” said Jerome Zech in the announcement. “Third Leaf’s portfolio of boutique wine and sake brands, and relationships and experience in beverage and hospitality more generally makes them a very complementary partner for WineBid.”

Third Leaf co-founder and managing partner Aaron Faust said he first encountered WineBid a decade ago while buying old and rare wine on the site.

“We were introduced to Jerome and his team in a professional capacity several years ago, and have had a great working relationship,” Faust said. “We’ve been looking for ways to expand and enhance that relationship, and this is the culmination of those efforts. We believe that it will create a strong, strategic alliance for both businesses to create growth opportunities, an excellent return for current shareholders and a dynamic business for WineBid management and staff.”

WineBid said it has 90,000 registered bidders. It claims to have sold so far 684,500 bottles of California cabernet sauvignon wines, 487,900 bottles of Bordeaux, 260,500 of Burgundy, 72,100 bottles of “first growth” labels and 37,300 of Champagne, according to the website (winebid.com).

The company holds 52 auctions a year and said it gets in thousands of bottle weekly.

It also has an import business, Peloton Imports, to offer wines directly from European producers.

Third Leaf is currently working with wineries based in California, Oregon, France and Italy, including Antica Terra, the work of Maggie Harrison, and Gothic Wines, started by Josh Nadel, according to its website (thirdleafpartners.com).

http://www.northbaybusinessjournal.com/northbay/napacounty/7079654-181/napa-winebid-third-leaf-partners

Man, i hope this ends up being a good thing (i.e. they don’t F it up) as I’m a big fan of Winebid as it currently operates.

Good time for Cellar Tracker to expand into a selling niche!

There was just a thread lauding WineBid’s service. It made me eager to use them. But an ownership change may mean a trickle-down effect in the culture there. Hope not.

Do you think they charged Third Leaf a 20% buyer’s premium?

+1

after tax of course.

We used to buy a large percentage of our juice from Winebid, some 6-12 years ago… but I eventually noticed a 5-10% corked / tainted rate from their bottles. Yes, I understand this happens with 2nd or 3rd hand wines… but I haven’t had this same bad luck with other online re-sellers or auction houses.

Why would cork taint happen more frequently with 2nd and 3rd hand wines? One might expect slightly higher flaws do to heat damage and the like, but I think cork taint is either there or not.

Was gonna say the same thing, Tom . . .

More heat damaged wines. I no longer buy older wines from winebid but newer vintages have never let me down.

Hopefully no problematic changes. I’ve only bought about 30 bottles off of winebid over the past two years, average age 4-15 years old, but I guess by avoiding any bottles listed with raised cork, bubbled capsule etc, or anything beyond original owner, I’ve been lucky to never have a received single damaged/corked bottle.

Tons of opportunity here. Will be interesting to see how it goes. Winebid has had flat sales for 10 years which is a long time to have basically zero growth. They charge outrageous commissions, by far the highest in the industry at 17+17 and mandatory insurance even for VIP or very large sellers.

Given that people still use them and that the customer service is good, there is plenty of opportunity to increase efficiency and grow a bit.

Why would any serious collector consign with WineBid?

They have a very wide customer base and are good for individual bottles.

But that is spoken as someone who has never consigned anything to auction but used to be addicted to checking winebid every week. But as everywhere else prices have escalated a lot over the last 5 years or so.

Because for certain types of wines, they give the seller the best prices. I have sold a few cases with them over the years and their hammer has almost always come it over the estimate I received from other auction houses.

I consign with them regularly. They reach a lot of buyers. I’ve gotten good returns even with their commissions.

I agree completely. They are very effective for specific types of consignments.

I have sold through them a few times and my consignments have generally been a mix of ones and two’s of $50 - $100 bottles. Their projected yield has always been better than I have been offered by other Auction firms and the projection has always been on target.

Winebid- as with any other auction or broker resource- has its sweet spots as well as areas in which it might be better to take your wine elsewhere. There is no such thing as the auction house or broker that is going to give you the best return on everything. When I suggest sales options to a client planning to liquidate most or all of a collection, the advice is typically to split the collection into 2 or 3 parts for offering to different brokers/auction houses.

Winebid provides a valuable and reliable service, and is not only very often the ideal vehicle for selling a collection, but also has about the lowest minimum expected sale requirements out there to accept a consignment.

In the interests of disclosure, wine is nowhere near my primary source of income- but I refer collections to winebid in my appraisal capacity on occasion based on past personal and client history.

smackdown