Neha Kumar is the cofounder and COO of Full Glass Wine Co., a direct-to-consumer wine retailer that owns brands like Winc and Splash Wines. In an interview with ForbesWomen editor Maggie McGrath, Kumar talks about her company's two newest acquisitions and how--despite not having a background in wine--she came to run a digital wine seller.
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LifestyleTranscript
00:00Hi everyone, I'm Maggie McGrath, editor of Forbes Women, here at Nasdaq MarketSite.
00:08The global wine industry is estimated at $330 billion, and sitting at the center of it is
00:15Neha Kumar.
00:16She's a co-founder and COO of Full Glass Wine, and they have some news that they are sharing
00:21exclusively with Forbes right now.
00:23Neha, thank you so much for being here.
00:25Thank you for having me.
00:26Before we get to the news, just to set the stage for someone who hasn't heard of Full
00:30Glass Wine, what is it?
00:32So we're a direct-to-consumer brand acquisition management firm, and so we started this business
00:38about a year and a half or so ago, and we ended up acquiring a series of businesses
00:43under one roof, all direct-to-consumer wine.
00:46What are the businesses that existed before what you're about to announce?
00:51So we had Wink, which we acquired in June of last year.
00:54The second one was Wine Insiders, which we acquired in October of last year.
00:58Then after that, we got a company called Splash and Bright Cellars.
01:03And what is the news you're announcing today?
01:05So the news that we're announcing today is we obviously brought on Splash, and then also
01:09Scout and Cellar, which we're very excited about.
01:12And what is the difference between all of these brands, and how does it create a cohesive
01:16company for you?
01:17So the difference between the brands is essentially each one of these has a very specific type
01:22of consumer demographic.
01:25And so for us, what we wanted to do was put together a series of companies which have
01:29something wonderful.
01:30Each one of them have something that is great, but they might have needed a little bit of
01:34love in some area.
01:35And our area of expertise is operations and finance, and putting them in one platform
01:40has been really great.
01:42But what we're really looking to do is to get through the whole entire customer lifecycle.
01:46So let's say you come in, and you look at some wines, and you say, I want to try these
01:50out for fun, but I want to maybe learn a little bit more, and maybe I want to try some
01:54wines from all over the world.
01:55Now Wine Insiders is the one that you could do, but you want to buy something that's transactional.
02:00Maybe a next step is you want to do something that is subscription.
02:02So now we have a different type of a product that you can grow into.
02:06Where does Splash, and where does Scout and Cellar fit into that wine consumer journey?
02:11You just kind of described the beginning stages of that.
02:14Are these for the more advanced consumers, those who might have a PhD in wine?
02:18We really are looking to fulfill the needs of aspirational wine drinkers.
02:22So people who might have a little bit of understanding, but they want to learn more.
02:26So Splash is a great example, because Splash really is a value-driven wine.
02:31So people are looking to buy bulk wine.
02:34You're looking at 15 packs, and even 18 packs.
02:38And then Scout and Cellar is going to be people that are a little bit on the higher-end side,
02:42and they want someone to tell them what are the right kinds of wines that you should take on.
02:47Now, we've talked before about consumer trends in wine, and also direct-to-consumer trends in wine.
02:54And one of the things I had asked you was, of course, all of us were buying wine online during the pandemic.
02:59We weren't leaving our houses.
03:00But where does the state of direct-to-consumer stand in 2024?
03:05And you had something interesting to say, because you said there are a lot of skeptics.
03:08There are people who say that direct-to-consumer isn't going anywhere.
03:10But where are we now with direct-to-consumer and the wine industry?
03:14Yeah, we'll do direct-to-consumer first.
03:16A lot of people say that—I have people who've told me e-commerce is dead.
03:20Forget even direct-to-consumer, they say e-commerce is dead.
03:23The thing that's interesting is that if you look at a long enough time horizon,
03:27e-commerce is trending up and direct-to-consumer is still trending up, right?
03:31But during 2020 and 2021, obviously, there was going to be a very large blip,
03:36and then things were going to go down from there.
03:38A lot of people, when you were looking at the numbers, if you're looking at a forecast,
03:42they would take 2020, 2021, and they extrapolated it out.
03:46Now, I won't name any necessary companies, but there's a good number of companies
03:50that did it in other spaces during that time as well.
03:54So it's still going up, but it's just not going to be going up to those levels
03:58that you saw during the pandemic.
04:00So the better baseline is that 2017, 18, 19?
04:04Correct. Correct.
04:06And what else are you learning about the state of direct-to-consumer
04:09as it relates to wine and spirits through Full Glass?
04:12Absolutely. So customer acquisition costs are constantly changing.
04:17The algorithms that you're seeing online are really in an interesting kind of state of flux.
04:21And then with the election around the corner, it's definitely there.
04:25That's one of the reasons we were really excited about Scout & Seller
04:28because Scout & Seller also has a direct-selling model.
04:31And so it hedges our bets a bit when it comes to the customer acquisition costs
04:35for selling product online.
04:37And how does this acquisition fit into the broader theme of D2C acquisitions we've seen in 2024?
04:44You said to me before we started recording, there's kind of a business trend here overall
04:48that's not just concentrated in wine.
04:50Correct. And I'm going to take it back a little bit.
04:53So if you look at the interest rates that were everything that was going on with them in 2020, 2021,
04:58they were lower than we've ever seen, right?
05:01Everybody knows that. That's no new news.
05:03But when interest rates are so low, there's so much money that's fluxed in the economy.
05:07When there's so much money that's moving around, everybody has more money to spend.
05:11We saw labor rates were going up.
05:13We saw the unemployment rate was very, very low, right?
05:16So it was good from that standpoint.
05:19But it was one of the things that the Federal Reserve really had to focus their attention on
05:23because we had a global pandemic.
05:25So it was a consequence of the global pandemic.
05:27Now what we're seeing is over the past year and a half, two years,
05:31all the money that funds were spending across the board has been cut back.
05:34It's for venture and then also for private equity.
05:37A lot of that has been cut back.
05:39So the job market's been going back to, you know, a little bit different levels
05:43from what we saw before the pandemic.
05:45And so less and less capital is being spent.
05:47So a lot of the companies that are out there now,
05:50they're trying to find ways to make ends meet when it comes to cash flowing the business.
05:55Now, there's multiple other industries.
05:58And I know when I'd say the holiday time last year in 2023,
06:02we started to see a lot of, and I'm sure you saw them as well, right?
06:05A lot of the beauty companies were doing consolidations.
06:09So we've already been seeing that and we're going to continue to see that
06:12in other direct-to-consumer categories across the board.
06:17It's interesting too. I think there have been fewer exits this year.
06:20PitchBook had a report saying that funding of VC firms is at a near 10-year low
06:25because there've been fewer exits.
06:27So LPs are holding on to their cash.
06:29What does your acquisition right now mean in the context of all of that?
06:34What do you think?
06:35So we're, first of all, we're the new benchmark now.
06:39So when we're looking at, you know, what direct-to-consumer wine companies should go for,
06:43we're the ones kind of setting the stage.
06:44So it's interesting.
06:46But I think a lot of what we're doing here and how it goes in the context of the greater M&A type of space
06:52is it truly is we're doing what I would consider market arbitrage, right?
06:56And so we're taking a lot of various companies across the board.
06:59If I would have bought those companies three years ago, I would have been buying them at an ultra-premium.
07:04But I have the ability right now to go out there and get the companies at a relatively good price,
07:10put them together under one roof, and then operate them efficiently.
07:14And so time will tell.
07:15But, you know, things have been looking very good for us so far.
07:19And we'll see what happens in the next two to three years.
07:21Now, you are a seasoned business executive who was not necessarily someone who started her career in alcohol.
07:28How did you get to this point?
07:29Take us through some of the key moments.
07:32You know, it's interesting.
07:33I think as long as you put yourself out there and you keep going for whatever gets you excited
07:41and you're really passionate about, it's interesting to kind of see what happens in life.
07:45But I teach managerial accounting and I teach entrepreneurial accounting and finance at UCLA.
07:52And I was teaching managerial accounting for such a long time.
07:54And one of the things with managerial is that you're looking at the operations of products.
07:59And I never had worked.
08:00I was in banking before after graduate school.
08:03I went to UCLA for undergrad, went to the dark side, went to USC, which is a phenomenal school.
08:09And I got my MBA over there.
08:10After that, I went to Bank of America.
08:13And so, you know, when I was teaching managerial, I really needed to have the expertise in my mind
08:18to be able to tell the students of what it looks like when you have a physical product.
08:22You know, through some friends, an opportunity came up at a direct-to-consumer wine company.
08:26And I thought this could be very great for me to work here for a period of time.
08:30This is about seven, eight years ago.
08:32And so I worked there for a couple years, but I really got to learn operations, how 3PLs work,
08:38how you're dealing with cogs and shipping.
08:40And that for me, it really was, it gave me the ability to be able to, you know,
08:46practice what I preach type of a deal.
08:47So when I'm talking to my students in class, I really understood unit economics
08:52and how everything actually worked with a physical product and, you know, logistics delays.
08:56So that's how I fell into wine.
08:58It's kind of funny how one thing leads to another.
09:02And so after that, I ended up going to another company called Create & Cultivate.
09:07Some of my family friends were shareholders at the company, and they wanted to get the company
09:12to have an exit within the next couple years.
09:15So they brought me on board to scale and get the company sold.
09:18So we sold the company in 2021.
09:22And so it's been an interesting ride.
09:24It's been an interesting ride because Create & Cultivate does live events.
09:27And so 2021, we were still in the thick of the pandemic.
09:30You joked that it's like the beginning of a horror story.
09:33You take a job with a live events company as a global pandemic is shutting everything down.
09:38Yes, I felt like it.
09:40I remember when the news was coming out and the borders were closed, I felt like I was in an HBS case.
09:45And it was Neha Kumar staring out the window wondering where she went wrong, right?
09:50Of course, I joined an events company in a global pandemic where it passes when people are there via breathing.
09:56So it was very interesting.
09:58But the funny part is that our margins actually went up substantially because of the pandemic.
10:05So we had started to build out the year before a digital platform.
10:10And it was very serendipitous.
10:11And sometimes it's just timing in life.
10:14And so we started to build out the infrastructure in place.
10:17And so when the pandemic actually hit, there was a lot of appetite for digital assets.
10:22And so our margins went very, very high.
10:25And so it worked out well for us.
10:26And then I'm sure there were learnings.
10:28Obviously, wine and live events are different, but also same.
10:31You have wine at some live events.
10:33But I'm sure there are learnings in building out a digital platform.
10:36And then what you're doing with full glass, right?
10:39You have subscription.
10:40You have online community in some cases because people are learning.
10:43Yes.
10:44What's the through line that you see?
10:46I really look at it as running a business operationally efficiently.
10:51And that is the biggest thing.
10:53How are the employees placed?
10:54What is the org chart?
10:55What is the purpose of what you're trying to achieve here?
10:59How do you make sure that the company can get to a place if they're not already to get them to be profitable?
11:04Those are the key things that I think people need to focus in on.
11:07It truly is running a business, right?
11:09One happens to be event.
11:11One happens to be wine.
11:12Could there be something that's different in the mix?
11:14Absolutely.
11:15But it kind of comes back to a lot of the things that I teach with my class.
11:19It's how do you actually run a business efficiently, properly?
11:23And this is the thing that I think a lot of people have forgotten over the years.
11:27But really, the company needs to make money.
11:30The company needs to make money.
11:33That is a good point and brings me to a question about your revenue.
11:37Splash, Scout & Cellar, with the existing brands, puts you on track for what amount of revenue this year?
11:43$125 million.
11:45And are you projecting 2025 numbers yet?
11:48We are.
11:49So we'll be sitting at around, projected right now, $185 million.
11:53And is that including, are you looking at other acquisitions?
11:56Or are you going to sit tight with five main companies within full glass wine?
12:01So we are what I would really consider as opportunist individuals.
12:06And so if a good opportunity comes our way, then we would absolutely look at it.
12:12But at this point in time, the projections that I gave you right now are with the existing brands that we have and these two new companies that we acquired.
12:18The last time we spoke, you said to me that you want to be a one-stop shop for all things wine.
12:26How close are you to achieving that vision, would you say?
12:29I'd say we're making a lot of great strides and we've been around for 14 months.
12:34So I think we're in a pretty good spot at this point.
12:37That's pretty fast growth.
12:38How are you managing that?
12:40Because adding a new brand completely can change things.
12:43It can.
12:45The number one biggest thing is to be very clear on what we're trying to achieve.
12:49And the number two one is to have the good people around you.
12:51We couldn't do this without our team.
12:55Now, speaking of your team, your team told me that just 4% of C-Suite leaders in wine and spirits are women of color.
13:04How often do you think about those statistics?
13:06Is it noise or do you feel it on a day-to-day?
13:10You know, I do feel it on a day-to-day basis and it gives me a sense of encouragement and empowerment.
13:17I have, as you know, I have a daughter.
13:20She's three and a half years old.
13:21And I want her to grow into a world where she gets to see her mom do all these great, amazing things.
13:27And honestly, that's all she knows then, right?
13:30I was pregnant with her when we sold Create and Cultivate.
13:33I literally went through diligence while I had her.
13:37And now she gets to see me, you know, doing all of these amazing things.
13:42And what we do and how we be creates the world around us.
13:46And so that's very important to me.
13:48But I do see it and I do feel it on a very regular basis.
13:53Is it changing?
13:56I don't know if it's changing as fast as I would like, especially in this industry.
14:02But I think the more that I do and the more that I step up and the more that I take a stand for myself,
14:08I do think it makes a very big impact to the generations to come.
14:12Speaking of making an impact on generations to come, you obviously have the UCLA class.
14:17And we've spoken about the efforts that you have made to teach women about investing.
14:21And specifically this year, you've been talking a lot about investing in women in sports.
14:25So it's September. We're on the other side of the Olympics.
14:28Talk to me about the opportunity that you've seen there and the interest you're seeing from women investing in these areas.
14:35Oh, absolutely. I love this topic.
14:37Right. So I work over with a group of women called the Women's Abundance Collective.
14:42And so we teach accredited women investors how to look at deals.
14:46How did you diligence and really want to encourage them to invest?
14:50One of the areas that we're seeing so much growth in is women's sports.
14:54Women's sports is a phenomenal asset class on its own and a great place, I think, for a lot of people to really put capital towards.
15:03There's so much room for growth. Anytime you're looking at deals, you always want to.
15:07It sounds so simple, but you want to buy low, sell high.
15:12And I really think that women's sports, even though they're getting a lot of awareness at this point in time, they're highly undervalued.
15:19And so as someone making investments, this is a great place to put capital into at this time.
15:25When you think about how social media is done, so much of social is women on social.
15:33And there is so much room there.
15:35If you look at the number of followers, a lot of these women's sports players have people looking at their attire, everything else going on with that.
15:43You even just look at Caitlin with Prada, right, and what was done during the draft picks.
15:49These are new things that we've never seen before.
15:52And we're going to continue to see a lot of these things.
15:55Angel City has done a phenomenal job.
15:58Huge investment we saw earlier this summer.
16:01I think it was record breaking.
16:03What's your next step in this?
16:05Are you going to continue to teach?
16:07Are you going to invest yourself?
16:10Or what's the 2025 thesis for the women in sports piece of your career?
16:14Both.
16:15Right.
16:16And so I'm going to continue to invest.
16:18I'm going to continue to teach and spread the word and also just create awareness as much as I can around it, because I think it is a great place for investment and also just a great fun thing for people to be involved in.
16:31And then for the wine side of your career, full glass wines, we talked a little bit about the revenue and your revenue projections, but what else are you looking at in the next six to 12 months?
16:40What are the strategic priorities you have?
16:42You know, our biggest goal really is to focus on the consumer and to make sure that their process is as seamless as possible during this transition.
16:50Ideally, it doesn't even occur to them as if there's a change.
16:53Right.
16:54But for us, it truly is.
16:55There's a lot of the customers with and I'm not sure how much we want to segue into this, but when you're looking at AI, right, so a lot of it has to do with how they're picking their wines and how we start to take their wine preferences and we start to modify it when they're telling us they like this type of a varietal or this didn't work for them.
17:16AI has a large part to play in this.
17:19And I think for us over the next one to two years, it's going to be a very exciting journey seeing the acceleration of how we can help people choose their wines as they go through this journey.
17:30Interesting.
17:31I do want to go into this a little bit because as someone who loves wine and someone who trusts sommeliers, I don't know if I trust AI to give me the best recommendation.
17:42So how are you incorporating this?
17:44Because obviously it can help streamline the business.
17:46It can help you scale full glass wines, portfolio brands.
17:51But then can AI pass the SOM test?
17:54It's somewhat, well, first of all, and just to be very clear, I don't know if a lot of our current consumers are utilizing SOMs to purchase wine.
18:05Right. So that's the first thing.
18:07So it's who is your target demographic of what you're going after.
18:09Right. That's the first part.
18:11The second thing is it's almost like saying when you're looking at ice cream, are there not a few core common ice cream flavors?
18:17Aren't there ice cream aficionados right out there who say, I don't know if anyone's going to know what flavor I like.
18:22But there are. Right.
18:23You have mint chip, you have strawberry and you have vanilla.
18:27And so it's very similar from that standpoint as well.
18:30It's so interesting to hear you talk about wine.
18:32And there's a way to make it super specific.
18:35But I don't know if it's the UCLA part of you, but you're able to broaden it out.
18:39And it almost sounds like any other product.
18:44Every product is unique in its own way, for sure.
18:47Having said that, when you are looking at any of these things from a macroeconomic theory standpoint, if you're looking at a large enough sample demographic, you are going to see trends.
18:57And that's where data plays such a big role into this.
19:00So everyone wants to we all want to think that our preferences are individualistic and they are.
19:06Right. But with algorithms using like AI algorithms, you have the ability to at an accelerated rate come up with better recommendations.
19:15And that's where it's phenomenal.
19:18And again, I'm very excited for the next about two years or so, because the journey that we're going to be able to take our consumers on is going to be absolutely amazing.
19:25Well, I look forward to having you back again in a year or less to tell us more about that journey.
19:31But in the meantime, thank you so much for sharing this news with us.
19:34Thank you for having me.
19:35Neha Kumar, thank you for joining us at Nasdaq MarketSight.