July 1, 2020
As the coronavirus pandemic forced bars and restaurants across the country to shut down, Gary Vaynerchuk's Empathy Wines is making a big splash in the online wine business. Now, the startup has been acquired by alcohol giant Constellation Brands.
After just 18 months in production, founder and media personality Vaynerchuk told Cheddar it was the perfect time to sell Empathy.
"The reality is, Constellation's infrastructure allows me to deliver on my dream of making the best $20 wine in the world," he said.
Empathy Wines sold 15,000 cases in its first year, raking in more than $3.5 million. Now it joins an umbrella of brands under Constellation including Corona and Svedka. Robert Hanson, president of wine and spirits at Constellation Brands, said the company wants to capitalize on Empathy's strength in the digital wine sales space.
"Empathy is an incredible brand," he said. "They balance art and science in terms of how they build the brand in the marketplace."
The company's online success is not only attributable to "the deep understanding of how to do marketing in 2020," Vaynerchuk said, but also from his experience understanding customers' wants and needs regarding wines.
"I literally grew up in the wine business and stood on the wine store floor for almost two decades and interacted with people and really just had a real sense of where the palate was these days," he added. As a young man, Vaynerchuk worked in his family's wine shop.
The new deal, according to Hanson, will bring opportunities for both companies to collaborate without impeding Empathy's successful approach to marketing in the digital space.
"We'll keep Empathy as a standalone brand, obviously, to drive the growth that we think is possible with the Empathy Brand specifically. On the same score, leveraging Gary's partnership with me. We've known each other a long time and think quite similarly about business development," he said.
As more states pull back on reopening plans due to a surge in U.S. coronavirus cases, Constellation Brands' priorities remain online, Hanson noted.
"We're very much focused on making sure that we win in digital commerce. That's why this investment with Empathy was so critical," he said.