Pierre Rogers, the founder and CEO of First Stage Investor holding Yahyn, thinks he’s on to something very big and immensely disruptive.
He thinks it will upend America’s incredibly convoluted alcoholic beverage industry. It should make life much better for consumers and vineyards alike.
With its cool AI capabilities, Yahyn is already in the business of connecting wine drinkers to bottles they love. And consumers are showing their appreciation by turning to Yahyn in growing numbers.
Onboarding more vineyards… offering more bottles… and gaining more customers are all signs that Yahyn is on the right track. It took a lot of hard work. But if Pierre is right about his newest idea, this is just the beginning.
The idea took root from Pierre’s desire to help not only U.S. vineyards but also foreign ones. He correctly points out that it’s even more difficult for foreign vineyards to sell their wine in the U.S. than it is for their American counterparts.
First, they have to convince a major U.S. distributor to buy their wine — no easy task from a long distance. And thanks to this country’s regulations on alcohol distribution, this step also keeps foreign wineries at arm’s length from their American consumers.
Once the wine clears U.S. Customs, it no longer belongs to the vineyard that produced it. Ownership passes to the U.S. distributor. In Pierre’s words, “Foreign wineries sell wine for $2.50 a bottle to the distributors and consumers pay $40.”
That’s America’s three-tier system in action. From the winery (first tier), bottles must pass through the distributor (second tier) to the local retailer (third tier) before finally reaching the consumer. For foreign wineries, it’s really a four-tier system when you add Customs to the mix.
Pierre thinks this is ridiculous. In a flash of inspiration, he wondered if it were possible to somehow consolidate the three tiers into one. Fewer middlemen would mean fewer markups. Bottles could still be cheaper for consumers while foreign wineries capture the bulk of the markups that typically go to intermediaries.
But how? Surely if it were possible, it would have been done by now.
But Pierre is a startup founder and no respecter of the status quo. He came up with a work-around that passes legal muster.
Foreign wineries can sidestep the dreaded four-tier system by not selling into the U.S. Instead, they ship their product over here to put it in storage. They consign the wine, in other words. And once it sells, Yahyn as the distributor takes possession and ships the wine to the customer at a modest markup. The customer pays up to 50% less. The foreign wine producer sells their bottles for five to 10 times more. And Yahyn makes a modest markup.
The first countries lined up to take advantage of Yahyn’s brilliant work-around are Chile and Argentina. They’ll each be making monthly payments to Yahyn totaling in the six-figure range.
It’s been a long time since I’ve seen something this disruptive in the alcoholic beverage space. Pierre calls it a “fundamental shift in how wine is distributed.” Founders are sometimes guilty of overstating these kinds of things. But if anything, Pierre is downplaying the ramifications of what Yahyn is doing. It could be game-changing for the alcohol industry. And investors in Yahyn should note that it could also propel the company into a much steeper growth and profit trajectory.
It’s important. And it’s something you can’t find on Yahyn’s raise page.
Pierre understands he can’t let this opportunity slip from his grasp. The next few months will go a long way in determining Yahyn’s fate. It needs to act with some urgency. That’s why Yahyn is once again fundraising on Netcapital. It’s raising at a valuation of $10 million. When I first presented Yahyn to First Stage Investor subscribers about 16 months ago, its valuation was $5 million. If you invested then, you’re up 100% on your investment.
You can find more updated information on Yahyn’s raise page. It explains how the pandemic has been good to the company. Customers spending less time at stores (and tasting rooms) and more time on their devices shopping for food, drinks and goods has made Yahyn more attractive to vineyards and retailers. The company has signed 50 merchants onto its system. And it has 1,700 more in the queue! The market is clearly playing to Yahyn’s strengths.
Yahyn wants to source wine from 200 merchants by the end of the year. Which is yet another reason why it’s going after more funding on Netcapital. The understanding of what needs to be done is there. The missing piece is money. The Netcapital raise will hopefully take care of that.