Innovation in the traditional wine industry – The ‘Vino-Cap”
Joshua Schmidt, Co-founder of Vinnovate shares the moment where their innovation’s light bulb sparked.
Hi Josh, could you please tell us about Vinnovate?
The origins of Vinnovate come from a story when my brother Simon was on a vacation in Vietnam. He was chatting with a medical professional over dinner who asked about the cause of his reaction when he consumed wine. Simon told him it was likely to be the preservatives. He then had a light-bulb moment knowing that preservatives become redundant at point of consumption, so why not make a functional wine closure that empowers wine drinkers to remove them?
Both Simon and myself are from the Barossa Valley, grew up around wine and have worked in different facets of the wine industry. We worked with the Australian Wine Research Institute, Waite Campus to optimise the treatment of the wine. By working with an accredited research institute it ensured that everything we did was credible. For the purpose of the wine challenge we called it the ‘vino-cap’. ‘Vinum’ is the Latin word for wine. That’s how ‘vinnovate’ came in – vinum + innovate. We are aiming to have the first mass-produced cap ready by mid next year.
What is the market like for your product?
As it turns out, >85% of wine closures in Australia are screw cap, and only a small percentage traditional cork. The design of the vino cap allows it to complement different sized products. In the case of wine bottles, almost all are 750ml. We don’t want to sell the closure by itself to the consumer because one of the benefits of the closure is freedom of creativity and the control that it can afford to the winemaker.
Our goal is to execute a commercial trial in what would be a limited scope, so we’re talking to several parties across different levels – distribution, wine producers and the like.
In terms of raising capital, how were you able to raise funding to bring your prototype to the market quickly?
We’ve been successful on 4 separate occasions in obtaining grants and we were also awarded first place in Pernod Ricard’s Winexplorer challenge in April, 2016. This provided us with consumer validation, and allows us to keep moving forward to commercialisation.
To be successful in the wine industry you need to have a strong understanding of the industry, and understand the different language Winemakers use.
How was your preparation prior to winning Venture catalyst competition?
We brought a consistent marketing message to the Venture Catalyst competition, and it enabled us to be successful. Simon is a skilled technical writer, while I created branding materials and pitches; so we brought together our work for the competition.
For Venture Catalyst we were denied the first time around because we were so focussed on wine and were informed that we should look further and expand our scope. Afterwards, we met several beverage manufacturers and used their feedback to investigate further. We then presented this data to the Venture Catalyst committee. They were very supportive and impressed that we had widened our scope and created more opportunities.
What is your opinion about the wine industry?
Most people are quite sceptical when it comes to innovations in wine. When you talk to wine industry people, it helps to have credibility. Having a winemaker as part of the team certainly helped a lot when discussing the science behind the product.
It’s difficult to create and implement disruptive innovation within the deeply rooted traditions of the wine industry, but I believe the industry has tremendous potential for innovation. For companies who resist innovation in favour of the status quo, just look at the disruption we’re seeing in the taxi and hotel industries these days. They have to be able to look forward and see into the future.
Currently, when people think innovation, many think in terms of apps but we are focussed on providing physical innovation – a value-adding product which differentiates wine products, and has a direct tangible benefit to consumers.
How did your brother Simon and you team up?
We teamed up following Simon’s lightbulb moment, when he called me and said he had an idea, and that we should make a business out of this. Simon has a degree in wine science from Charles Sturt University so he’s been working in the wine industry for quite some time. He took it upon himself to engage in tertiary study and after many years of self-discipline working full-time, he then commenced the UniSA MBA, and that meant we were eligible for the venture catalyst program.
Be coachable, willing to learn, willing to put in some work, and do something you are passion about.
We won it this in 2015, and we complement each other quite well. Simon focuses more on the technical side while I’m able to think more about consumer-focussed marketing and so there’s a great marriage of skills.
What are some of the traits needed to succeed in the wine industry?
To be successful in the wine industry you need to have a strong understanding of the industry, and also understand the different language winemaker’s use. Many people working in the wine industry are highly educated.
Have you got any support from the Australian Government?
We recently received the South Australian Government Micro finance fund. Specific to the wine focus, it allowed Vinnovate to engage with the Australian Wine Research Institute. There are a lot of grants out there and I encourage people to explore what opportunities exist.
There are people in the local government who are employed to bring you up to speed and inform you about these grant programs. The Government wants you to succeed and we’ve had some very positive interactions with the state government in South Australia in particular.
When you talk to wine industry people, it helps to have credibility. Having a winemaker as part of the team certainly helps a lot when discussing the science behind the product.
Where do you see yourself 5 years from now?
Winning the ‘Winexplorer challenge’ helped to validate our concept. It definitely ranks up there and validating it shows that we’re doing the right thing. It also shows that there are people in the industry who are receptive to new ideas and innovations.
We were tweeted by the Premier of South Australia who voted for us in the Winexplorer challenge. I would love to see this as the next generation wine closure as we believe our product achieves all the functions of a screw cap closure, and more.
Do you have any advice for young entrepreneurs?
Certainly be coachable, willing to learn, willing to put in some work, and do something you are passion about.
I recommend a platform called ‘Coursera’, I did a certificate in healthcare and entrepreneurship at Duke University online over eight weeks. Absolutely worth it!
You need to be very fluid, wine’s so fluid (chuckle), even in the business sense as well, you need to be able to adapt depending on the circumstances you’re put in.
To learn more about what Vinnovate does, feel free to visit their website – http://www.vinnovate.com.au or contact Josh directly at firstname.lastname@example.org