The King of Online Wine
Originally published in Northwest Palate
May-June 2002

Mike Osborn readily admits he's a computer guy first and a wine guy second. But that doesn't mean he doesn't love pulling corks. At the Portland headquarters of eVineyard--now the nation's largest online wine retailer after its 2001 acquisition of wine.com-- bottles of red and white wine sit just a few inches away from the water cooler and coffee pot.

"It's a lifetime of learning," says eVineyard's 33-year-old founder and vice president of sales and technology. "I'll know more about wine six months from now than I do now, and I want that process to continue for the rest of my life. I think that makes me a lot like our customers."

Although approximately 80% of America's wine consumers are over 50, Osborn believes there's an ever-growing market of younger people who are eager to learn about wine but feel cowed by the purchase process. "Ordering wine in a restaurant or even a grocery store can be a highly intimidating experience," Osborn says. "You're faced with hundreds of products and very little information to base your decision on. And you don't want to ask a lot of questions for fear of looking ignorant. Selling wine online allows us to marry content, in other words bottles and cases of wine for sale, with information about what you're buying. Internet technology is the means by which you can demystify wine."

The website (accessible at either www.wine.com or www.evineyard.com) lives up to that premise. A well-organized database quickly links you to whatever you're searching for, whether it's a particular winery, varietal, region, or price range. In seconds, you can access the site's complete list of, say, Oregon wines and even sort them by wine-industry ratings, if you like. (Editor's note: The site comes up short on Canadian wines--only four, all from one producer. We also found the purchase process a bit confusing. But the Washington wine we ordered was reasonably priced, arrived promptly, and came properly packaged.)"

The marriage of wine with Internet technology seems Osborn's birthright. While growing up in Southern Oregon, he often vacationed in California's Napa and Sonoma regions with his family. Osborn's father was born in Vallejo, California, and some of Mike's earliest memories are of touring the vast vineyards there. For most of his life, however, it was switchboards and software interfaces Osborn found most intoxicating. "I was into capitalism from a young age," he laughs. "While friends worked at McDonald's or at the local supermarket, I sold microcomputers and wrote software."

After graduating from high school in 1987, Osborn enrolled at Portland State University, but soon dropped out to start a business teaching software engineers about relational databases. That business was so successful that Osborn and his wife-to-be began taking lots of three and four-day weekends to his viticultural stomping grounds in Northern California, as well as the burgeoning community of wineries a short drive away in Oregon and Washington. "It gave us a lot of time to learn about wine," he recalls. "Before long, it was a huge part of our lifestyle." In 1994, Mike and Debra Osborn were married on the grounds of Rex Hill Vineyards in Oregon's Willamette Valley.

In 1997, a few years after selling his company, Osborn found himself working with Intel to roll out a software program called Pandesic, designed to help retailers connect their web pages directly to their inventories and operational systems. With the dot.com revolution still in its infancy, however, Osborn decided to become his own client.

In December 1998, the month eVineyard shipped its first order of wine, Osborn's site was a second-fiddle competitor to the larger, more aggressive wine.com. Ultimately, however, eVineyard's way of doing business carried the day. While wine.com had acted as a liaison between its website visitors and pre-existing retailers around the nation, eVineyard established its own warehouses across the U.S. This business model proved to be both more efficient and better adapted to the existing "three-tier" system of wine distribution in the U.S.

As a result, and after its own site's 1,000% growth rate in 2000 brought it an infusion of capital, eVineyard snatched up its larger competitor in April 2001 and relaunched the site under the moniker "wine.com by eVineyard." Since then the company has grown by leaps and bounds. "Overnight our sales quadrupled and have steadily been growing since," says Osborn.

Today, wine.com by eVineyard sells wine in 27 states and Japan, representing over 75% of the domestic market for off-premise wine sales, including each of the top ten U.S. wine markets. But despite the ever-increasing reach of his online company, Osborn asserts that the company's Oregon roots are still important. "We do try to be great stewards of Northwest wines," he says. "We feel we're part of the local wine industry. In that way, even though our business has a national presence, we're proud to be somewhat provincial."

Oregon and Washington wineries now represent about 12% of the site's sales in the Northwest and about 5% nationwide. California wineries account for approximately 44% of the site's national sales. Osborn says the two largest Washington wineries, Columbia Crest and Chateau St. Michelle, do very well on the site, while vintages from Willamette Valley and to a lesser extent other Northwest appellations are reaching cult status. "Single-vineyard wines are particularly an Oregon phenomenon that the wine world is excited about," he says. "People are really seeking these products out." (Our site search turned up an array of Oregon single-vineyard offerings from Adelsheim, Archery Summit, Panther Creek, Rex Hill, and Sokol Blosser.)

More comfortable behind a desktop than under the spotlight, Osborn would always rather talk about his business than himself, but when asked for a personal favorite, he unequivocally chooses Pinot Noir. "Without a doubt," he says. "Of course Pinot Noir varies widely among producers, but with three awesome vintages in a row, it's hard to argue against that varietal right now." He also confesses to a soft spot for Zinfandel, and attests that Müller-Thurgau goes surprisingly well with spicy food. Eager to explore European vintages, Osborn and his wife scheduled a wine tour of Tuscany but had to cancel it in the wake of September 11. "But we definitely will get there," he says.

Meanwhile, the fresh-faced tycoon intends to ensure that eVineyard keeps thriving in an age when the bottle has gone empty on many a dot.com business. "Wine is a lifestyle, but a lot of people need help breaking down those barriers to make buying and drinking less intimidating," says Osborn. "And that's precisely what we have in mind."

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