I was looking for an equity crowdfunding campaign to evaluate for InvestorPlace when I came across GrapeStars, an investment offering made available by the equity crowdfunding portal, Republic. The marketplace offers more than 350 celebrity brands to buy. It’s one of several reasons why you might want to invest in GrapeStars.
Let me tell you why I feel this way.
It’s Got an App
I know what you’re thinking — who doesn’t? True enough.
However, to get an idea of what makes GrapeStars tick, I downloaded the app onto my phone, searching for a celebrity white wine that I’d drink. A product from a person who I believe has the character and integrity to genuinely care about how the wine tastes.
I came up with a wine made at Gordon Sumner’s (Sting’s birth name) Villa Il Palagio estate in the Tuscan countryside south of Florence in Italy. Called Roxanne Bianco, it is made 100% from the Vermentino grape.
GrapeStars states about the wine:
“Straw yellow with greenish reflections. Delicate profile, floral with notes of citrus, a hint of pineapple and banana. Fresh taste, pleasantly acidic with a long finish. This light, refreshing Bianco Toscano, is a versatile and very drinkable wine to complement many dishes and to capture the heart. Ideal as an aperitif or to accompany fish and vegetables.”
Retailing for $22.99, the “drinkable wine” comment has me very intrigued.
There’s a Big Market for Online Alcohol Sales
As GrapeStars notes on its campaign page, online alcohol sales in the U.S. increased by 243% during the pandemic. It got that stat from an April 2 MarketWatch article about the surge in sales. My guess is this phenomenon will continue post-Covid 19.
“Spirits like tequila, gin and pre-mixed cocktails led the way, with sales jumping 75% compared to the same period last year. Wine sales were up 66% while beer sales rose 42%. And online sales far outpaced in-store sales,” MarketWatch reported.
Part of the explanation for the surge was people buying in bulk to tide themselves over during stay-at-home orders. However, Nielsen reports that June online sales were still three times higher than a year ago, evidence that while sales are slowly returning to pre-Covid levels, online sales appear to have found some new customers as a result of the pandemic.
The beauty of GrapeStars is that it brings together a direct-to-consumer online alcohol sales platform, consumer-driven reviews, and exclusive celebrity content and products. By hitting the sweet spot between all three, it hopes to generate $100 million in sales within the next five years.
The Third Reason to Invest in GrapeStars
Unless you live under a rock, at one time or another, you’ve been taken by an article or press release about a celebrity’s new wine or beer. I can remember when Australian golfer Greg Norman brought out his wine brand. Golfers weren’t the only ones interested in trying his products.
People love celebrity-driven products, and the numbers don’t lie.
According to Forbes, the 100-top grossing U.S. celebrities pulled in $5.1 billion from product sales and endorsements. Not only that, over the past five years, the celebrity endorsement market grew by 7.8% annually.
One only needs to read about the successes of the Kardashian family to know that celebrity pays. George Clooney made multi-millions from the sale of his stake in Casamigos Tequila. The list goes on.
GrapeStars makes a 15% commission on sales on its platform. So, in the case of Sting’s wine, it would make $3.45 per bottle sold. To get to $100 million in sales, it would have to generate $667 million in sales on the GrapeStars app.
It’s a tall order, but one that can be accomplished with the help of more celebrity products and a more significant move to online alcohol sales.
To date, GrapeStars has raised $63,089, or 252% of its minimum goal of $25,000. The maximum investment it intends to raise is $500,000. The deadline for investing is September 19, 2020. The minimum, a very reasonable $100.
If you believe in the idea of celebrity products, GrapeStars is worth a closer look.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.