Wine Australia mentions:
The total sales volume of Australian wine in 2018/19 was just under 1.3 billion litres (144 million 9-litre cases) for $6.36B sales.
https://www.wineaustralia.com/market-insights/australian-wine-production-sales-and-inventoryFrom DW8 presentations the 144M cases per annum in 2018/19 consisted of 70M cases B2B & 12M cases DTC. The remaining 62M cases are export. I have made no allowance in estimates for export cases at this stage.
Allowing for wine industry 5% growth CAGR & 9% growth CAGR for DTC:
2019/20 - 151.2M cases total incl. 13.1M DTC
2020/21 - 158.8M cases total incl. 14.3M DTC
DW8 processed about 25,000 cases in December x 12 = 300,000 cases pa run rate.
Current DW8 market share of total sales = 300,000 / 158.8M = 0.2%.
Current DW8 market share of online & DTC sales = 300,000 / 14.3M = 2.1%.
If we use 300,000 cases pa current run rate & allow for 50% QOQ growth = 1,518,750 cases pa run rate in 12 months from December 2020.
DW8 forecast market share December 2021 = 1,518,750 / 158.8M cases = about 1% of total sales & 1.5M / 14.3M = 10.5% of online/DTC sales.
To estimate revenue for about 1% market share with 1,518,750 cases pa we need to determine the breakdown between wholesale & retail sales. Wholesale sales will attract B2B & logistics revenue whereas DTC/online will attract logistics revenue only.
$2.2B wholesale sales 2018/19 @ 5% CAGR = $2.43B forecast 2020/21 & 77.2M cases pa = $31.48 per case average sale price
$1B DTC/online sales 2018/19 @ 9% CAGR = $1.2B forecast 2020/21 & 14.3M cases pa
$2.43B / $3.63B = 67% wholesale & 33% DTC/online
Cases December 2021 forecast run rate of 1,518,750:
1,518,750 x 67% = 1,017,562 cases wholesale B2B x $31.48 average per case = $32,032,851 GTV x 10% = $3.2M revenue/gross profit
1,518,750 x 33% = 501,188 cases DTC/online x $17.90 per case = $8,971,265 revenue x 20% margin = $1.8M gross profit
TOTAL REVENUE = about $12.2M & $5M gross profit less about $5M DW8 expenses = break even
As it has been calculated on December 2021 run rate the break even should show up in Q3 2021 4C in April 2021.
So it appears about 1% market share is required to break even by December 2021 based on current 50% QOQ growth.
Given that DW8 has about 8 quarters of funds based on the above break even calculations about 4 quarters of funds or circa $4M can be allocated for acquisitions.
WDA cost $600k + shares so feasible to acquire something about 6 times larger with $4M cash.
(20min delay)