Direct sales offer wineries higher profit margins because they cut out the government middle man. But they are also key in spreading the kind of word-of-mouth brand recognition that can help a small winery catch the eye of a provincial liquor board. For that, wineries have been turning to wine clubs that offer regular shipments of exclusive products to their members for a yearly membership fee.
But the bulk of the Calgary-based company’s business is selling e-commerce software to wineries and wine clubs, and for that, CEO Matthew Protti says the most lucrative markets aren’t in Canada at all. Its customers are in places like Australia, New Zealand and Hong Kong, which have booming wine industries and few regulations. Canadian wine clubs now make up a third of BlackSquare business; Protti says he expects that to fall to a fifth within a year.