Wine tech startup takes next step towards commercialization

BarrelWise, a winemaking technology startup that emerged out of an MBA course at the UBC Sauder School of Business, has entered Creative Destruction Lab (CDL) — a mentorship program that helps ventures accelerate their trajectory and scale ambitious tech-based businesses.

Anchored to UBC Sauder, CDL-West is part of an international network spread across Canada and the United Kingdom, with plans of expanding into Europe and the United States.

BarrelWise helps winemakers become more efficient by streamlining routine processes of caring for barrel-ageing wine. It uses smart technology to cost-effectively assess the health of the wine in all barrels, preventing the risks of spoilage or quality degradation.

During the wine ageing process, five to 10 per cent of the liquid is lost annually due to evaporation. The resulting empty space at the top of the oak barrel can facilitate the growth of bacteria and deteriorate the quality of wine. Rigorous and timely assessment of wine quality is imperative, and testing one barrel at a time can be a labour and cost-intensive process. Currently, winemakers rely on random sampling and approximation when determining wine health. Problems with individual barrels are often not spotted until it is too late.

BarrelWise steps in by using a combination of hardware tools and smart technology to sample wine from multiple barrels at a time and assess key wine health parameters, such as free sulfur.

By becoming part of CDL-West, the company has gained access to its mentor community, experienced entrepreneurs, technologists and investors who have expertise across a wide range of technologies and industries. Interactions with the CDL Mentor helps participating ventures like BarrelWise to focus on achieving near-term milestones, that in turn help to de-risk and accelerate their path to becoming commercially viable.

Jason Sparrow, BarrelWise co-founder and alum of UBC Sauder’s Master of Business Administration (MBA) program, says getting into CDL-West is crucial for catapulting the company to the next stages of success.

"We knew that the mentors [at CDL-West] would help give us perspective on how to take our idea and turn it into a much bigger business," says Sparrow. "So far we've had just one session, but the mentors have lived up to those expectations."

Artem Bocharov, co-founder of BarrelWise and Sparrow's classmate in the MBA program, echoes this excitement.

"It's amazing to have the opportunity to present your ideas to extremely experienced and successful people. Being able to get their input on the future of our business and what it would take to achieve that future is really valuable for us," says Bocharov.

The empty space at the top of a barrel, caused by evaporation, can facilitate the growth of bacteria and deteriorate the quality of wine. This is where BarrelWise steps in — by enabling rigorous and timely assessment of wine quality with smart technology and minimal labour costs.

No mean feat

CDL-West is rigorous and demanding. Participating startups like BarrelWise attend five half-day sessions over a period of nine months. During this time, CDL-West's mentors help the company set measurable objectives and shape their future.

At each session, venture founders provide updates on their progress against predetermined objectives and other relevant milestones. They then re-engage with the mentor community to discuss the challenges they are working on as well as to define the next set of objectives.

Eli Berenbeim, Director of CDL-West, says these sessions are similar to a group board meeting with multiple companies, and that the work of venture founders goes beyond these sessions.

“In between the sessions, venture participants work towards achieving the agreed upon objectives and do so with the support of one to three CDL Mentors who have opted-in — they commit their time over the eight-week sprint leading into the next CDL Session,” explains Berenbeim.

Getting into CDL-West is no mean feat, as program managers screen venture teams so they pass the “fit criteria” — the teams should have a high degree of technical expertise, the venture products are enabled by novel and defensible technology and the market they cater to should support massive scalability.

Berenbeim says the program vetted 285 applications and only 50 ventures were accepted to participate in the 2019 cohort.

BarrelWise beat the odds and was determined to be a good ‘fit’ for the program amongst a competitive applicant pool.

BarrelWise uses a combination of hardware tools and smart technology to sample wine from multiple barrels at a time and assess key wine health parameters, such as free sulfur. This process is critical to maintaining the health of the wine, and breaks away from the traditional and labour-intensive process of sampling wine manually.

Emerging out of UBC Sauder

Looking back, BarrelWise showed its potential well before enrolling in CDL-West. In 2017, a team of students first pitched the idea at the technology entrepreneurship class at UBC Sauder. The founding team comprised of MBA aspirants Jason Sparrow, Artem Bocharov and Nanette Anzola, as well as David Sommer and Miayan Yeremi who were both pursuing their PhD in Mechanical Engineering at UBC.

The idea came from UBC Sauder MBA student Nanette Anzola who observed a recurrent complaint when she worked at a rum-producing company. After opening a barrel of rum at the end of its ageing period, producers would find that a significant portion of the liquid had evaporated. And producers would have to manually repeat this process — called "tapping" — for each individual barrel.

"She [Anzola] thought, ‘What if we could have some kind of sensor that measures key parameters of the rum with the barrel being closed, so the producer can better understand what's going to happen at the end?’" recounts Bocharov.

With that challenge, and after listening to numerous first-hand accounts from wine producers, BarrelWise was born.

Paul Cubbon, Assistant Dean of Innovation at UBC Sauder, taught the technology entrepreneurship class — along with UBC Sauder Lecturer David (DJ) Miller – where the idea for BarrelWise was first introduced. The class facilitates interdisciplinary teams, comprising of business students and students from other STEM subjects, including engineering.

Cubbon says the BarrelWise team took their business aspirations beyond the scope of the class and showed early signs that their idea could become a real business venture. They worked with UBC's startup ecosystem and mentors — such as entrepreneurship@UBC  and its accelerator program “HATCH” — to refine its commercial aspects, build the technology and craft a product prototype.

"Until two years ago they hadn't met each other, and now they've learned the skills and met people to be able to find a market opportunity and then design something that's technically differentiated," says Cubbon.

"The big question is — can they turn this into an ongoing, viable and scalable business that could be used by wineries around the world?"

Entering CDL-West is no mean feat. The mentorship program vetted 285 applications and only 50 ventures were accepted to participate in the 2019 cohort.

Building a strong foundation

BarrelWise is steadily answering that question. The startup is working with a number of wineries and running pilot operations to test their technology. Being part of CDL-West will also help the team strengthen their business model and financing strategy as they market their technology and generate a reliable revenue stream, which further attracts investors.

Sparrow says the lessons learned at UBC Sauder has helped the company build a strong foundation as they head into the next phase with CDL-West.

"We learned a great deal through our MBA courses — like ‘Entrepreneurial Financing’ and ‘Growing and Exiting a Venture,’” says Sparrow. "The faculty has been amazingly supportive. Whenever we need advice — be it from Paul Cubbon or any other faculty — they're always willing to sit down with us and give us some perspective."

When it comes to advice, Cubbon emphasizes the need for a sense of urgency in today’s highly competitive market.

"I'd say be ambitious in this next phase. Because in most competitive environments there is a narrow window of opportunity. And if they are onto something with their business venture, then somebody else will come in to compete with them," says Cubbon. "A lot of it is about ambition and speed of growth."

In other words, Cubbon's message to the BarrelWise team is: think big and move fast.