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By July 6, 2017 0 Comments Read More →

East Coast DTC Survey Reveal Top Performing Winery Strategies with 50% Higher Growth

By Dawn Dolan, Staff Writer

VinterActive has just released their newest research report, VinQuest 2017, which focuses on the East Coast wine industry’s direct-to-consumer (DTC) practices. Bryan St. Amant, Founder & CEO of VinterActive, has a stated commitment to deliver the tools, knowledge, and service needed for wineries to take full advantage of the direct-to-consumer market, which continues to be the wine industry’s fastest growing sales channel.

Not all wine regions are the same, and St. Amant points out that within the East Coast DTC market, there is opportunity at almost every size of winery. “Think of sales as systems,” says St. Amant. “Compared to the rest of country, a main concern of many East Coast wineries is that they get tons of visitors-too many for their space and staff to handle effectively.” If you are a winery with this issue, St. Amant feels this should equate with new revenue. “The trick is how to differentiate their product by service levels. Think flying coach vs business class.”

The average price per bottle for the survey participants was only $16.00, and St. Amant feels that many wineries may be selling themselves short. “Bring in a higher tier along with the less expensive stuff. You don’t have to throw out your original pricing. Just expand your wine club offerings, and create specialized products or premium allocations for them.” According to St. Amant, “Our survey shows that the top performing wineries were doing three to five things to differentiate and market themselves.” 

The survey displays that overall, East Coast wineries appear to have a heavy reliance upon walk-in visitors for the bulk of their DTC sales. Their wine clubs are following that model, and rely on a pick-up system (instead of shipping to clients). The lower average bottle prices, compared to West Coast wineries, make the cost of shipping a higher percentage of the total, and thus harder to justify. So how can clubs gain ground and expand? The survey data pulls out great ways that wineries are differentiating themselves; by instituting multiple tiers of tasting appointments, creating scarcity of products, and thinking about how to sell their wines when their clients aren’t right there in front of them.

Putting these multiple tactics into play is working among the best performing wineries in the just-released survey, as they are realizing a 15% growth in direct-to-consumer sales. The survey average was at a respectable 10%, with less growth-oriented wineries seeing around a 7% growth, typically doing a smaller amount of marketing than the more successful of the survey participants.

Best bang for the buck? Staff training. As a relative impact on sales growth, this one item puts all others to shame, with wineries that offered staff training enjoying a 20x faster growth. Says St. Amant, “If you are already doing this, congratulate yourself. If not, what are you waiting for?” With well-trained staff who can provide an excellent tasting room and sales experience to clients, sales are higher, and your client or club member turns into your brand ambassador. They then send or bring others back to the winery. Thus the consumer referrals which ranked first for achieving excellent marketing results in the survey.

Says St. Amant in the survey data, “While correlation is not causation, tactics associated with success offer valuable insight for wineries seeking to grow their DTC sales.”

St. Amant, a 15-year veteran of Silicon Valley prior to starting VinterActive, earned an undergraduate degree from UC-Berkeley in Mechanical Engineering and his MBA from MIT, seems to have the data dialed in. When asked who should be reading this report, he replied, “Any East Coast wineries that want to grow their DTC programs or find out where they stand with regards to their practices should look at this. They can see what their competitors are doing.” Winery associations also can play a role by offering direction and best practices training, says St. Amant, “Associations can take a lead in that [helping wineries].”

What personnel should review this graphics-driven information? “The size of the winery determines who should be looking at this. In many small wineries, the DTC sales manager is the owner. In other wineries, as they get larger, you may have a tasting room manager or wine club manager who should be looking at this. Any decision makers that think about what they should be doing next, and ponder how to improve their DTC sales. Basically those ready to take action”, cites St. Amant.

The 2016 Vinquest report was published last year with a California focus, and this year with an East Coast focus. Now pairing with partners Wine Industry Network, successive years of reporting will feature an ambitious nation-wide data compilation of direct-to-consumer best practices. This year’s thirteen page Benchmarks & Best Practices guide, along with the full report which features some breakdowns by specific state, is available to order on their website. See featured snippets from the VinQuest 2017 U.S. East Coast Consumer Direct Wine Sales Report.

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