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By January 23, 2019 0 Comments Read More →

DTC Channel Is Reaching Maturity for Wine

Larry Cormier, General Manager, ShipCompliance by Sovos, presented the topline results from their annual Direct to Consumer Wine Shipping Report based on the 8 million transactions a year filtered through ShipCompliant by Sovos at the DTC Wine Symposium Wednesday.

The good news is that shipments broke the $3 billion mark in 2018 with continued growth in both volume and value. However, the growth is not as high as seen in recent years, which may be a function of the overall flattening market for wine as also reported by Silicon Valley Bank, and Cormier said, “the DTC channel is reaching maturity with few new markets to be opened, so growth will become more organic, but we have a huge beachhead to build on.”

Oklahoma was the only new state opened to direct shipping in 2018, and only a few states remain closed to the direct to consumer shipping.

The average bottle price increased 2.4% in 2018 over 2017 reaching $39.70, and value growth outpaced volume for all topline varieties and for wineries of all sizes. It’s particularly notable that large wineries have invested in the channel and showed a 27.7% volume and 36.7% value growth.

Sonoma County can boast to have surpassed Napa in overall volume shipped for the first time with a 19% volume increase. Bucking the trend, however, the value of Sonoma shipments only increased 18% indicating a small decline in average bottle price. While Napa moved in the opposite direction increasing the average bottle price by 7.1%, but only increasing volume by 1.6%.

For the seventh year in a row, Oregon outpaced the average volume growth of the channel with a 19% increase, though the average bottle price only increased 1.4%. The Rose success also  continued in the DTC channel in 2018 with a 24% growth in volume and 28% in value making it now the eighth most shipped variety.

Despite an overall optimistic report, Cormier noted a few areas to beware off. “With the success of the channel, states are starting to put more scrutiny on carriers, which in turn means they are putting pressure on shippers to be in compliance,” said Cormier.

He also noted that the Millennial generation is about five years behind where Boomers were at their age on average disposable income, which of course affect the premium wine market.

The ShipCompliant by Sovos Direct to Consumer Wine Shipping Report is available for download at http://www.shipcompliant.com/dtcreport19/.


By Kim Badenfort

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