More wine drinkers are opting to skip stores for direct shipping

In 2018, wineries shipped over six million cases directly to consumers throughout the country except Utah, Kentucky, Mississippi and Alabama, four states that still prohibit it. 

Source: http://www.sfexaminer.com/

By Lyle W. Norton 

February 17, 2019 

Recently, for a friend’s birthday gift, I phoned a local Sonoma County winery, selected a few favorite wines and had them shipped directly to his home in Los Angeles. Within three days, he had received them.

A growing number of consumers are taking advantage of the convenience and easy access to fine wines through this process that eliminates the retail and shipping middleman.

One of fastest growing trends in the wine industry is direct to consumer (DTC) shipping. In 2018, consumers spent $3 billion purchasing wine that was shipped to them directly by the winery, a 12 percent increase from 2017.

Representing a nine percent increase from the previous year, wineries, in 2018, shipped over six million cases directly to consumers throughout the country except Utah, Kentucky, Mississippi and Alabama, four states that still prohibit it. Oklahoma lifted its ban on direct to consumer shipments in 2018, resulting in $4.3 million worth of shipped wine.

The recently released 2019 Direct to Consumer Wine Shipping Report sponsored by Sovos and Wines Vines Analytics give some insights into what now accounts for 10 percent of all off premises sales of wine domestically.

The research in the study is based on two major factors: the volume or number of cases shipped and their value. California is the most common destination, representing 30.2 percent of the volume and 32 percent of the value of all wine shipped. Beyond California, Texas is, surprisingly, second in number of cases received at 8.2 percent followed by New York (6 percent), Washington State (5.4 percent) and Florida (5 percent).

Sonoma County experienced the largest increase, 19 percent in number of cases and 18 percent in value, surpassing Napa County as the region with most wine shipped by volume at 1.8 million cases. There is also demand for wines from the Pacific Northwest as Oregon and Washington State enjoyed increases in volume shipped of 19 percent and 18 percent respectively.

Sonoma County’s advancements in both volume and value of shipments included an average per bottle price of under $30. Napa County’s modest gains in both categories was accompanied by the highest average per bottle price of over $67, leading some to question if they have reached their price ceiling.

The report also brought some surprising results regarding the size of wineries doing most of the shipping. Of the 9,997 wineries in the United States, 80 percent are small or limited in size, producing under 5,000 cases per year. These smaller wineries, along with large ones producing over 500,000 cases, experienced the biggest increase during 2018 in both volume and value.

The larger wineries had a 28 percent increase in volume and a 37 percent increase in value of their shipments with an average per bottle price of $17.28. In contrast, the smallest low-production wineries experienced 17 percent more volume, but a 32 percent increase in value with an average per bottle price of $72.22. Overall, the value of direct to consumer shipments has more than doubled during the past decade.

The descending order of top shipped varietals are cabernet sauvignon, pinot noir, red blends, chardonnay and zinfandel. Pinot noir took over the second spot in 2017 which seems to correlate with the increase of shipments from Sonoma County and the plethora of small “pinot-focused” wineries that exist there.

In 2018, rose’ shipments grew 24 percent in volume and 29 percent in value, indicative of the popularity of the light wine, now created with purpose rather than as an afterthought.

It was a pleasant surprise to find that the volume of under-appreciated cabernet franc shipments rose 19.1 percent. Having recently tasted some fine releases and talked, over the years, with numerous winemakers who prefer the varietal, I often wonder why cabernet franc is not more prolific in California.

One explanation is that cabernet franc cannot compete with cabernet sauvignon, the popular grape that is abundantly produced and sold in California as a single varietal wine. Actually, cabernet sauvignon is a relatively new grape, the result of an accidental blend of cabernet franc and sauvignon blanc nearly three centuries ago. Call me daddy.

With increased membership programs and more awareness, the sustained growth of direct to consumer wine shipments will be an interesting trend to follow in future years. However, it’s always more fun to pick up your wine at the source and do some tasting.