For the past six years, Sovos ShipCompliant has teamed with Wines & Vines to shed light on the high growth direct-to-consumer shipping channel for wineries. Continued consumer adoption of online selling, coupled with more states allowing wine shipments, has resulted in double digit year-over-year sales and volume increases – a development that impacts wineries of all size.
The DtC channel’s value has increased 75% percent since 2011, with a 70 percent increase in the volume of shipments. To capture the purchasing trends by state, taste preferences, price points and more, we produced the seventh annual Direct-to-Consumer Wine Shipping Report. The proprietary data included is based on millions of anonymous direct shipping transactions from thousands of wineries across the country in the Sovos ShipCompliant system.
Top Trends in 2016 Direct-to-Consumer Wine Sales
Last year, South Dakota and Pennsylvania joined the DtC channel, with Pennsylvania becoming the 45th state to open its borders wine shipping. The industry also saw its largest annual growth rate surge to date, achieving a 17.1 percent increase in volume – that’s over 5 million cases of wine! – and $2.33 billion in the value of sales.
Here’s a sneak peek at the top shipment trends from wineries to consumers in the United States during 2016:
- Direct shipments from large wineries increased 183 percent: While the majority of wine produced in the United States comes from large wineries, the small and mid-sized wineries have traditionally favored the direct shipment channel. Many wineries moved into the large winery segment to be successful in the DtC channel, illustrating the opportunity for continued growth in this segment.
- Average price-per-bottle increases did not hinder order volumes: The average price per bottle increased by 1.2 percent to $38.69 in 2016, while order volumes saw a healthy 17 percent boost. Interestingly, the only winery size segment able to mirror that growth in both price per bottle and order volume was the small winery segment. The medium segment contributed generously to price growth but was unable to show year-over-year volume growth.
- Cabernet Sauvignon reigns supreme: Wineries shipped more Cabernet Sauvignon than any other variety once again in 2016. However, the growth in Cabernet shipments slowed. We saw a 28 percent increase in volume of red blends, which historically competes for second place with Pinot Noir.
- Pennsylvania poses a real threat to the top 10 destination states: The majority of direct wine shipments (31 percent) go to California, and that is not likely to change in the near – or even distant – future. However, Pennsylvania became the new player to watch in August of 2016, allowing direct shipments for the first time. In just four months, the 45th state to join the DtC channel jumped up to 22nd in terms of volume. Because of this huge immediate growth, we’re expecting Pennsylvania to be in the top 10 destinations for shipments in 2017.