Last month, we released our annual report with Wines Vines Analytics, offering a deep dive into the state of the direct-to-consumer (DtC) wine shipping industry. There’s a ton of interesting highlights, data points, and trends in the report – including which regions shipped the most wine in the DtC channel last year, which regions saw the most growth, and which failed to live up to expectations.
Overview: Sonoma and Oregon drive DtC channel growth
Napa County has traditionally been the dominant force in the DtC channel, but other regions have begun to close the gap in recent years. Finally, in 2018, Sonoma County overtook Napa in terms of the volume of wine shipped direct to consumers, while seeing impressive growth in the value of wine shipped, as well. Napa’s price per bottle shipped went up last year, which can explain its continued hold on the most value shipped, but it appears as though consumers may have been somewhat turned off by the high prices in this region.
Meanwhile, Oregon built on its impressive growth across the past seven years. In fact, it significantly outperformed the entire DtC shipping channel last year, increasing both the volume and the value of its wine shipped direct to consumers. This is certainly a region to watch over the next few years, as is its neighbor, Washington, which also outperformed the overall channel – sort of. But, more on that later.
Napa continued to grow modestly, but lost its grip on the market
Historically, Napa wineries have been the most consistent growth drivers in the DtC channel. But after years of fending off Sonoma wineries, Napa was at last unseated as the undisputed king of the channel. Despite this, the region saw some growth – a 2 percent uptick in volume shipped and a 9 percent increase in value – but these numbers fell well behind the DtC channel at large, which grew 8.9 percent and 11.6 percent, respectively. This explains how Sonoma was able to surpass Napa in volume shipped. Likewise, there would appear to be a simple explanation for the rather tepid growth in this region – prices went up 7 percent, and some consumers evidently balked at the increase, opting to take their business elsewhere.
Sonoma’s impressive growth culminated in its rise to the top
While the overall DtC channel saw 11.6 percent and 8.9 percent increases in volume and value, Sonoma wineries jumped up 19 percent and 18 percent in those categories. Those are impressive increases year-over-year, and they were perhaps spurred by a 1 percent decrease in price per bottle shipped. As Napa wines grew more expensive, Sonoma wines appeared to undercut them, at least to some extent. In fact, this appears to be indicative of a longer trend – since we began tracking this data in 2011, Sonoma wines have decreased in price by a whopping 17 percent.
Keep an eye on Oregon and Washington over the next few years
While they won’t pose challenges to Napa and Sonoma this year, Oregon and Washington are poised to become real players in the DtC channel in the long-term. Last year, Oregon saw its volume increase 19 percent and its value 21 percent; meanwhile, Washington saw upticks of 13 percent and 12 percent, respectively. Both states are outpacing the overall DtC market’s growth, and appear poised to keep it up over the next several years as Pinot Noir (Oregon’s top wine produced) and Rosé (a Washington specialty) remain nationally popular. In fact, Rosé shipments in Washington have doubled in share since 2011, jumping from 2 percent of the state’s shipping volume to 4 percent in 2018. As long as Rosé remains popular, Washington will continue to see growth.