The ninth edition of our annual Direct-to-Consumer (DtC) Wine Shipping Report 2019 with our partners, Wines Vines Analytics, not only confirmed our earlier prediction that Sonoma County would overtake Napa County as the largest source of DtC wine shipments, but also that the DtC channel would top $3 billion in 2018. Join us for a live webinar, “Direct-to-Consumer (DtC) Wine Shipping: Highlights and Trends from 2018,” on Thursday, March 28, 2019, to discuss key findings and real-world examples of growth trends from 2018 and some predictions for 2019.
DtC Channel Maturity
Additional highlights of this year’s 2018 year-in-review report show a healthy growth of winery shipments over 2017, yet the volume of wine shipped and value of those shipments underperformed the average increases for the past seven years. Did price hikes, a key theme in 2018, have a factor in key wine regions? What about the California wildfires? [Download the full 2019 DtC Wine Shipping Report]
A Brief Look at Varietals
Napa County, which has consistently driven the growth of the overall wine market, saw a considerable dip in volume and value of wine shipments to consumers. But how did its varietals fair during 2018?
- Blend – Red saw a 7 percent price increase in the region.
- Cabernet Sauvignon saw a 5 percent price increase; while
- Chardonnay had a modest 3 percent increase in price.
- Pinot Noir had the largest price increase in Napa, rising 12 percent.
This helped to propel the average price-per-bottle increase shipped from Napa County wineries to 7.1 percent, well above the overall shipping channel’s increase we cover in the report. All slowed in volume shipped as Napa sacrificed volume for price increases.
Popular Varietals – Still Holding Strong
Cabernet Sauvignon, Pinot Noir, Red Blends, Chardonnay and Zinfandel together represented 60 percent of the volume of wine shipped direct to consumers in 2018, holding their reign as the top five varietals shipped to consumers. Pinot Noir shipments outperformed the overall DtC channel, even while average price-per-bottle shipped increased 2.6 percent. Other varietals with impressive shipping momentum in 2018 included Zinfandel (extending its gains from 2017), Other Reds, Cabernet Franc (continuing its rise beginning in 2014) and Sangiovese.
Destination of Shipments by Volume
While California remains the most common destination for wine shipments, accounting for 30.2 percent of the volume of all winery-to-consumer shipments nationwide, South Dakota saw the biggest volume increase (outside of Oklahoma, the only new shipping destination) at 78.2 percent. Download the report for a map of every wine shipping destination by state on page 26. Pennsylvania, after only two full years for legal direct shipment from wineries, now sits in eighth place in total volume of shipments, and saw a 29.6 percent increase in volume in 2018.
2018 Wine Analysis by Price
Price hikes were a key theme in 2018, with an overall 2.4 percent increase in the average price-per-bottle shipped—the largest year-over-year increase since 2011. For many regions, these price increases coincided with increased sales volumes. Oregon, for example, continued its seven-year growth run, considerably outperforming the overall DtC wine shipping channel in 2018, despite its average price-per-bottle shipped increasing by 1.4 percent. Washington also outperformed the overall shipping channel in volume and value, but only through decreases in the average price-per-bottle shipped.
Almost without exception, price increases in the overall winery-to-consumer shipping channel have been followed by flat or declining prices the following year. The price increases in 2018 on direct shipped wines were historically large. Should this necessitate tempered optimism heading into 2019?