2013-2023 A Decade of Direct Wine Sales Success Stories
[July 31, 2023 – Sandra Beals – 20 to 30 minute read] 2013-2023 A Decade of Direct Wine Sales Success Stories
“Without continual growth and progress, such words as improvement, achievement, and success have no meaning.”
Ten years ago this month, I founded DTC Wine Workshops Consulting Agency. At that time, the US wine market hit record sales according to an article published by Beverage Industry, April 9, 2013. “Wine sales in the United States from all production sources increased 2 percent from the previous year to a new record of 360.1 million 9-liter cases with an estimated retail value of $34.6 billion”, according to Wine Industry Consultant Jon Fredrikson of Gomberg, Fredrikson & Associates, Woodside, Calif. “The U.S. is the largest wine market in the world with 19 consecutive years of volume growth,” said Robert P. Koch, president and chief executive officer of Wine Institute, San Francisco, in a statement.
An interesting fact, in 2013 the value of direct wine sales surpassed that of US wine exports for the first time according to the Wine Institute.
Our ten year anniversary is an excellent time to look back at the progress made this past decade, celebrate our client’s many successes, and look forward to our future innovations. A big cheers to the members of the DTC Consultant Network for paving the way these past ten years as we worked together to develop proven methods! I wish our clients and members of the direct wine industry a fruitful journey ahead as we work together to ensure that ideal blends of talent, tools, and tech are in place to thrive.
So, what was happening in the direct wine sales market in 2013? According to a report published by ShipCompliant (now SOVOS) and Wines & Vines, direct shipments from U.S. wineries (7,600 at the time) to consumers represented $1.57 billion in value, up 7.5% year over year and 3.47 million cases in volume, up 9.3% year over year. The average bottle price for wines shipped producer to consumer was $37.78. The top five recipient states were California, Texas, New York, Florida, and Illinois, representing 60% of total wines shipped to consumer that year. We wrapped up 2022 with an average bottle price shipped producer to consumer at $45.16, an increase of 9.7% year over year. Consumers can now explore 11,546 wineries across the nation with 82% representing very small (up to 4,999 cases produced annually) and small (between 5,000 and 49,999 cases produced annually).
Take a look at the top five varietals shipped to consumers that year and think about how this trend has possibly changed for your winery:
What were the top initiatives and innovations in the direct to consumer wine space this past decade?
In 2014, I was a speaker at the DIRECT Conference in Napa, hosted by ShipCompliant as we took a close look at key direct wine consumer buying trends. At the time, females made 60% of alcohol purchases in the US (retail and online). When we discussed opportunities to retain wine brand loyalists, many of the tips that I shared then are still relevant today, including:
Take the time to have meaningful interactions and conversations. Have an annual customer touch point plan in place based on customer type. Don’t overkill with too many emails or calls but ensure that you have an ideal mix of personal contact as well as digital.
Schedule an annual member survey (top five questions) using a digital form or software solution such as Survey Monkey and include a deadline date to maximize return rates. Post survey period, communicate that your team will act upon the information collected within a timely manner.
Ensure that club members are escorted to VIP tasting areas and offer these brand loyalists – priority tickets and tasting reservations.
That same year, I served as a panelist at the “DTC Done Right” Conference hosted by the Luxury Marketing Council at Hall Wines, Saint Helena. We explored the evolution of winery e-commerce and consumer buying trends as it related to mobile shopping, mobile point of sale to improve tasting room sales, and website optimization tools. You can revisit the event recap blog post HERE for complete details.
Alf Nuciforo, Chairman of the Luxury Market Council San Francisco recognized Sandra for her contribution to the DTC E-Commerce Technology Panel at the DTC Done Right conference, Hall Wines, Saint Helena, CA February 2014, “Sandra, the scorecards are in and the verdict is unanimous. Your panel discussion was a huge hit. We’ve had rave reviews about the information you conveyed and the candor of your comments.”
In the fall of 2014, I took DTC Wine Workshops global as a keynote speaker at the International Wine Forum in Mendoza, Argentina. I was asked to share “Direct to Consumer Wine Sales and Brand Expansion Best Practices” to an audience of about 500 winery executives that October. As this part of the wine world was at the beginning stages of selling wine direct from producer to consumer, I focused most of my key take-aways on how to build brand loyalists through meaningful winery visits and events. Consumer data-collection and segmentation best practices were also top of mind for most of the audience members.
2014 was a pivotal year in the direct to consumer wine business as winery teams in evolving wine regions were eager to leverage ideal blends of talent, tools, and technology to capitalize on this viable sales channel. I launched the DTC Consultant Network at this time to respond to the growing needs of winery owners across the nation. Our friends in Oregon, Washington, Texas, Virginia, and New York wanted to leverage best in class tools and talent to develop their direct wine businesses. I assembled a group of specialists, many with extensive winery backgrounds. My goal was to ensure that we each brought complimentary skillsets to the table so that clients could benefit from a full-service solution. Collectively, we have each helped pave the way in the direct wine sales space by creating proven methods and repeatable models the past ten years.
“Taylor Eason over-delivered on creating a consumer insights profile for one of our wine brands. The detailed report will be crucial for our marketing programs in the upcoming year.” Crimson Wine Group
“FANTASTIC JOB SHANA! The Digital marketing Webinar was really great! Thank you again for presenting to the members of the New York Wine & Grape Foundation.“
2015 kicked off with a bang as winery teams across the US were ready to implement a new technology stack to become direct wine sales ready. I joined Andrew Kamphuis at Vin65 (now WineDirect) as a speaker at his Roadshows to bring subject matter specialists to up and coming wine regions. I provided hands-on instruction in the Sierra Foothills of California as well as Walla Walla, Washington. The top initiatives for most attendees included the development of e-Commerce and Responsive websites, mobile point of sale solutions to capitalize on conspicuous consumption when purchasing while seated with a group, social CRM (customer relationship management) to deepen relationships in between visits, and phone sales. In December of this same year, I interviewed Geraldine and Zach from Gloria Ferrer in my DTC Wine Case Study Series to showcase how their use of Vin65 Mobile POS solution with iPads improved guest experiences, increased tasting room conversion ratios, and grew their consumer contact list exponentially.
Andrew and his team launched Commerce7 in 2018. I am grateful to consider Andrew a mentor at the time that I launched DTC Wine Workshops. His willingness to review my business plan and give me sound advice put me on the path of success from the get go.
This was also the year that I began traveling the US to speak at winery association conferences in Virginia, Texas, Washington, Oregon, Lodi, Livermore, Paso Robles, Sonoma, and Napa. The ability to solve problems unique to each region helped us build customized and meaningful solutions based on a variety of scenarios.
By 2016, Direct to consumer wine technology was dialed in. ShipCompliant, now SOVOS developed the first of its kind, shipping compliance management software, and several fulfillment partners were integrating with e-Commerce solutions, point of sale systems, and club management solutions. FedEx and UPS came to the party with heavy investments in temperature control trucks and App based solutions to keep online wine buyers up to at on wine deliveries. The value of wines shipped in 2016 totaled $2.3 billion, up 18.5% from the year prior with 9,069 wineries operating across the nation. The average bottle price wrapped up at $38.29 up 1.2% from the year prior. Since 2011, this channel’s value had increased 75% accompanying a 70% increase in shipment volume.
I served on the Steering Committee for the DTC Wine Symposium, was a speaker at the annual gathering 2016-2019, and helped develop key workshop topics as the number of wineries in the US grew from about 5,900 to a little over 10,000 at the end of 2019, according to Wines & Vines Analytics. We focused our discussions on key topics such as “Creating 360 Customer Views” – one contact record to better engage with consumers based on lifetime values, region, interests, buying behaviors, etc. “Reservation Style Tasting Options” was a hot topic as the need to cater to club members and VIPs became a top priority in such a competitive space. I also launched the first of its kind, “DTC Wine Videeo Case Study Series”, showcasing winery executives and tech partners leveraging latest tools for delivering best in class experiences and offerings. I assembled a group of DTC Wine All Stars (pictured at left) to share their case studies at the 2016 Symposium. We had about three years of solid sales and marketing data to examine and this is where stronger segmentation became an important area of focus for our clients, ready to make fact-based decisions. That coupled with the unique insights we were able to glean from a variety of wine brands and wine regions across the nation, aided in our success in building proven models customized to a variety of situations/scenarios.
In 2017, we focused greatly on improving shipping turnaround times across the US by leveraging Bi-Coastal Shipping Services thanks to our friends at WineDirect. I interviewed the DTC Manager at Zaca Mesa Winery in the Central Coast of California about the ROI of using these services to increase repeat shipments to members, especially along the East Coast. Phone sales became one of the fastest growing direct wine sales channels as winery teams better connected with brand loyalists in between visits. We launched our Phone Sales Workshops to clients in all wine regions of the nation this year. At that time, the value of wine shipments to drinkers across the country increased 15.3% increase in volume. The total value of DTC shipments rose to $2.69 billion in 2017, up 127% since the inaugural report seven years ago.
At this time, I also joined Colby Smith, owner of CANVAS, (Concierge Alliance Napa Sonoma) to provide hands-on workshops to winery teams in these iconic regions. We collaborated on topics that were most relevant to winery owners and executives from year to year. She has also become a dear friend and business advisor over the years.
In 2018, our clients of all shapes and sizes wanted slick dashboard and data analysis tools to stay on top of conversion ratios, average order values by tasting type and space, as well as the ability to better forecast for staffing and business management success. Our friends at Community Benchmark launched in 2012 and had matured their offerings based on the unique intricacies of the direct wine business. In my July, 2018 Video Case Study, I sat down John Keleher, the founder, and Alyssa from Talley Vineyards located in the Central Coast to share how small to mid-size wine brands were leveraging this software solution to meet business goals and remain competitive.
That fall I was asked to keynote the “Impact Conference” in Adelaide, Australia where an audience of 600 learned about Direct Wine Sales and Consumer Engagement Best Practices in the US. I then worked with Robin Shaw of Wine Tourism Australia to launch an online Direct Wine Sales learning program for Australia winery teams that next year.
I kicked off 2019 as a panelist at the annual UNIFIED Conference in Sacramento as we shared “Direct to Consumer Wine Sales – The Big Picture”. I shared examples of our clients proven methods that included engaging e-Commerce shopping experiences, updated visitor options (seated and walk-in) to increase engagement and conversion rates, as well as direct to consumer inventory strategies to assist tasting room staff in positioning “access’ over discount to grow point of sale revenue.
Wineries shipped more than $3.2 billion worth of wine directly to consumers in 2019. With the largest increase in average price per bottle shipped in nearly a decade, wineries grew the value of the channel by 7.4% and volume by 4.7%. In 2019, the highest-priced wines once again saw the greatest growth. The volume of shipments of wines priced at more than $100 per bottle increased by 14% over 2018, far outpacing the overall DtC channel.
This year, DTC Wine Workshops was the first to introduce “Winery Hospitality Service Standards” and we supported iconic brands with development and training services.
2020 – oh what a trying time as we were forced to shelter in place starting that Spring, due to the pandemic. While I started the year off with a presentation at Unified Symposium in February on “Sales Strategies Beyond the Tasting Room”, all other public speaking engagements were canceled this year. We quickly launched the first of its kind, Virtual Winery Offerings web training program to enable about 500 winery teams that year. Winery stakeholders understood the true return on investment when connecting online with brand loyalists across the nation. Virtual, phone, and e-Commerce sales replaced tasting room visits until the shelter in place orders were lifted. Many of our clients continue to offer virtual winemaker meet-ups and new member virtual meet and greets to properly welcome and better connect.
We also trained hospitality teams on how to provide a seated, more intimate tasting experience, for reservation only quests during the reopening phases. We focused on safe, yet friendly and fun winery visits to encourage a higher level of connection with the winery stories and offerings. We also built updated conversion strategies to increase repeat sales within the winery website by layering on strong shipping offers and live chat website tools for quick service. I joined Wine Industry Network with a client panel later that year to showcase how small, mid-size and large winery teams were capitalizing on this rapidly growing sales channel.
We started off 2021, with an understanding of how the initial pandemic period effected direct wine sales across the nation. Wine shipments to consumers soared to a record $3.7 billion in 2020. We saw an historic 27% volume growth as wine buyers valued lower prices and online convenience amid COVID-19 restrictions, according to Wines & Vines and SOVOS. However, the record 8.39 million cases of wine shipped to consumers in 2020 – representing a 27% increase over 2019 – came at the cost of lower growth in value for the channel, which comparatively was up only 14.9% over 2019’s $3.2 billion in sales. And as consumers turned to lower-cost varietals, the average price per bottle for DtC shipments dipped by 9.5% to $36.83 per bottle, marking the sharpest-ever annual drop in price reported.
Top initiatives this year included the development of Consumer Journey Maps to support all direct wine sales channels as well as DTC Strategic Planning that included new website live chat and social instant messaging communication tools to drive engagement throughout the year.
2022 was a time to rethink staffing needs as many of our clients were forced to hire tasting room hosts from outside of the wine industry due to post-pandemic staff shortages. This meant, we needed to update training programs for new hires that highlighted the 3 Pillars of Successful Storytelling, Top Connection and Conversion Tools as well as Professional Wine and Food Service.
By this time, competition had become fierce as consumers had 850 tasting room choices between Napa and Sonoma wine countries as well as another 220 tasting room options in Paso Robles. We helped our clients prove models such as “Effective Reengagement Strategies” and “Developing Brand Ambassadors through Community Building”.
In 2023 I got back on the saddle with in-person speaking engagements and assembled a panel for the Wine Industry Sales Symposium that took place this past May in Santa Rosa. In this competitive landscape, it is important to think outside of the box when reaching new consumer audiences throughout the nation. Small wineries can better equip club members who are influencers in key states, to host winery teams at their golf clubs and benefit dinners, etc. Dan Zepponi reminded us to not forget the “Flyover States” when scheduling time to break into new points of distribution that can compliment the direct sales opportunities at restaurant winemaker dinners, charity events, etc. We also touched on the success of many small to mid-size winery brands now offering in-home wine tasting events in regions where brand loyalists are highly concentrated.
Halfway through the year, the overall volume of wine shipped in the first six months decreased 7% for a total of 3.4 million cases, while overall value of shipments dropped 2% to $1.9 billion according to Wines & Vines Analytics and Sovos. Following the record-breaking growth the DtC wine market experienced during the pandemic, the mid-year report points to an industry that continues to find its way back to relative normalcy.
“At the midway point of 2023, the DtC shipment channel may not be hitting the highs of previous years but it’s far ahead of where it was pre-pandemic and remains a dynamic and vital sector of the overall U.S. wine market,” said Andrew Adams, editor with WineBusiness Analytics.
So what does the future of direct wine sales look like as we are now in Q3, 2023?
#1 – Community Building is Key to Long-Term Sales Success and Steady Growth.
#2 – Updated Communication Tools and Consumer Journey Maps are now a necessity to remain Relative and Competitive.
#3 – Meeting Brand Loyalists Where they Work and Play is how many of our clients are going from Good to Great in building new winery Brand Loyalists across the nation.
#4 – A Complete 360 View of Consumer Records is essential in better equipping tasting room hosts and phone support staff with the right tools to better retain and increase repeat sales.
#5 – The Art of Storytelling and Connecting with tasting room guests is now more important as many of our clients are going back to Hybrid style tasting options (50-70% reservation guests and walk-ins welcome). The opportunity to introduce tasting room guests to one another opens opportunities for brand loyalists to share stories with newbies.
Thank you for joining me in this journey of revisiting key innovations and some of our client success stories from the past decade. Drop me a note as I would love to hear about how your respective winery teams are leveraging these tools to go from good to great.