Wine Shipping Report Reveals Industry Transformation
The recently release of the ShipCompliant/Wines & Vines 2017 Direct Shipping Report shows an American wine industry that actively exploited the near fully legal landscape for direct to consumer shipments of wine. The 18.5% increase in the value of 2016 wine shipments over the previous year is a tremendous achievement.
However, what should not go unnoticed is a small section in the summary of the report that shows DTC shipments now becoming a major part of the overall retail shipment pie:
“Jon Moramarco, Managing Partner of BW 166 LLC, reported that total consumer off-premise spending on domestic wines (including direct-to-consumer sales) totalled $26.9 billion in 2016. Winery direct-to-consumer shipments represent 8.6 percent of that total, coming in at $2.33 billion.”
What goes unsaid here is that while the $2.33 billion in wine shipments now equals 8.6% of the total off-premise sales of domestic wines in the U.S., that’s only wines that were actually shipped to the consumer. The total value of all direct sales (including those that are carried out of the winery) is far greater than the $2.33 Billion and is equal to more than 8.6% of the value of off-premise sales of domestic wines.
No one publishes a reliable statistic for the total value of direct sales, including both wine shipped and wine carried out. But what if the amount of wine carried out of the tasting room is equal to that shipped out of the tasting room? That puts 2017 direct sales at $4.66 billion and more than 17% of off premise sales of domestic wines.
It would be an impressive number and signal the radical change that has overcome the wine industry over the past 30 years. Consider that since 2011, the American wine industry had increased by more than 2,000 wineries. How many of those 2,000 new wineries depend to the point of survival on direct sales? My guess would be most.
Were the American wine industry to depend on the vision of wine sales laid out in 1933 as so many in the business today would like, there is simply no way the industry could support the 9,000 wineries that exist today. All of this is to say that if policymakers want to support small business and higher employment, the key for pushing those things forward in the wine industry is to support policy that aid direct sales.
Tom Wark contributed to the 2017 ShipCompliant/Wines & Vines Report