Surveying Direct-To-Consumer Wine Sales
WineBusiness.com pointed me toward a very interesting article by Wines & Vines magazine that explored a survey that publication had conducted with wineries on the issue of direct-to-consumer shipping. Direct-to-consumer shipment of wine is by far the most exciting sales channel and the most quickly developing channel for sales in the wine business.
The article in Wines & Vines indicates that in general wineries are happy with their efforts in this area and generally happy with the results. However, it also indicates by the relatively large number of respondents indicating their is LOTS of room for improvement that a great deal of education in this area is necessary.
Perhaps I missed it, but it seems to me that there is a real need for an in depth series of seminars or a conference on the issue of direct-shipping. I can think of a variety of companies that deal in this area that would most certainly bring much to the table at such a conference.
Most certainly this kind of conference would want to deal with:
-Compliance
-The Changing Legal Landscape
-Web design that is customer friendly
-How to run an effective e-mail campaign
-Effective Wine Club Strategies
-Tasting Sales Strategies
-Database Management
For the winery that sells between 3000 and 20,000 cases of wine per year, direct-to-consumer sales can be the channel that literally makes or breaks their profitability. A few wineries we work with at Wark Communications have specialized in Direct-to-Consumer sales and demonstrated that it can work to sell upwards of 10,000 cases per year, with wholesale and FOB sales far down the ladder in terms of percentage of sales.
There are nearly 5,000 wineries in the United States today, a figure close to double that of just 7 years ago. Combine this with the consolidating distribution tier and with the growing acceptance and expectation among consumers for direct access to companies products and you can see how direct-to-consumers sale is a big part of the wine industry’s and wine lover’s future.
In the last year plus I’ve been ordering wine from the wineries, mostly small production Pinot Noirs that just don’t get into many retail outlets. The one thing I like is a PDF ordering form that I can download, fill out and fax back. My employer doesn’t want us conducting financial transactions online (aimed mostly at day traders I suspect) and my home computer has been hacked into enough that I’m leary of using it much to submit orders.
Tom I think you have, literally, struck gold on this topic. Our winery, in the 2-3 thousand case range, is currently trying to figure out how to increase this sales channel. It is by far the most profitable sector and is certainly the largest. If you get a company to do this seminar count me in. I would also like to hear from more consumers such as Mark above, to find out what thier needs are and how we can get to them. Great post, I hope you have a couple dozen informative comments on this post by morning. I want to know more!
Tom – I couldn’t agree more. Wineries need to understand the best way to scale their direct initiatives. I’ve met with a number of wineries that just aren’t sure where they should be focusing their efforts. This is especially true for smaller wineries, which are exactly the ones that need to be the most focused on their direct channel to increase their bottom-line results.
Jerry,
I think this is exactly the market small wineries need to be capturing, and exactly why http://www.boutiquewinecellar.com, which will launch feb. 7th, was created. Boutiquewinecellar.com (BwC) was created, much like iTunes, to help aggregate small producers into one site that is viewed and commented on by millions of people. Further, we partnered with Inertia Beverage Group, who gave us helpful insight into the many intricacies of winery and consumer relations, as well as helping us identify small artisan boutique wineries who will benefit the most from having a more powerful direct sales channel. Additionally, http://www.boutiquewinecellar.com‘s active Marketplace will allow users to create and share profiles, thereby allowing them to write reviews about wine and wineries – as well as purchase wine direct from the wineries themselves. In essence, boutiquewinecellar.com is a platform not an eCommerce site. My apologies as this seems a little bit like a plug, but this is an exciting time to be boutique, but it’s an equally amazing time to be a consumer!
Justin,
It does seem like a bit of a plug but you don’t seem to be plugging the same old sh.. . I noticed your website ( what there is of it ) will be focusing on CA wines. I am a proud Oregonian and would say we need this type of thing more than CA. A majority of our industry is ’boutique’. Pinot is hot right now and Oregon has benefited greatly from the ‘Sideways effect’, perhaps consider expanding? Great idea though. Anyone who is not considering the power of the internet ( BLOGS ) in increasing thier direct sales is preparing for success in the 20th century.
Jerry,
Thanks for the response, and funny you should mention Oregon because we just signed up our first Oregonian winery – Amity Vineyards. Oregon has been quite an exciting place over the last decade and a half, or more, and keeps turning heads with it’s tremendous quality and value, so to slight you all would be an insult to the wine industry.
Hi Tom, I read your article with great interest. My [Sonoma based] company are in these days developing an application to increase DTC sales of wines, and I’d love to have your feedback on it. Some information can be found here; http://rasoftwarefactory.com/products/winepad-menu
The basic idea is that we’re using iPads as Wine Menus and it creates incentives to the guests to leave their email behind, allowing the winery to create a long-lasting relationship with their guests.