The Hidden Factor That Will Further Boost Winery DtC Shipments
Winery shipments to consumers skyrocketed during 2020 and the pandemic according to the New 2021 SOVOS-Wines Vines Analytics DtC Shipping Report. This should not surprise anyone, nor should the disclosure that that average price per bottle shipped dipped considerably during 2020 as new DtC shipment recipients stocked up on less expensive wines than the channel normally trades in.
But the really interesting question now, which can’t be answered with great precision but will eventually be answered, is to what degree will this increase in winery DtC shipments be sustained in a post-pandemic/Herd immunity world? The DtC report addresses this question directly:
The question many are asking is to what degree the increased online wine purchasing patterns during the COVID-19 pandemic will continue when the pandemic is over. We believe three factors work in favor of a continued boost to online wine sales. First, lockdowns early on in the pandemic caused many – including younger, first-time purchasers – to discover the convenience and greater choice available when buying wine through the DtC channel.
Second, with more professionals opting to permanently work from home, online purchases have become much more commonplace, and wine sales are no exception.
Finally, wineries that have seen the positive impact of aggressive online marketing will devote more resources to this marketing and sales channel. We believe when taken together these three factors could lead to a doubling of the volume of winery DtC shipments over the next five years
The assumption made in the report is that some portion of new online buyers will continue in some degree or another to order directly from wineries when the pandemic is quelled.
One factor that is not taken into consideration, however, is the real size of the total universe of new online wine buyers. By most accounts, online purchases from wine retailers also saw a significant increase in 2020. According to Wine.com, for example, their sales increased 119% in 2020 over 2019. Other brick and mortar and online wine retailers have also been noting large increases in sales and shipments over 2019.
Some portion of the new buyers that appeared to have migrated to online purchases from wine retailers during the pandemic will almost certainly remain online buyers and will also most certainly find their way to winery websites. This increases the potential universe of new online buyers beyond those who were drawn to winery websites during the pandemic.
Finally, it’s important to note that retailers, unlike wineries, are still officially restricted from shipping wine to the overwhelming majority of states. If retailers can increase the collection of states to which they can ship with the consent of the state to include New York, Illinois, Massachusetts, Michigan, New Jersey and a few others, I would expect to see the amount of retailer-to-consumer shipments increase substantially, along with the number of new winery shipment recipients. This would bode well for the winery DtC shipping channel.
Disclosure: Wark Communications was part of the team that helped create the 2021 SOVOS-Wines&Vines DtC Shipping Report