WASHINGTON — In 2019, Direct-to-Consumer wine shipments increased 4.7% over 2018. In 2020, they jumped 27% over 2019.
A webinar by SOVOS ShipCompliant yesterday contained some intriguing information about the impact of the Covid era on DtC shipments, and how wineries may take advantage of this silver lining in the future.
As we all know, restaurant sales disappeared a year ago, spurring channel shifting by consumers to both off-premise outlets (e.g., grocery stores) and internet sales (DtC). Both channels experienced huge jumps in April, with strong sales continuing throughout the year. In addition, many new consumers patronized these outlets who had not done so before–new business!
One difference was that consumers consistently paid more than before for off-premise wines, and less for DtC wines. The trading up in grocery stores probably reflected the fact that consumers were still paying far less than for the same wine ordered in a restaurant. In the case of DtC sales, $30 was essentially the breaking point affecting sales volume, with those above that price decreasing and less expensive wines increasing. It may be that the new DtC customers were not used to paying the higher prices of pre-Covid shoppers.
Not surprisingly, west coast wineries which already had a robust DtC tradition did very well, especially Sonoma and Oregon, but the big surprise was that the “Rest of U.S.” (mostly east coast) fared exceedingly well, accounting for 35% of the volume and 30% of value. This is most likely because limitations on travel forced millions of consumers to discover the “wine country” right in their own backyard, and the quality of wines produced there.
In short, Covid forced new patterns of behavior among consumers (shifting channels, and discovering “local”) and many producers (upgrading their internet skills, resources, and marketing). Now the key is for wineries to use and expand all they have learned during Covid and keep those customers virtually engaged.
— Jim Trezise, WineAmerica