DtC Wine Shipping Returning to Pre-Pandemic Normal
It's not the best of times for shipping wine direct to consumers, but it's not the worst. either.
While "the DtC shipment channel may not be hitting the highs of previous years, 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, an editor with WineBusiness Analytics, discussing the DtC Wine Shipping Report. “And while wineries continue to contend with inflation, the DtC market remains the most effective way to engage with their best customers and create new ones in the intensely competitive total beverage alcohol market.”
At midyear, volume is down 7% from a year earlier at 3.4 million cases, sales have slipped 2% to $1.9 billion as the average bottle price has climbed 5% to $46.12.
The Napa average bottle price is now $80.79 but had the lowest increase at 1%. Washington had the largest rise in average bottle price (11%), followed by Sonoma (10%) and the Central Coast (9%).
California maintains its position as the top destination state, with a 29% share. However, it also had a 14% drop for volume growth YoY for the first half.
Of the top 10 destination states in terms of volume, the top three for volume changes were Virginia (13%), Texas (-2%) and Washington (-3%). In terms of the top 10 destination states by value, the top three for value growth were Arizona (12%), Washington (7%) and Colorado (5%).
Of note: While also a top 10 destination state, Oregon experienced the largest dip in deliveries in both volume (-17%) and value (-18%). Alabama saw a 25% spike in value, which was the highest of any state, but is growing on a very small base. This increase, along with a 26% growth in volume, was also likely due to the continued effect of laws passed in 2021 that allowed for DtC shipments of wine in the state.
Winery location
Washington wineries lead all other regions with a 7% increase in volume growth YoY in the first half of 2023. Washington also enjoyed a 19% increase in value growth. The Rest of the U.S. category was the second-place finisher for both volume (flat at -0%) and value (+8%). Comparatively, the Rest of California category saw the largest retreats in both volume (-13%) and value (-9%).
Winery size
The largest wineries – those producing 500,000+ cases per year – increased their average bottle price the most (12%) to $19.45. Those wineries also had an 11% drop for volume growth. The smallest wineries (under 1,000 cases produced per year) saw the second-highest increase of average bottle price at 10%, topping off at $88.86. Those wineries also had the only reported increase in volume growth at 1%. Wineries producing 1,000 to 4,999 cases per year saw the biggest drop in average bottle price, dipping 7% to $60.53. Additionally, those wineries had the largest decline for value shipped (-13%).
Varietal
Of the top four wine types (Cabernet Sauvignon, Pinot Noir, Chardonnay, Red Blend), which account for 53% of the total share of the volume of all wine shipped DtC, each saw average bottle price growth (2% to 12%) and little to negative value growth (-7% to 2%).
The Other White category had the biggest gains in both average bottle price (17%) and value (10%). The next top varietal categories in terms of value growth were Zinfandel (7%), Chardonnay (2%), Riesling (1%), Merlot (1%) and Pinot Noir (1%).
No varietals saw an increase in volume shipped. Merlot and Riesling had the smallest dip for volume shipped, each with a 2% drop. Petite Sirah and Zinfandel followed at a 3% decrease year over year. The Other category had the largest drop in this category at –21%, followed by Moscato (-19%) and Sangiovese (-19%).