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01.24.2014  
 

DtC Wine Shipments Could Reach $3.2 Billion By 2024

Sauvignon Blanc, wines priced below $15 per bottle saw boost in 2013, according to ShipCompliant report

 
by Kate Lavin
 
 
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The total volume of DtC wine shipments grew by more than 9% to reach nearly 3.5 million 9-liter cases. Source: Wines & Vines/ShipCompliant

South San Francisco, Calif.—The value of direct-to-consumer wine shipments grew 7.5% to reach $1.57 billion in 2013, and that number could climb to $3.2 billion within 10 years, according to the 2014 Direct Shipping Report. ShipCompliant vice president Jeff Carroll shared this and other results of his company’s annual report Thursday at the Direct to Consumer (DtC) Wine Symposium at the South San Francisco Conference Center.

 

By analyzing sales information from its Boulder, Colo.-based DtC wine compliance business with the database maintained by Wines & Vines’ data arm Wines Vines Analytics, ShipCompliant is able to assess trends in the DtC wine sector such as varietal popularity relative to winery size and average price per bottle year over year.

The volume of DtC wine sales increased 9.3% to reach 3.47 million 9-liter cases shipped in 2013. Explosive growth in DtC wine sales from Sonoma County, Calif., and Oregon is reflected in the upward trajectory of Pinot Noir, the most popular varietal in those regions.

Nearly half of total DtC wine sales dollars in 2013 came from Napa Valley wines, but the growth rate slowed this year. Napa-grown varieties that excelled this year included red blends, Merlot, Pinot Noir and Sauvignon Blanc.

Sales in December showed the most growth by volume compared to any month in 2013, with wineries selling 22.8% more wine by volume compared to the same month in 2012. Meanwhile the average price per bottle sold DtC was highest in March 2013, when consumers spent an average of $43.44 for each bottle of wine purchased directly from wineries.

Sales by price category
Nearly a quarter (23.3%) of the total wine volume shipped direct to consumers in 2013 was priced between $20 and $29.99 per bottle. Bottles priced less than $15 each comprised 18.9% of the total volume shipped (an increase of 20.7% over 2012), and bottles priced between $30 and $39.99 each represented 14.3% of all wine shipped direct to consumer during 2013.

Growth among bottle sales in the $15-$19.99 category jumped a whopping 101% since 2010.

Varietal sales
Consumers bought more Cabernet Sauvignon in 2013 than any other variety, with 595,103 cases shipped at a value of more than $454 million, for an average per-bottle price of $63.59.

Pinot Noir and red blends were the next most lucrative categories for DtC wine sales. Consumers bought 493,391 cases of Pinot Noir in 2013 at an average price of $41.44 per bottle, for a total value of more than $245 million. Red blends were not far behind: American wineries shipped 457,931 cases in 2013 at an average price of $45.81 per bottle, for a total value of nearly $252 million.

Sales by winery size
Medium, small and very small wineries dominate the direct-to-consumer wine market, with average price per bottle going up as the number of cases produced by the winery goes down.

While small wineries (those producing 5,000-49,000, as defined by Wines Vines Analytics) account for just 5% of the wine made in the United States, they produced 48% of the wine direct-shipped in 2013, according to the ShipCompliant report. These small wineries have increased the number of cases shipped by 28.3% since 2010, although the average price per bottle has not kept up: Bottles shipped DtC from small wineries fell in price by 8.8% between 2010 and 2013.

Medium-sized wineries (50,000-499,999 cases per year) produced 28.5% of the total wine volume direct-shipped during 2013; that wine represented 23.2% of the total dollar value of wines shipped that year. Both volume and value of wine shipped DtC grew around 7.5% over 2012.

Very small wineries had the highest average bottle price among wineries selling direct to consumer at $54.05 per bottle, an increase of 14% over the previous year. Producing between 1,000 and 4,999 cases per year, these very small wineries accounted for 14.7% of the volume of wines shipped during 2013 (an increase of 13.9%) and 21% of the total dollar value (an increase of 29.6%).

Very large wineries (those producing 500,000 cases or more per year) shipped 26% more wine directly to consumers during 2013, although this group of wineries only accounted for 5.2% of the total volume of wine shipped to consumers and 3.7% of the total value.

East of the West
For wineries outside California, Oregon and Washington, the volume of Chardonnay sent DtC increased by 61% in 2013 (a 71% increase in value), and the volume of Zinfandel shot up 408% to reach more than 6,000 cases and a value of more than $1 million.

The highest average bottle price in the non-West Coast states goes to Petite Sirah, which sells for an average of $29.28 per bottle. However, only 1,048 cases of this varietal were sold direct to consumer.

Who’s thirsty?
Californians comprise one-third of the consumers ordering wine directly from wineries. Texas, New York, Florida and Illinois round out the top five. Not surprisingly, these five states also rank at the top in terms of population.

Per capita, residents of these locales order the most wine: Washington, D.C., California, Colorado, Washington state, Virginia.

 

 

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Wine Industry Metrics
 
Off-Premise Sales » Month   12 Months  
July 2014 $557 million
5%
$7,577 million
6%
July 2013 $533 million $7,128 million
     
Direct-to-Consumer Shipments » Month   12 Months  
July 2014 $61 million
9%
$1,674 million
10%
July 2013 $56 million $1,517 million
     
Winery Job Index » Month   12 Months  
July 2014 312
10%
222
19%
July 2013 283 187
     
 
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