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04.14.2014  
 

Metrics Show Wine Industry Thriving

DtC shipments and winery hiring record double-digit growth in March

 
by Andrew Adams
 
 
“sokol
 
Direct-to-consumer shipments typically increase during March, but this past March saw an unprecedented spike in shipments.
 
San Rafael, Calif.—Wineries are selling more wine at higher prices, direct-to-consumer shipments are peaking and winery hiring is at record highs.

The outlook for the industry appears positive, according to the latest industry metrics report by Wines Vines Analytics. Direct-to-consumer shipments in March grew 20% over the same time last year and were up 10% over the past 12 months. The total value of March shipments hit $213 million.

Off-premise sales growth remained steady and high-priced wine sales grew nearly 20% despite accounting for the largest price increase of all price categories.

Coupled with the strong sales numbers, wineries continue to seek to boost their staff levels. The Winery Job Index hit a record for March. The growth in hiring activity is being fueled by a higher number of job postings in the winemaking and hospitality sectors. Jobs in the winemaking category jumped 31% over 2013 and the hospitality category rose by 10%. The overall index grew by 15% over March 2013.

Off-premise growth steady
Off-premise sales of domestic table and sparkling wines in March continued their 7% growth in value on a 12-month basis while slowing slightly to 5% during the most recent four-week period. Total sales value in March grew to $572 million and $7.5 billion for the past 12 months, according to data from the Chicago-based market-research firm IRI.

The sales growth comes with bottle price increases across several price categories. The $20 and higher segment saw the largest increase (47 cents) but still grew 18% in value in the past 52 weeks through March 23. The $11 to $14.99 segment grew by 15% in the same period with the average bottle price in the segment growing by about a nickel.

Strong DtC activity in March
The increase in DtC activity is not uncommon for March as it reflects shipments by wine clubs and allocated wineries timed to dodge hot weather in the key markets of southern California, Texas and Florida said ShipCompliant’s vice president of strategy Jeff Carroll. After a 13% jump in shipments in January and a 12% increase in February, he said the DtC segment appears quite strong this year. “I think that business is good,” he said. “Shaping up really well this year.”

He noted the March total is close to the level of activity of November, which typically sees the second highest number of wine shipments behind October.

The 12-month total value of DtC shipments reached $1.6 billion, which is 10% more than the same 12-month period in 2013.

Based on four years of Wines & Vines/ShipCompliant data the average price per bottle for wines shipped direct to consumer from wineries producing less than 1,000 cases has dropped by $10 to $45.74. The price decrease was the most significant of any of the size categories and could reflect more small wineries pursuing DtC sales in addition to the low-production and most-expensive “cult” wineries of Napa Valley.

Conversely, the average bottle price of wines sold direct to consumer by wineries making 1,000 to 4,999 cases rose by $16 per bottle. Prices in other categories have stayed relatively stable.

Flash offers up
Flash websites continued a trend of making more offers for domestic wines in 2014. The total number of offers in March shot up 22% more than in February and 26% more than March 2013. The 12-month total rose to 5,687 offers, which is 7% more than last year.

Once again the website Invino had the most offers at 132 and about 50 of those came during a special offer event. Last Call Wines had the next highest offer total at 85.

Websites with a high volume of offers also tend to have a higher number of multiple offers for wines from the same winery. Invino made 1,404 offers in the past 12 months for wines from 356 wineries. Yet 75% of those wineries accounted for more than one offer. Last Call Wines made 871 offers from 142 unique wineries but 84% of those wineries had multiple offers.

Sites that had a lower offer count also had a lower number of wineries with multiple offers. In the past 12 months Last Bottle Wines made 193 offers for domestic wines from 119 wineries, of which only 39% had multiple offers. The Wine Spies had 324 offers, and half of its 162 unique wineries accounted for more than one offer.

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Wine Industry Metrics
 
Off-Premise Sales » Month   12 Months  
August 2014 $558 million
5%
$7,613 million
6%
August 2013 $531 million $7,167 million
     
Direct-to-Consumer Shipments » Month   12 Months  
August 2014 $78 million
17%
$1,686 million
10%
August 2013 $67 million $1,530 million
     
Winery Job Index » Month   12 Months  
August 2014 218
12%
224
19%
August 2013 194 189
     
 
MORE » Released on 09.15.2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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