DtC Shipments Surge, Total Wine Sales Strong

Led by direct-to-consumer sales, all industry metrics show positive growth in August

by Andrew Adams
wine wines vines analytics direct to consumer sales
San Rafael, Calif.—All of the key wine industry metrics tracked by Wines Vines Analytics had solid, positive growth in August, with the most impressive increase occurring in direct-to-consumer wine shipments.

Compared to August 2015, DtC shipments this August rose 39% to $112 million. While it does appear more wineries are entering the DtC channel and improved temperature control for wine in transit is boosting summer DtC sales, this particular jump is more likely because August included a fifth Monday, which is a popular day for shipping. DtC sales in the past 12 months came to $2.2 billion, which is 14% more than a year ago. By volume, DtC shipments totaled 291,944 cases in August and 2.8 million for the year.

All of the metrics and more industry data can be found here.

U.S. wine sales registered steady growth in August 2016, according to market-research company bw166, rising 4% over sales in August 2015. Sales of domestic wines through all channels including on-premise, off-premise and direct-to-consumer totaled $2.8 billion.

Writing in bw166’s monthly overview report, the company’s managing partner Jon Moramarco pointed to on-premise sales benefitting from operators restoring margins lost during the Great Recession. This has boosted consumer spending in the channel.

While totaling just under half of domestic sales, imported wines continued to outstrip domestic sales growth with a 4% gain during 12 months.

Sales in the off-premise channel rose by 5%, according to the Chicago, Ill.-based market-research firm IRI. August sales came to $622 million in the mostly chain stores measured by IRI, while the 12-month total, which was 6% higher than last year, was $8.5 billion.

As wineries enjoyed brisk sales this summer, they have also continued to add staff. According to the Winery Job Index based on postings to winejobs.com, hiring activity increased 10% in the month of August and was 8% higher over the past 12 months.

The winemaking job subcategory inched 1% higher than the previous year, sales and marketing job postings rose 7% and the biggest gains came in the winery retail, DtC and tasting room subcategory that increased 25%.

Focus on Cabernet Sauvingon
This month Wines Vines Analytics focused on sales of Cabernet Sauvignon. Sales of the varietal in the off-premise channel continue to climb, with most growth occurring in the $8 to $10.99 segment. The average price for Cabernet Sauvignon wines in this segment is $9.96, according to IRI, which is a penny less than in 2015 but higher in sales total.

High-priced Cabernet wines account for a big chunk of DtC shipments, and Cabernet Sauvignon costing more than $100 per bottle totaled $339 million in the past 12 months—19% more than during the same period in 2015.

Cabernet Sauvignon, especially Napa County Cabernet Sauvignon, accounts for a big chunk of the wines offered by flash websites, which resell wines at big discounts for a limited amount of time. Cabernet accounted for nearly 25% of all offers, and more than half of those came from Napa County wineries.

Just like offers for other types of wines, however, the number of offers for Cabernet has declined. Flash offers for the varietal in 2016 fell 4% compared to the previous year. Most of the Cabernet wines offered by the websites had a flash price of less than $40.

Total offers fell 3% in August, and the 12-month total also slipped by 1% compared to the previous year. The decline in August offers may stem from the fact that WineShopper, which was acquired by Wine.com more than a decade ago, is no longer operating as a separate site and that Lot 18 and Wine Woot both made fewer offers than normal.

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