Steady Sales Growth Keeps Wineries Hiring

Winery Job Index increases 18% in November

by Peter Mitham
wine industry hiring DtC winejobs
Source: winejobs.com
San Rafael, Calif.—Steady growth in domestic wine sales, characterized by confident consumers and online purchases, helped buoy hiring activity among wineries in November.

Total sales of U.S. wine grew 6% to $3.5 billion in November 2016, according to market-research firm bw166.com, staying steady with the trend exhibited through much of this year. Similarly, direct-to-consumer (DtC) shipments in November were the second-strongest of 2016 at $332 million, based on figures from Wines Vines Analytics and ShipCompliant—this was up 7% from November 2015.

The real gain, however, was among cheaper wines, representing a democratization of the channel. Actual case shipments rose 20% to 668,450 cases. This also helped boost sales for the 12 months ending November 2016 to $2.3 billion, or 19% growth year-over-year.

The activity has, in turn, helped drive hiring.

“We’re seeing a huge push in hospitality and e-commerce, DtC, any of those titles,” said Dawn Bardessono, managing partner of human resources firm Benchmark Consulting in Napa, Calif. “There’s no ‘slow time’ anymore, at least from our perspective.”

Since 2012, consumers have been more willing to spend, to try different things, and they expect purchases to occur around the clock. This is prompting wineries to adapt to capitalize on the shift, tapping consumer demand as nimbly as they have been to tap global supplies of grapes.

“It used to be that wine production was seasonal, and now we source fruit from all over the globe, and so the consumer feels that there’s wine available 24/7,” Bardessono said. “Wineries are trying to produce that level (of service) as well.”

Based on postings at WineJobs.com, the Winery Job Index increased 18% in November 2016 versus November 2015. This was robust growth not only for the month, but also compared to previous months this year. DtC and winemaking positions led activity, with indices for both categories up more than 30% from a year ago.

This being said, the winemaking index has held steady at 104 for the past three months (the index was set with a baseline of 100 in January 2007). Bardessono suggests that with so many winemakers looking for work, many are finding work offline through traditional word-of-mouth leads or personal connections.

“You can hardly spit without hitting at least one winemaker, it seems like,” she said. “A lot of people are just showing up at wineries and getting hired, which is the way it used to be way back when.”

The good news is that all those winemakers—as well as the lab personnel and assistants that work with them—are making a lot of wine, giving consumers ample product to buy. Domestic wines have been driving growth through the latter half of 2016, according to Jon Moramarco of bw166.com.

Sales figures for the 12 months ending November 2016 indicate that U.S. domestic wine sales increased 5%, versus 3% for imports. When sparkling wines are stripped out, U.S. domestic wines account for all but a half percent of the growth.

The growth is also evident in off-premise channels. November 2016 sales through multiple-outlet and convenience stores rose 3% versus November 2015, according to Chicago, Ill.-based market-research firm IRI. Sales for the month topped $769 million.

An even greater increase was seen in the 52 weeks ending Nov. 27, 2016, as sales rose 5% versus the same period of 2015 to top $8.6 billion.

But if between $11 and $19.99 remains the sweet spot for many vintners, with sales pointing to broadening demand, more expensive bottles aren’t being left behind.

Off-premise sales of bottles priced $25 and up increased 14% in the most recent 12 months, totaling $165 million in the stores analyzed by IRI. Cabernet led the category, along with Chardonnay and Pinot Noir.

Similarly, among wines shipped DtC priced $60 per bottle and up, Cabernet Sauvignon commanded 49% of the market. The price segment is worth more than $1 billion, representing nearly 45% of DtC shipments. However, Cabernet Sauvignon shed market share in the past 12 months to Pinot Noir and Chardonnay. Pinot Noir rose 23% to $159 million in sales, while Chardonnay increased a dramatic 31% during the period to $52 million. Together, the two Burgundians now claim 20% of the DtC category.

Reflecting increased online activity, wine flash resellers recorded 487 offers in November 2016, up 8% from November 2015. This countered two months of declining activity, which helped keep total offers in the previous 12 months down by 4%.

Perhaps most reflective of the broadening of online activity is that flash offers generally average a 40% discount, based on an analysis of the retail price flash resellers state compared to the winery-retail prices. This was true regardless of the wine’s variety or origin.

Cabernet Sauvignon, for example, boasted the highest average retail price of $75 and the highest average flash price of $45, which equated to an average discount of 41%. Similarly, Sauvignon Blanc had one of the lowest average retail prices at $28 and an average discount of 42%. The same discount applied to wines from Oregon and Washington, while wines from North Coast California wineries were a percentage point less with an average discount of 41%.

Posted on 12.16.2016 - 08:52:23 PST
As specialists in wine-by-the-glass programs we are seeing the growth reported, and I totally agree with the statement " since 2012, consumers have been more willing to spend, to try different things"
This is presenting a huge growth opportunity for savvy restaurateurs, who can boost sales of more profitable 'Trade-up' wine & Champagne as long as they have the key service elements in place to guarantee quality. We are seeing dramatic growth when they invest in the right high performance professional grade wine preservation system.
Richard Hewitt