Sonoma DtC Wine Shipments Surpass Napa

Oregon posts 26% growth in first half of 2018, Napa shipments remain the most valuable

by Peter Mitham
Sonoma County and Oregon wineries led all other major wine regions in direct-to-consumer shipment growth in the past six months.

San Rafael, Calif.—Direct-to-consumer (DtC) shipments from Sonoma posted the strongest growth in the first half of 2018, Wines Vines Analytics/ShipCompliant by Sovos reported, but Oregon's surge indicates the channel is being embraced beyond California.

Sonoma wineries shipped 877,795 cases DtC in the first six months of 2018, up 29% from the first half of 2017. The additional 195,383 cases shipped from Sonoma during the period were 50% more than the gains logged by every other region in the country.

The latest DtC figures come from a report released today by Wines Vines Analytics/ShipCompliant by Sovos on the first six months of 2018.

Sonoma’s strong showing made it the largest source of DtC shipments in the country for the period, pushing ahead of Napa, which ranked second with 820,055 cases shipped in the first half of the year. This was virtually even with a year ago.

Sonoma’s shipments were worth less than those from Napa, however, placing Sonoma second in terms of value. Napa shipped $633 million in the first six months of 2018, while Sonoma shipments totalled just $304 million.

Second to Sonoma in terms of growth rate was Oregon, where wineries saw case volumes shipped DtC rise 26% in the first half of 2018 to 183,748. This was also the strongest growth of any region outside California, representing an additional 38,050 cases shipped versus a year earlier.

The gain was especially significant given its strength relative to Napa County. Oregon’s growth in terms of actual cases was 10 times that of Napa, underscoring just how lackluster Napa’s growth in DtC shipments has been and how wineries in regions outside California have embraced this sales channel.

However, if consumers have been finding value in Sonoma, with shipments averaging $28.89 a bottle (the national average is $38.30), the quest for more affordable wines isn’t what’s been driving Oregon’s shipments. Together, Napa and Oregon wineries represent 52% of DtC shipments, and the two regions also command the highest average bottle prices seen for DtC wines. Wines from Napa averaged $64.36 a bottle in the first six months of 2018, up 5% from a year ago. Oregon wines checked in at $38.03, flat versus last year.

The taste for more expensive and exclusive wines was evident when drilling down into specific segments of the channel. Red blends from Napa posted a stratospheric 110% gain to $156 a bottle, for example. Wineries producing 1,000 cases or less also saw strong price growth. Oregon wineries led with a 19% increase in average bottle price, followed by Napa at 15%.

With respect to what actually shipped in the first half of 2018, Cabernet Franc led the way in growth with a 37% increase to 45,939 cases worth more than $23 million. This was off a low base, however, for a minor increase of just 12,394 cases.

Rosé, by contrast, notched impressive gains for the second straight year, making it a stand-out performer with 33% growth to 135,339 cases. This followed on 58% growth last year. Shipment value increased even more significantly, rising 38% in the first six months of 2018 to nearly $33 million.

The latest figures also show that large wineries producing 500,000 cases and up enjoyed the greatest lift in DtC shipments in the first half of 2018, with volumes up 32% and value up 42%. Small wineries producing 5,000 to 49,999 cases saw the second-greatest growth in case volumes, up 13%, while limited production wineries (less than 1,000 cases) saw the second-greatest increase in shipment value at 38%.

While mid-sized wineries (50,000-499,000 cases) saw strong growth in 2017, the group saw just 4% growth in the volume and value of DtC shipments in the first half of 2018. However, this segment typically schedules the majority of its shipments in the latter half of the year, giving it plenty of time to post a strong performance in the current year.

In terms of where shipments were heading, Pennsylvania remained a fast-growing destination. The state saw case volumes rise 44% by volume and 40% by value in the first six months of 2018. Wines Vines Analytics/ShipCompliant by Sovos expects the state to see strong growth in 2018, following on a breakout year in 2017 after the state updated its laws in 2016 to allow DtC deliveries.

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