Over May 8-9, Sovos ShipCompliant hosted its 19th annual Wine Summit. For two days, wine makers, managers, consultants, attorneys and other industry members gathered at the Napa Valley Marriott to hear from a cavalcade of experts on regulatory and marketing advice and updates related to the wine industry.
19th annual Wine Summit Recap from Presenters
Rob McMillan from Silicon Valley Bank talked on how current market trends will affect the future of the wine industry. Acknowledging that the industry is experiencing a global downturn unlike anything seen in the last 30 years, Rob was optimistic about wine’s ability to persevere as a valuable and desirable commodity. Still, it will require adaptation and industry-wide cooperation to determine the best steps forward—along with the release of the 2023 vintage, which Rob was particularly bullish about. Accurate and timely market data is also critical for understanding where the industry is going, so make sure to participate in the SVB surveys when they come around.
Aniko Ritchie, representing the Tax and Trade Bureau (TTB), provided helpful guidance and updates for wineries managing their federal regulatory obligations. Her overall message was that, while the TTB is here to help, wineries can do themselves a world of good by getting ahead of any potential issues. Maintaining comprehensive records going back several years, timely reporting of any changes to a licensee’s ownership or premises and voluntarily disclosing any errors are the best ways to avoid problems and ensure your experiences with the TTB are nothing but positive.
Matt Botting, general counsel for the California Alcoholic Beverage Control, and Risa Williams, investigations sergeant for the Arizona Department of Liquor Licensing and Control, spoke on state-related issues at the 19th annual Wine Summit; primarily on compliant direct-to-consumer (DtC) shipping of wine. By understanding the permissions and obligations that come with state licenses, wineries can recognize what sales options are available to them and how to remain in the good grace of the state regulators as they look to expand consumer reach out.
Chuck Maniace, VP of regulatory analysis & design for Sovos, presented on sales tax issues as they affect DtC wine shippers. Sales tax can be a complicated issue for any business, but DtC wine shippers face numerous unique challenges including unique nexus considerations and special rates and taxes that apply only to wine. However, with care and attention—and specialized software support—sales tax needn’t be too daunting for any winery to manage.
Ian Consoli from Tablas Creek Vineyard, Carol Reber from The Duckhorn Portfolio and Quinton Jay from Bacchus Consulting Group discussed ways for wineries to extend their markets through combined DtC shipping and three-tier distribution. Indeed, it is a mistake for wineries to consider these as separate channels and not simply different sides of a winery’s overall business strategy. A unified message and brand identity can work for both DtC sales and three-tier distributions and ensure that consumers will recognize your wines wherever they see them. Time and experience have clearly demonstrated that DtC shipments can buoy three-tier sales—and vice versa. Still, the panelists warned against distributors demanding wineries shut down their DtC shipping programs before they will carry the winery’s products.
Jen Purcell from Avaline, Victoria Anderson from Hudson Ranch and Vineyards and Nigeria Cole from Sonoma State University examined how wineries can best reach out to younger and more diverse consumer bases as part of their business strategy. Central to their message was the need for clear and open communication. Wine can be intimidating, with all of its foreign verbiage and arcana, but the industry must move beyond this image if it will return to growth in the coming years. With transparency about what’s in the bottle—in terms of the tasting experience, its environmental impact and its nutritional content—wineries can better engage with new consumers and expand their market base. Diversity within the winery itself will also help project an accessible and friendly face that demonstrates firsthand that wine truly is for everyone.
Bahaneh Hobel, of Dickenson Peatman Fogarty, Rebecca Stamey-White, of Hinman & Carmichael, and Melanie Full, general counsel for Gallo, provided the attorneys ’perspective, discussing several issues currently affecting the wine industry. Local land use came up, relating to recent action taken against Napa-area wineries that had exceeded what was permitted under their licenses. Recent enactment of the federal Coporate Transparency Act also was addressed, as an underdiscussed and novel regulatory obligation that many wineries may soon be subject to. Following the overall message from the conference, the panel noted the importance for wineries to take care and pay attention to the details—and consult with experts—to avoid compliance issues.
Steve Gross, VP of state relations for Wine Institute, closed out the day with his regular State of the DtC Industry update. Steve remarked on the many ongoing ways that Wine Institute is working to improve regulatory conditions for wineries engaged in DtC shipping—and to stave off efforts to retrench the hard-earned permissions we do enjoy today. Of note were the ongoing rollout of new DtC regulations in Alaska, fixing numerous problematic rules that were recently adopted in Wisconsin and finally removing the production cap in New Jersey. The wine industry owes a great deal of thanks to Steve and his team for their ongoing work over the years to grow DtC wine shipping into what it is, and we at Sovos ShipCompliant are ourselves grateful to Steve for speaking at almost every Wine Summit.
With a successful conference under our belts, we look now to next year’s Wine Summit, which comes weighted with importance as both the 20th annual event and the 20-year anniversary of the Granholm v. Heald Supreme Court ruling that undergirds the DtC wine shipping market. We hope to see you there!
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Interested in learning more about the DtC wine industry? Find the highlights from our 2024 Direct-to-Consumer Wine Shipping report on our blog.
