Making the Most of the Annual DtC Wine Shipping Report

This blog was last updated on February 29, 2024

By Andrew Adams

Andrew Adams is the editor of the Wine Analytics Report and a regular contributor to Wine Business Monthly magazine. Adams grew up in the city of Sonoma, Calif., and graduated from the University of Oregon with a degree in journalism. In addition to working at daily newspapers for more than a decade, Adams worked for more than two years (three harvests) in the cellar and lab at a winery in Napa Valley. 

The past year was a historic one for the winery direct-to-consumer channel, which is still relatively new and much smaller than both the retail off-premise and on-premise markets. Despite accounting for slightly more than 10% of total off-premise sales value, the DtC channel was a source of remarkable growth and consistent revenue during what proved to be one of the wine industry’s most challenging years. The following are a few recommendations on how winery staff can make the most of the 2021 Direct-to-Consumer Wine Shipping Report, the definitive examination of the channel produced annually by Sovos ShipCompliant and Wines Vines Analytics.

Benchmark your winery’s performance

The report and our DtC data are not just based on Sovos ShipCompliant’s customers. While those transactions are at the heart of our statistical model, the Wines Vines Analytics database has such an accurate accounting of the more than 11,000 U.S. wineries that we are fully confident in our projection of the entire DtC market. That means when you compare your own internal DtC data to what is in the report, you’re accurately comparing how you did versus the entire market. The report provides comparative data for key winery regions, annual production, varietals and the top destination markets.

What varietals are trending and at what prices

Year after year, the top varietals and wine types in DtC have been Cabernet Sauvignon followed by red blends and Pinot Noir. The past year saw significant growth of the “other” wine types, and while Cab remained No. 1 and shipment volume increased by more than 18%, the average bottle price per shipment fell by more than 13%. That indicates a flood of lower priced Cabernet wines had washed over the market as consumers purchased more everyday value wines or explored winery direct purchases and delivery for the first time.  We’re still sifting through the data, but it appears — as one may expect — these first-time buyers were doing so at prices much lower than the channel’s average.

Digging into all varietals yields some interesting results. Sauvignon Blanc shipments were up 45% and Rosé enjoyed a 33% increase in shipment volume. The increases in shipments of these wines further demonstrates consumers were buying a greater variety of wines that were most likely intended for consumption occasions that have not traditionally been associated with DtC.

Markets of opportunity

The states with the biggest DtC markets are also the leaders in on-premise and retail sales. This year’s report includes the year-over-year increase in shipment volume for all 50 states. Shipments to New Mexico, for example, were up more than 66% while Iowa saw a 47% surge and West Virginia was up 44.5%. The COVID-19 pandemic has been a national event and the increase in DtC shipments across the United States shows that consumers outside of “traditional” wine markets are buying wine direct and in volumes that are quite significant for those markets. Virtual tastings are expected to remain an important tool to engage with consumers. The data indicate a winemaker-hosted virtual tasting for a group of friends in Des Moines may be well worth the time and investment.

How DtC fits into the larger market

The past year showed that DtC is an integral part of a balanced sales strategy. Big margins from tasting room sales don’t account for much when the tasting room is closed indefinitely. DtC shipments are a way to serve consumer demand that other channels can’t or are unable to meet.

Our report provides the most objective and accurate picture of the DtC market that you can use to compare to data about other sectors of the industry. Understanding the total market doesn’t require as much time and investment as you may think, especially with free resources such as the annual report.