This blog was last updated on May 6, 2024
Why is it that direct-to-consumer (DtC) shipping of wine is available nearly nationwide, but is only available in a dozen or so states for beer and even fewer for spirits? This is the question that underscored a recent panel I participated in alongside Steve Gross, VP of state relations for Wine Institute, and Sam DeWitt, director of state government relations for Brewers Association.
Speaking at the recent Craft Brewers Conference in Las Vegas, we delved into the history of wine DtC shipping, how it became the $4 billion market it is today and what it will take for the beer market to achieve similar success.
The idea for the panel developed at a time when interest in DtC beer shipping opportunities has never been greater among both brewers and consumers. Despite this interest, though, the availability of legal DtC beer shipping lags behind wine, much to the chagrin of the beer industry.
How wine DtC shipping grew
One of the central messages of our panel was that DtC wine shipping wasn’t built in a day. As Steve Gross, arguably the person most responsible for the current state of DtC wine shipping, noted, it took decades of work and millions of dollars to put together the state-by-state lobbying efforts that created the broadly open map wine enjoys today.
At one time, DtC wine shipping was severely limited, with only a handful of states allowing it. By the mid-2000s, proponents had managed to establish DtC wine shipping options in roughly half of the country, though there was a hodgepodge of rules and restrictions, including reciprocity laws, that made the system terribly difficult to navigate. Additionally, several states had in-state-only DtC shipping laws, which threatened to further divide the industry by instilling the idea that states could discriminate against out-of-state interests simply because they were regulating the sale of alcohol.
This all came to a head in 2005 with the now celebrated Granholm v. Heald ruling, wherein the Supreme Court ruled that if a state were to allow any DtC shipping of wine, it would have to enable all wineries across the country to have access to that market.
With the Granholm ruling in effect, Wine Institute and consumer interest groups like Free the Grapes! began the effort to extend national DtC shipping rights in each and every state. This was not a fast or simple campaign, however, as each state had to be lobbied individually. Some states even decided to remove all DtC shipping permissions, rather than open up to the national market (though they all later reversed that stance).
And indeed, the drive to fully open up the U.S. to DtC shipping is ongoing, with three states that are still closed entirely and a half-dozen more with restrictions in place that severely hamper would-be DtC wine shippers. Nevertheless, the story that Steve detailed was one of broad success and achievement for wine makers and wine consumers alike.
How can beer DtC shipping grow as well
What lessons can the beer industry learn from what wine went through?
First, brewers can recognize that DtC beer shipping is an extremely popular idea among consumers. As detailed in the latest Direct-to-Consumer Beer Shipping Report, produced by Sovos ShipCompliant in conjunction with Brewers Association, nearly 90% of regular craft beer consumers (and 68% of all respondents) believe that the laws that restrict their access to DtC shipments must be updated, with 80% noting that they had tried beers that were not distributed in their local markets but which they would buy if shipping was available.
I pointed out at the panel how the responses from the report were not merely about individual sales, but also documented how greater DtC shipping availability would spur interest in craft breweries if consumers knew they could have a chance to try their beers without traveling across the country. That interest would similarly translate to more purchases at retail establishments, meaning that DtC shipping is not about taking anything away from the three-tier system but is simply another way for consumers to engage with the brands they love and explore new brands.
This message was underscored by Sam DeWitt, who provided the Brewers Association’s position on DtC beer shipping as a tremendous opportunity for the craft beer industry, if it can grow and expand. At a time when the craft beer market is missing the boom days of the last decade, DtC shipping could be a boon. While it is not a panacea for all brewers—it is expensive to ship beer after all, and many craft breweries justifiably see serving their local communities as sufficient—getting even half of what the wine industry has been able to build is, in a word, not small beer.
And while it will take effort to change the laws among the many states where beer DtC shipping is currently illegal, the beer industry will benefit by following what the wine industry has accomplished. For one, there should be no need to go back to the Supreme Court—in terms of the Granholm ruling, breweries are virtually indistinguishable from wineries and the principle of non-discriminatory treatment when it comes to DtC shipping rules should equally apply.
Further, there is the readymade playbook that the wine industry developed for how to successfully lobby for reformative legislation: work with local guilds and producers to create a unified front; engage consumers and channel their frustration at the lack of availability of DtC shipping into grassroots lobbying; and above all recognize and comply with the laws as they exist—any sign that this market is not manageable currently will be used to argue that it can never be made legitimate.
Two things came through clearly from the panel: DtC shipping of beer is popular and there is an established method for legalizing that market similar to how DtC wine shipping works. If we can come together as an industry and as consumers, we can bring about the positive opportunities that regulated DtC beer shipping promises.
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For more insights into the DtC beer market, download the 2024 Direct-to-Consumer Beer Shipping Report.
