Direct-To-Consumer sales are growing as US consumers find they have more money to spend, more reasons to be involved with wine, and direct wine shipping legislation eases
A few years ago emerging markets were the hot topic among wine and spirits producers. All those newly-minted middle class people, wanting to enjoy their premium spirits and wines – a hard temptation to resist. The reality of 2014: those middle classes are growing, and represent phenomenal future potential. However, for now at least, their everyday tastes remain local. Many drinks companies investing in emerging markets such as Brazil, China, South East Asia and Africa, have encountered poor returns and big risks. See here for more information on this.
On the other hand, the USA is showing good returns and increasing potential for domestic as well as imported wine producers. In 2014 Wine Intelligence published several reports highlighting various aspects of the market such as US Portraits (our wine consumer segmentation), US Landscapes (the essential market overview), and studies of specific opportunities such as Premium Consumers and Millennials. Additionally, we have recently conducted another survey with all US regular wine drinkers and focused on the Direct-To-Consumer (or DTC) wine sales.
Overall numbers are encouraging. 35% of all US regular wine drinkers (those drinking wine at least once a month) have purchased wine during a winery visit in the past year. Approximately 1 out of 4 regular wine drinkers have bought wine online from a wine store’s website, and a similar proportion from a winery through mail order or online.
For now we can firmly claim that there is a great opportunity in this business that currently accounts for $1.75 billion in total value (DTC shipments for the 12 months ending in October according to Wines & Vines / ShipCompliant). This is 13% more than the same period last year, but it still only engage a relatively small proportion out of the pool of 90 million regular wine drinkers that Wine Intelligence estimates are now drinking wine in the US. The recent liberalisation of the direct shipping laws in Massachusetts means that DTC shipments are now allowed in more than 40 states.