The wine industry has experienced significant changes in direct-to-consumer sales as new regions emerge as key players in the market, according to a recent report by WineBusiness Analytics. The COVID-19 pandemic saw a surge in direct-to-home wine sales, with consumers preferring the convenience of ordering wine to their doorstep rather than visiting physical stores. However, as the world gradually returns to normal and on-premise locations reopen, the direct-to-consumer wine scene is showing signs of slowing down.

Sovos ShipCompliant and WineBusiness Analytics analyzed shipment data from US wineries for their mid-year direct-to-consumer wine report. The report highlights a return to pre-pandemic trends in the wine market, as the overall volume of wine shipped over the first six months of 2023 decreased by 7%, totaling 3.4 million cases. The value of shipments also dropped by 2% to $1.9 billion. While this decline may raise concerns within the wine industry, it indicates a reversion to the normalcy of pre-pandemic times after the unprecedented growth experienced in 2020 and 2021.

During the pandemic, bars and restaurants were closed, prompting consumers to transform their living rooms and backyards into personal bars. People directly ordered their favorite wines and spirits from distilleries and breweries, leading to significant growth in the direct-to-consumer market. Although the decrease in volume may be alarming, it is crucial to recognize that the market is still far ahead of its pre-pandemic state and remains a dynamic and vital sector within the US wine industry.

The report also highlights the notable shifting landscape of direct-to-consumer shipping destinations. While California continues to be the top destination state, it experienced a 14% decrease in volume compared to the previous year. Oregon saw a substantial decline of 17% in direct-to-consumer sales and an 18% drop in value. Conversely, Alabama experienced the most significant spike, with a 25% increase in value and a 26% year-over-year volume increase, driven largely by the state’s allowance of direct-to-consumer wine sales in 2021.

The average cost of wine bottles has risen by 5% compared to the previous year, with the West Coast experiencing significant shifts. Wines from Napa Valley now have an average bottle price of $80.97, representing a modest 1% increase from previous years. Washington has seen the largest rise in average bottle price at 11%, followed by Sonoma with a 10% increase and the Central Coast with a 9% increase. Interestingly, wineries producing between 1,000 to 4,999 cases per year witnessed the biggest drop in average bottle prices, with a decrease of 7% to $60.53 per bottle. These same wineries also recorded the largest decline in value shipped, with a year-over-year decrease of 13%.

In terms of varietals, no specific type of wine saw an increase in volume shipped. Merlot and Riesling experienced the smallest decrease in volume, with each varietal recording a 2% year-over-year decline.

The report emphasizes that both wineries and consumers are still adjusting to changing demands and preferences within the direct-to-consumer wine market. Despite the challenges posed by inflation, the direct-to-consumer market remains the most effective way for wineries to engage with their loyal customers and attract new ones in the highly competitive total beverage alcohol market.

In conclusion, although direct-to-consumer wine sales have slowed down compared to the heights of the pandemic, the industry remains resilient and shows signs of stability. The shifting landscape of destination states and the rising average bottle prices reflect the continuous evolution of consumer preferences. As the wine market returns to normalcy, wineries must adapt and remain agile to thrive in this ever-changing industry.