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DtC Wine Shipping Channel Experiences Market Correction with First-Ever Decline in Both Volume and Value


News provided by

Sovos ShipCompliant

Jan 24, 2023, 09:00 ET

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Sovos ShipCompliant Direct-to-Consumer Wine Shipping Report shows DtC retained 12% of total off-premise sales of domestic wine last year, keeping pace with 2021

ATLANTA, Jan. 24, 2023 /PRNewswire-PRWeb/ -- On the heels of 2020 and 2021, two consecutive years of chart topping revenue numbers for the direct-to-consumer (DtC) wine shipping channel, 2022 represents a market correction from pandemic conditions, as well as the effects of an inflationary economy, according to the latest Direct-to-Consumer Wine Shipping Report from Sovos ShipCompliant and Wines Vines Analytics.

Although volume dropped by 10.3% and the value of shipments fell 1.6% from 2021, DtC shipments of wine in 2022 kept pace with 2021 shipments by capturing 12.0% of the off- premise sales of domestic wines, essentially matching the largest ever percentage of domestic off-premise sales recorded by the DtC shipping channel (12.1% in 2021). The first-ever declines in both volume and value should be understood in relationship to the pandemic-induced market conditions of 2020 and 2021, as well as the unusual economic climate of 2022.

Although we experienced our first-ever decline in both volume and value ... DtC maintained its share of a contracting U.S. off-premise retail wine market.

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"After the all-time high of $4.2 billion in value that the DtC shipping channel experienced in 2021, the declines seen in 2022 were not that surprising," said Andrew Adams, Wine Analytics Report editor at Wines Vines Analytics. "Consumers were spending much more time in restaurants and bars as the on-premise sector rallied."

The average price per bottle (APB) shipped jumped significantly for a second year in a row, coming in at $45.16, a 9.7% average increase across the channel. And while this number must be understood in relation to the significant discounts that occurred at the height of the pandemic, comparing the 2022 APB to the pre-pandemic baseline, it has still increased more than 10% since 2019 – more than double the combined increases from the three years before 2019.

While declines in shipments from 2021 hit every region, wineries of all sizes and nearly every varietal, the highest-priced wines escaped significant volume declines in 2022, with wines priced at $100 or more increasing their volume by 7.8% and those with an APB of more than $200 soaring in volume by more than 20% in 2022. These increases helped the channel maintain its share of the off-premise domestic sales, even as wines under $30 dropped in volume by 17.5%, continuing trends from 2021 and in contrast to the unmatched increases in shipments these lowest-priced wines experienced in 2020.

"Although we experienced our first-ever decline in both volume and value for the DtC shipping channel in 13 years of reporting on the market, DtC maintained its share of a contracting U.S. off-premise retail wine market," said Larry Cormier, vice president, general manager, Sovos ShipCompliant. "Inflationary pressures throughout the supply chain mean that wineries can no longer offer the kinds of incentives they did during the pandemic, when we saw two consecutive years of record-breaking value results in the channel."

Other notable findings and trends described in the 2023 Direct-to-Consumer Wine Shipping Report include:

  • Rest of California continues to outperform: The Rest of California region saw the smallest drop in volume in 2022, losing only 3.0% from 2021, while the value of DtC shipments dropped barely at all (-0.1%). This is the second year in a row that the Rest of California region significantly outperformed the overall DtC shipping channel.
  • Cabernet Sauvignon shows most strength in a down year: Cabernet Sauvignon shipments showed relative strength in an otherwise challenging market. Cabernet saw increases in the value of shipments (+5.7%) and smaller-than-average decreases in the volume shipped (-7.2%) from 2021.
  • Kentucky wine lovers continue to say yes to legal shipping: In its second full year of being open for wine shipments after a change in the state's laws, Kentucky saw the volume of its shipments increase by 18.1% and the value of those shipments grow by 49.6%.
  • Top states remain: The top five states by volume of shipments remained as they were in 2021. California residents, by a wide margin, received the most shipments, with 30.81% of the total volume of wine going to consumers in this large wine-producing state. California was followed by Texas, New York, Florida and Washington.

The Direct-to-Consumer Wine Shipping Report is an annual collaboration between Sovos ShipCompliant and Wines Vines Analytics, examining shipment trends from wineries to U.S. consumers. The proprietary data included is compiled from an algorithm measuring total DtC shipments based on millions of anonymous direct shipping transactions filtered through the ShipCompliant system and paired with Wines Vines Analytics' comprehensive data on U.S. wineries, resulting in the most accurate depiction of the DtC wine shipping market.

To download the full Direct-to-Consumer Wine Shipping Report, visit dtcreport.com.

About Sovos ShipCompliant
Sovos ShipCompliant has been the leader in automated alcohol beverage compliance tools for more than 15 years, providing a full suite of cloud-based solutions to wineries, breweries, distilleries, importers, distributors and retailers to ensure they meet all federal and state regulations for direct-to-consumer and three-tier distribution. ShipCompliant's solutions reduce risk, lessen the burden of compliance, accelerate bringing products to market and enable revenue growth. With 60+ partner integrations, Sovos ShipCompliant leads a robust ecosystem of technology partnerships, enabling powerful complementary solutions. For more information, visit https://www.sovos.com/shipcompliant/ and follow us on LinkedIn and Twitter.

About Wines Vines Analytics
The Wines Vines Analytics team maintains the wine industry's most accurate databases and provides data-driven analysis, data, insights and reports to help clients grow and manage their businesses. For more information visit http://www.winesvinesanalytics.com.

Media Contact

Amelia Wright, Alloy, on behalf of Sovos ShipCompliant, 855-300-8209, [email protected]

SOURCE Sovos ShipCompliant

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