The US direct-to-consumer (D2C) wine channel saw its first decline in over a decade last year as consumers returned to the on-premise, data suggests.
Overall sales in 2022 dropped 10.3% in volume terms and 1.6% in value, compared to 2021, although average bottle prices rose by 9.7%.
However, volumes still outpaced pre-pandemic levels despite a year-on-year fall, according to a report by Sovos ShipCompliant and Wines Vines Analytics.
The report uses shipment data from more than 1,300 US wineries to consumers. It was the first decline in D2C value and volume recorded in the thirteen years that the report has been produced.
“None of these numbers can be understood without the context of the pandemic-induced market rollercoaster and now the effects of inflation and higher costs of living,” the report notes.
“No winery, regardless of region or size, appears to have avoided the effects of a retreat from consumer wine spending in the shipping channel.”
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An “extraordinary” decrease in average price per bottle shipped in 2020, due to pandemic-driven discounts, may have slightly skewed 2022 data (which shows a 9.7% increase in bottle spend). But the report points out since 2019 the average bottle price has still climbed 10.9%. “Wineries appear to have taken price increases in response to inflationary pressures up and down their supply chains,” the authors add.
Consumers spending under $50 per bottle (representing roughly 70% of the channel) “pulled back” on D2C purchases last year, which also helped to inflate how much was spent per bottle on average. Alongside this, the category is seeing consumers who entered during lockdown reverting to pre-pandemic shopping habits – and returning to the on-premise.
The resilience of higher-priced wines may have “masked” the true extent of the fall in D2C purchases, and the report calculates overall volume and value figures would be even lower if these top-end purchases were excluded.
“The significance of the decline in D2C winery shipments is somewhat masked by the performance of wines priced at $100 or above,” authors note. “Despite inflation across the economy, buyers of these luxury wines continued to receive shipments in 2022 at a similar rate to 2021.
“However, these wines represent only 8.1% of the total volume of D2C shipments and when excluding these most expensive wines, the channel saw a nearly 12% decrease in shipment volume and an 8.2% decrease in value.”
Wines priced below $30 saw a 17.5% decrease in shipments from 2021, while those priced above $50 saw a 1.0% increase.
Napa County, renowned for its premium offering, was the only region that saw a value increase in 2022 (3.2%) despite declining volumes, due to a 13.8% increase in the average price per bottle. Napa’s total value was US$2bn.
The value was led by Cabernet Sauvignon sales, with an average bottle price of $131.48. The report estimated total sales of the varietal in the region to have accounted for $1bn in 2022.
The worst-hit wine region was Sonoma County in California, where the volume of D2C sales fell by 14.2% and the value by 8.1% compared to 2021. The total value of D2C wine sales in the region was $8.3m.