So much has happened this year in the wine industry. It’s that time of year to look back, take stock, and make a few educated guesses for the coming year!
2017 saw an industry that’s growing steadily even as it grapples with the changing demographics of the consumer market. Topics that we’ve explored previously and at length—social media, engagement, and of course, DTC sales—are no longer fringe topics, but are now central to the conversation on building a wine business.
So what were the important trends of 2017 for the wine industry?
DTC Sales Continued to Rise
Year-over-year, DTC sales are up 23% and now make up 60% of annual revenue for most small-to-medium wineries. Many are now trying to figure out ways to use technology to track club metrics and increase engagement. Which means that…
Engagement Was (And Is) on Everyone’s Mind
Wineries are asking all sorts of questions about how to market themselves, including how to use social media and increase engagement on the subscriber level. We gained some important insights about these topics through our interview with Paul Mabry back in August.
Unboxing Became a Thing
We noted in a post that the most profitable person on YouTube is an anonymous woman who creates videos unboxing toys—and she makes roughly $4.9 million a year doing this. The whole trend of “unboxing” has become huge, for various reasons; we outline these in our white paper on the topic (and which also has some great tips on how to take advantage of this trend in your own wine club or subscription service).
Amazon has left the building
Though this was an announcement more than a trend, it reverberated through the industry: Amazon declared that they will abandon their online wine marketplace at the end of 2017. The announcement was sudden and was directly tied to their acquisition of Whole Foods.
Laws Continue to Change; Compliance is Key
Although things are looking brighter for subscription services in general, it is important to note how laws are always in flux. For example, Pennsylvania opened up to DTC shipping late in 2016—by itself huge news—and all through 2017, shipments to that state were big.
With laws changing, compliance is important. Many states continue to look at compliance for retailers and not just wineries. We discussed these issues in an interview with Steve Gross toward the end of the year. We also noted how the law could influence choices that wineries make in, for example, the shipping deals they offer.
Yes, the impact of millennials on the market is very much still on everyone’s mind. And no wonder: Millennials account for almost half of the wine market, and their share is growing faster than any other generation. We covered what this means for the wine industry, and what subscription managers can do to capitalize on the change.
CPL Ten Year Anniversary
So this might not be an industry trend, but it certainly is a company trend.This year has been all about our unrelenting passion for making a difference in our industry and pushing the boundaries for DTC wine shipping. CPL has been in business now for over 10 years and is making a difference every day for our clients.
Our Predictions for 2018
Of course, we don’t have a crystal ball. We can’t see the future. But we are willing to make a few educated guesses about how 2018 will turn out:
- The industry will come back, better than ever. In the wake of the California wildfires, wineries will rebuild and take the opportunity to dispel any long-term issues or concerns they may have caused to their businesses. The result will be an industry stronger than what it was before.
- DTC sales will continue to rise, especially when it comes to subscription services. The competition will become more intense as more and more wineries learn how to use social media, merchandise, metrics, and marketing automation tools to better engage their subscribers.
- How wineries engage will change as the market shifts more and more to millennials. They will fight harder to win the brand loyalty of millennials, who are not typically known for their adherence to a single brand. And wineries will do more to cater to Millennials’ penchant for experimentation.
- Legal compliance with state direct shipping laws will continue to be a focus. Small parcel carriers and logistics companies will be forced to take a tough stance on obtaining licenses information from their clients.
- There will be greater options for wine customers to redirect their wine shipments. Walgreen’s partnership with Federal Express may be the tip of the iceberg in this regard.
- We will see more happening with Amazon out of the DTC wine space—but don’t expect a rush to flash sales sites as a result
Thank you for reading this past year. Here’s to a prosperous new one!
The Team at Copper Peak Logistics