Top Tips from Our Analysis of the 2024 SVB and SOVOS/ShipCompliant Reports
02.14.2024  |  by The Copper Peak Team

The Silicon Valley Bank (SVB) State of the US Wine Industry Report 2024 and the 2024 SOVOS/ShipCompliant DTC Wine Shipping Report came out last month, and the picture they paint is a little hard to make out. Is consumer spending on wine truly up, or down? How much are abstainers affecting the market? Have trends stabilized post-pandemic?

While we don’t have all the answers, we can share our own perspectives, based on our decades of experience with the industry and these reports—and we can advise wineries on how to prepare for the rest of the year, given these trends.

We feel that the data indicates wineries should be paying attention to…

  • Planning ahead for a busy OND (holiday) season,
  • What weather holds and cold shipping could mean for sales cycles, and
  • How data can continue to enhance DTC sales and the DTC experience.

Strong OND Sales Could Mean Good Things to Come

Both reports noted that DTC sales were lowerer in 2023. This made for an unprecedented second year that DTC sales have dropped. But if you look closely, those sales numbers recovered in the fall, which is a good sign that DTC will not continue to slide. From the SVB report:

Reviewing the data…DTC sales have slowed since 2020 but are likely finding a comfortable bottom post-COVID, and we predict they should trend higher in 2024.

The report also noted there were strong holiday sales in 2023, meaning that wine is still popular for celebrations and gifts.

By the reports’ own admission, it’s hard to compare this data to previous years, as the data during the COVID pandemic and subsequent reopening is something of a rollercoaster. DTC had an artificial bump after lockdowns were announced, and that trend went away when restaurants re-opened. It is likely, then, that DTC sales are not down so much as “back to normal.”

Tip: No matter what the sales trends are, your winery should be prepared for peak holiday season (OND). Our holiday shipping checklist can help you plan ahead. (The rest of the article is helpful, too!)

Summer Holds Are Taking Hold

Part of the reason 2023 DTC sales appear to have been down might be slow summer sales. In both 2022 and 2023, there was a drop-off in DTC wine shipments, but shipments picked up again in the fall. The SOVOS report ties this to weather: 

The National Aeronautics and Space Administration (NASA) reported that summers in 2023 and 2022 were the hottest and fourth hottest summers, respectively, ever recorded in the United States and may well account for the decrease in shipments during those months.

This makes sense, and may indicate that more and more wineries are taking advantage of weather holds during the hot summer months. If that is the case, we would expect shipping to pick up in the fall, and orders would lag behind. That is borne out by the recovery of sales in October and November, so there might be something to this!

Tip: Wineries that want to stay competitive should check their own data to see if this trend holds for them, and then explore their own options with regard to weather holds and/or cold shipping.

DTC and Data Go Hand-in-Hand

The wine industry has finally caught on: Gathering and using data is the way to win when it comes to wine marketing. A decade ago, only 39% of wineries looked at their own consumer sales data; today, the number that look at that data for at least one aspect of their business is closer to 86%!

The SVB report notes that DTC sales is the one area leading the way here. Nearly two-thirds of wineries use active data management to make predictions and manage their DTC channels. This means that, for many wineries, the two go hand-in-hand and have become a critical part of their business.

The SVB report nicely summarizes the path the industry has taken, and where that path is naturally leading:

Having dedicated platforms designed for the wine business has always been challenging. Traditionally, we’ve had to cobble together disparate systems to manage our businesses professionally. However, we are now at a time when data management and AI are loaded into our platforms, helping us make discoveries, create information, and make decisions… This is an important opportunity for every businessperson to take advantage of.

Tip: If your business is fairly new when it comes to the data game, start by doing a post-mortem of the last holiday season and use that information to plan ahead. If you are already using data to your advantage, start learning about the next generation of technologies that are likely to influence wine sales and marketing: AI, NFTs, and gamification.

Want a deeper dive? Copper Peak Logistics has a decade of experience in the wine logistics and shipping industry, and we would love to discuss these trends and more with your team. Visit our contact page and we’ll get something on the calendar!