Over the years we’ve made various predictions about where the wine industry was going, especially when it came to DTC wine shipping, tasting rooms, and wine sales and marketing generally. And while events of the past few years have definitely made things more interesting, we can say confidently that, no matter what events are in the news, the underlying fundamental forces are always at work.
Think of it like a small boat caught in the Gulf Stream. A storm might come by and toss the boat to-and-fro, and could even move it several yards off course. But, ultimately, the flow of the Gulf Stream wins, and the boat is carried along that same course.
The wine industry has been the same way. What looked like temporary waves now look like strong undercurrents that have been there for some time, and will continue to operate. Here are five such undercurrents that continue to define the wine space midway through 2022:
Tastings “By-Appointment-Only” Are Forever Part of the Landscape
The common story is that the majority of wineries started doing tastings “by-appointment-only” in response to the COVID-19 pandemic (along with a number of other ideas). But we have been seeing a rise in by-appointment-only tastings and a decrease in non-appointment club sales since at least the end of 2018 (see our eBook on where wine shipping and fulfillment is headed).
So this trend has been around for a few years, and it’s not going away with the easing of COVID restrictions. Tastings by-appointment are now a permanent part of the landscape.
Virtual Tastings, Not So Much
While some wineries toyed with virtual tastings in the past decade, people thought there would be a large-scale shift to these with the pandemic, akin to the shift to work-from-home/remote work.
What we actually saw was a mixed bag. A lot of people on social media called out these tastings, citing how boring they were. But there were some winners out there too: Virtual tastings worked well for niche wineries that were truly offering something unique.
So while we don’t expect virtual tastings to resurge any time soon, we do expect to see some players do this well and make it part of their selling proposition.
DTC Continues To Be Extremely Important
While DTC sales spiked during the COVID lockdown, we still are not seeing the slowdown that some people predicted would come with the easing of restrictions. Consumers have realized that they like buying wine this way, and they aren’t simply “switching back” to older buying patterns. This was reinforced in the recent Sovos ShipCompliant/Wines and Vines Analytics 2022 Mid-Year DTC wine shipping report.
Corporate gifting is a great example of this. When workplaces went into lockdown and remote work became the norm, holiday parties and corporate gatherings were canceled, too. In place of parties, many companies decided to send gifts instead—and wine is still one of the most common corporate gifts given each year.
Overall, DTC sales represent about 10% of total wine industry sales in the U.S., according to the latest Silicon Valley Bank State of the US Wine Industry Report. It also accounted for 65% of the average winery’s total revenue in 2021. But perhaps most telling, 2021 sales exceeded every monthly benchmark from 2020…again proving our point that DTC growth is here to stay.
DTC Strategy Will Have a Bigger Effect On Wineries
DTC strategy is also extremely important here in 2022. When a large percentage of a winery’s sales are DTC, even small tweaks to efficiency can have a large positive effect. (And likewise, small problems can too easily multiply.) To get started thinking about your DTC strategy, we recommend the following articles:
- How Should Wineries Structure Their Shipping Deals? 8 Awesome Ideas
- Deciding on a Weather Hold
- Copper Peak’s Recipe for Peak Holiday Shipping Success
- 5 Marketing Fundamentals for Smaller Wineries
Having a Strong Team Supporting You Is More Important Than Ever
A team’s knowledge and experience make a huge difference when it comes to running your business like clockwork. Business owners know this to be true of finances, marketing, and other business functions. And it is especially true when shipping and logistics are involved.
As online and DTC sales continue to be a prime source of revenue for the industry, knowing how to set the schedule for success and meet customer expectations will be crucial—and it takes a strong team to do that for you. If you are not getting the appropriate level of service from your 3PL or internal team, it might be time to do a little comparison shopping before 2022 is over.