Wineries Need to Read This Before Doing Their Strategic Planning for 2020
02.19.2020  |  by Milton Cornwell

This is the time of year when two things happen in our industry: One, several important reports about the wine industry and DTC wine sales come out; and two, wineries are trying to formulate their strategic plans for the year based on those reports.

While we here at Copper Peak would never discourage anyone from becoming better informed, we understand that poring over a handful of reports to find those important “nuggets” of knowledge takes timetime you often don’t have.

That’s why we’ve done it for you!

For your convenience, and that of our clients, we present here the most important takeaways from the SVB State of the Wine Industry 2020 Report (and podcast), the Sovos ShipCompliant 2020 Direct to Consumer Wine Shipping Report, and the Direct to Consumer Wine Symposium…as well as our own take on what’s happening in the industry.

Highlights of the SVB State of the Wine Industry 2020 Report and Podcast

While the industry is paying more attention to strategies and tactics around DTC, which continues to show sales growth, it’s becoming clear that DTC strategies need to expand beyond the typical tasting room and club models. These are now limiting growth, especially for the smaller family-owned wineries.

Indeed, for luxury wines, DTC sales represent 60% of total sales. When we break down that number, we find that 28% of sales are from the tasting room and 23% of sales are from wine clubs. These numbers have not changed much from previous years. With regard to DTC sales, the report notes:


[W]ith only seven states still prohibiting direct shipment of wine to consumers, the potential expansion of direct sales from the opening of new states to direct shipping is now more limited than in the past decade. Growth in this segment will come from new subscription models and from wineries growing their sphere of influence and taking their direct sales efforts and winery experience on the road.


Why limited? Because the experience of wine is so much more than just the experience in the tasting room. Again per the report:


The problem is that the whole evolution of the concept of “experience” within the equation was immediately stunted when the wine industry defined it as being synonymous with the tasting room experience and nothing else. All of the focus on value and brand creation has since fallen on the tasting room and wine club, to the exclusion of other strategic options… Consider this critical question: In an increasingly digital world, what industry would insist that its consumers first physically come to its place of business to buy its wares? That is what wineries insist on today with the current tasting room and club models. How many cars would Detroit sell if they demanded that people come to Michigan to pick up their car?

Indeed, we here at Copper Peak have been writing extensively on experience outside of the tasting room and within the process of delivery itself. Interested readers should see:

Highlights from the Sovos ShipCompliant 2020 DTC Wine Shipping Report

Just as the SVB State of the Wine Industry Report noted (above), the Sovos ShipCompliant 2020 report found that the growth of the direct-to-consumer shipping channel slowed in 2019, largely due to the fact that no new states opened to fuel rapid expansion. Increases in DTC revenue were largely due to increases in the per-bottle price, with a 2.5% increase in the average price per bottle shipped. This is the largest average price per bottle increase since 2011.

Indeed, the report predicts that:

The days of 13% to 18% increases in the DTC channel are likely over for the wine industry. Going forward, we expect expansion in DTC wine shipping to be driven by similar conditions as other luxury goods: the state of the economy, demographic trends, sales and marketing innovation, and continued consumer migration from brick and mortar to online purchases.

Likewise, the trend of increasing prices and premiumization is likely to end, too. The average price per bottle has risen significantly in the past few years, and it’s quite possible that the ceiling has been hit, especially with slowing sales generally and a surplus of supply.

What wineries can expect is increasing competition from craft beers and spirits, as producers of those beverages are increasingly turning their attention to direct shipping as those markets mature.

To stay competitive, wineries will need to find ways to reach out to new markets and offer them a much simpler, more engaging DTC experience. To that end, we recommend reading:

Highlights from the DTC Wine Symposium 2020

Many of the keynotes and sessions from the Symposium gave a preview of the information that came out in the above reports. What was unique, though, was the forward-looking nature of many of the keynote speakers, especially when it came to technology. Chatbots, CRM systems, social media, and AI were all discussed in the context of new ways to build relationships with consumers in real time.

There was also a great round-up of legislative news by Steve Gross, who is a favorite in our Copper Peak expert series. (You can read our most recent interview with Steve here.)

For those interested in the turns that technology is taking in our industry, it would be well worth your time to catch up on the following:

The Copper Peak Take

Much of what is in these reports echoes what we’ve been seeing in the industry as well, as you can see in our own recap of 2019 here. We offer three pieces of advice to savvy wineries as they prepare for the rest of 2020:

    1. Get your partners in on your planning. From grape growers to fulfillment experts like us, your business partners will have ideas as to how your winery can achieve better efficiency. Reining in something as simple as shipping costs or getting serious about marketing spend can be the deciding factor for your business in 2020.
    2. Strategize as to how you are going to reach all generations. Yes, millennials have not taken to wine as we’ve hoped. But it’s not a matter of less spending power; the industry needs to figure out how to tackle their health concerns, their environmental consciousness, and their love of novel craft beers and spirits. And let’s not forget that there’s a lot of opportunity in Gen X and Gen Z, too.


  • Be ready to innovate. We as an industry are hitting the limit of what we can do with older models. Be prepared to try new things, whether that means a new product, a new twist on your tasting room, a new sales channel, or a new message. There’s a hunger for something new, and smaller wineries especially are agile enough to capitalize on that.


What Now?

This is the time of year for research and review. In the spirit of cooperation, we’d love to help out your winery, especially when it comes to planning your own DTC sales strategy.

You can start by giving us a call or using our handy contact form.