The numbers are in and, as expected, 2012 was another banner year for winery direct-to-consumer shipping. American wineries shipped nearly 3.2 million cases of wine directly to consumers’ front doors in 2012, at a value of $1.46 billion.
That’s a 7.7 percent increase in volume and a 10 percent increase in value over 2011. Not only are Americans buying more wine straight from the cellar, we’re buying more expensive wine—at an average price of $38.42 per bottle, up from $37.63 in 2011 and $36.56 in 2010.
$1.46 billion, with a B, is an eye-popping sum. But these numbers, presented in an annual report issued in April by ShipCompliant and Wines & Vines, shouldn’t surprise anyone who’s been following the decade-plus-long fight to make winery direct shipping legal across the United States. Today it’s permitted in 39 states, and a look at a few newcomers confirms that wine lovers love having the option to buy straight from the winery, especially smaller wineries that aren’t carried by local wholesalers.
In Maryland, where direct shipping was legalized in mid-2011, direct sales increased 179 percent in 2012, to $15.6 million. (A report by the state’s comptroller found the practice beneficial to both consumers and the state’s coffers.) In Tennessee, shipments to consumers, legalized in 2009, increased 24 percent in 2012 on the heels of a 44 percent spike in 2011.
California remains both the No. 1 producer and consumer of direct-shipped wines. Thirty-two percent of all wine shipped directly from wineries in 2012 ended up in the hands of a Californian, and Golden State wineries shipped more than 2.6 million cases of wine directly to U.S. consumers last year. Napa alone accounted for 33 percent of direct sales by volume and 49 percent by value, with just over 1 million cases sold at a value of $714 million, or nearly $57 per bottle.
Washington, however, made the most substantial gains in 2012, surging past Oregon. Direct sales from wineries outside the Big 3 states of California, Oregon and Washington are also picking up at an accelerated clip.
|Region||2012 Cases Shipped||Percent of Total Volume||Percent Volume Change||2012 Value of Wine Shipped||Percent of Total Value||Percent Value Change||Avg. Price/ Bottle|
|Rest of California||899,044||28.3%||3.9%||$296 million||20.2%||6.2%||$27.48|
|Rest of U.S.||340,387||10.7%||23.7%||$72 million||4.9%||31.2%||$17.68|
So what are we buying direct from all these wineries? Cabernet, of course, although America's most popular wine was one of the only categories, along with Merlot and Riesling, to see a dip in both volume and value. Direct Pinot Noir sales, on the other hand, saw some of the largest gains, with Sonoma leading the way. Sonoma Pinot sales rose 32 percent in value, to $89 million for 155,000 cases sold direct. After Cabernet and Pinot Noir, red blends, Chardonnay, Zinfandel and Syrah round out the top 6 in volume shipped.
|Grape||2012 Cases Shipped||Percent of Total Volume||Percent Volume Change||2012 Value of Wine Shipped||Percent of Total Value||Percent Value Change||Avg. Price/ Bottle|
*2012 was the first year for which red blends were tracked as a separate category.
Making even bigger strides than Pinot Noir were rosé and sparkling wine. The volume of sparkling wine sold was up 20 percent in 2012, and rosé sales rose 23 percent in 2012, representing a 53 percent increase over 2010 rosé sales.
On the surface, $1.46 billion is the kind of number that might confirm every fear wholesalers have about direct shipping, and explain why they’ve fought it at nearly every turn. But a look at the type of wineries selling direct to consumers indicates direct shipping poses no threat to the three-tier system.
Large wineries—defined as those making more than 500,000 cases of wine a year—are wholesalers’ bread and butter, and they sold just 0.1 percent of their production directly. That total of 143,000 cases accounted for less than 5 percent of the volume of winery direct sales in 2012. Small wineries—those making 50,000 cases a year or less—accounted for more than 65 percent of direct wine sales volume, worth more than $1 billion, or over 75 percent of the market value.
It’s all good news for wine lovers and the wine industry. Americans have more wines than ever before to choose from, and they’re buying more of them than ever before. In fact, for the first time, Americans spent more on direct wine purchases in 2012 than the rest of the world spent on U.S. wine—last year's domestic exports were valued at $1.43 billion, a 3 percent rise over 2011.
If winery direct shipping is legal where you live, have you taken advantage of it yet? And if so, how do your direct-shipping purchases compare with your traditional wine-buying habits?