US wineries are selling record amounts direct to consumers

A record $3bn of wine was shipped directly from US wineries to consumers in 2018, but the pace of growth has slowed, according to a new report.

  • Direct-to-consumer shipments have doubled in value since 2012
  • Americans’ thirst for rosé still strong
  • Shipments of wines above $100 rise by 18% 

New figures show the value of direct-to-consumer (DTC) shipments for the year rose by 11.6% to a record $3bn, said a report by Sovos and Wines Vines Analytics. That means the market has doubled in value since 2012.

In volume terms, DTC shipments rose by almost 9% versus 2017, to 6.3 million nine-litre cases.

That means 10% of the off-premise wine retail market, outside of bars and restaurants, is now direct-to-consumer sales, said the report’s authors.

However, the pace of growth slowed in 2018 versus the seven-year average.

Growth highlights      

Wineries in Oregon and Sonoma County led the growth, with Oregon rosé helping overall rosé shipments to rise by 24% in volume and 29% in value for the year.

This suggests the rosé trend is alive and well in the US, even though the category was still only 3.6% of all DTC shipments in 2018.

‘Rosé is now the eighth most commonly shipped wine by American wineries, which is remarkable given that in 2011, it was the least popular wine tracked in this report,’ said the authors.

‘On the other side of the ledger, Moscato shipments have plummeted [in 2018],’ they said.

There was more evidence of consumers willing to pay higher prices.

Wines priced at $100 and above increased DTC shipments by 18% in volume. These wines accounted for 6% of the DTC market in volume terms in 2018, up from 4.3% in 2011.

The market share for wines under $30 has fallen in that time, but was still just over 50% in 2018 following 6% growth in shipments in this category for the year.

More key figures

Several important states, including New York and Illinois, underperformed against the overall growth rate in volume terms.

Oklahoma was the only state to begin allowing DTC shipments in 2018, from 1 October. It saw $4.3m-worth of wine shipped by the end of the year.

Oregon grew strongly as a destination for DTC shipments, up by 24.5% in volume versus the previous year.

California accounted for 30% of all DTC shipments by volume in 2018, following a 10% rise, and for 32% of shipments by value, up 11%.

Competition on the rise?

As noted by the report’s authors, a current case before the US Supreme Court has the potential to open up interstate shipping for wine retailers, which may compete with wineries’ DTC sales.

The authors also noted that the ‘subscription economy’ was bringing more players into the direct shipping market, from independent wine clubs to on-demand delivery.

The authors predicted that the DTC market would continue to grow in the next few years, but at a slower pace.