Direct-to-consumer (DtC) wine shipments dropped by 10.3% in volume and by 1.6% in value in the US in 2022, according to the latest report from Sovos ShipCompliant and Wines Vines Analytics.
It’s the first drop in drinkers buying wines direct from US wineries in the report’s 13-year history. Yet DtC still accounted for around 12% of the total retail market (off-premise) for domestic wines, level with 2021.
‘After the all-time high of $4.2bn in value that the DtC shipping channel experienced in 2021, the declines seen in 2022 were not that surprising,’ said Andrew Adams, Wine Analytics Report editor at Wines Vines Analytics.
DtC sales soared in 2020 and crept up further in 2021, reflecting a shift to at-home drinking amid Covid-related restrictions.
In 2022, ‘consumers were spending much more time in restaurants and bars as the on-premise sector rallied’, Adams said.
Economic factors also played a role.
The report said, ‘The impacts of an inflationary economy, budget tightening by consumers, increased costs for wineries of goods, services and debt, combined with consumers redirecting their consumption patterns, all led to a contraction in the DtC wine shipping channel in 2022.’
The top five states, by volume of shipments, were:
- New York
The average price of a DtC wine shipped last year was $45.16 per bottle, up by nearly 11% versus 2019 and by 9.7% versus 2021, the report said.
Wineries appeared to have increased prices, partly to help deal with supply chain costs and also to reverse discounts from the first year of the pandemic, it said.
‘Some buyers of lower priced wines responded by decreasing or ceasing their purchases altogether,’ said the report.
Wines under $30 per bottle, representing 46.3% of all wine shipped DtC in 2022, saw a decrease in volume of 17.5% in 2022 versus 2021, according to the report.
Its outlook stated that it expected the average bottle price of DtC wines to rise again in 2023.
Luxury wine still growing
Demand for luxury wines continued growing in 2022.
DtC shipments of wines at $100-a-bottle or above rose by 7.8% in volume, following growth of 34.2% in 2021.
With a return to pre-pandemic market conditions, buyers at this level ‘are likely better equipped to withstand the impact of inflation and increasing costs of living’, the report said.
Cabernet Sauvignon and Pinot Noir lead the way
Cabernet Sauvignon was the most-shipped varietal wine in 2022, with Pinot Noir in second place, the report said. Total Cabernet DtC sales by volume still dropped 7.2% but rose by 5.7% in value during the year.
In 2022, the average price per bottle of Cabernet Sauvignon shipped from Napa County wineries to consumers was $131.48, the report said.
Looking ahead, the report highlighted analysis showing that wine consumption in the US is under pressure amid data suggesting younger generations aren’t embracing wines to same extent their parents did.
On the regulatory side, DtC shipments to Kentucky rose by 18.1% in volume and almost 50% in value in 2022, the second full year of the state being open to the sector.
There are likely to be fewer boosts from ‘newly opened’ states in future. ‘Each of the five states that still either ban or severely limit wine shipments to consumers rank low for both population and wine consumption,’ the report said.