Food & Drinks

Direct-to-Consumer Wine Sales Drop After Pandemic-Era Peaks

As alcohol shipping regulations have evolved across the United States in the past several years, so have direct-to-consumer (DTC) wine sales. While business exploded during the pandemic in 2020 and 2021, wine shipments are beginning to decrease significantly.

Wine DTC sales volumes decreased by a dramatic 10.3 percent in 2022 while dropping 1.6 percent in value over the same period, according to a new report by SOVOS ShipCompliant and Wines Vines Analytics. Economic inflation and lessened demand, among other factors, contributed to an overall “challenging” year for wine shipments.

The annual report is based on data from over 41 million total shipments from 1,300 wineries in the United States. It’s then scaled to account for the overall wine industry in the United States using a model that’s a “near census of U.S. wineries.”

This marks the first time the report has recorded a decline in DTC wine sales.

For the second year in a row, the average price for a shipped bottle of wine has also increased “significantly,” amounting to a 9.7 percent increase year-over-year in 2022. It increased by a whopping 11.8 percent in 2021, signaling a slight slowdown in this upward trend. Such inflated pricing of DTC bottles, however, is expected to carry into 2023.

While wines with an average price of under $30 saw the largest sales decline, bottles priced over $100 actually increased in sales volume and value. Going into 2023, the report states that the latter is “best positioned to maintain or increase their share of DTC wine shipments.”

Direct wine shipments accounted for 12 percent of all off-premise sales in the domestic wine sector last year. Shipping accounts for roughly $4.1 billion in sales, out of a total $34.3 billion.

Despite these slowdowns, Cabernet Sauvignon performed slightly better than other varieties; Cab’s shipment value rose by 5.7 percent, while sales volume decreased by a modest 7.2 percent.

It’s possible that online wine sales are simply falling out of fashion. In late 2022, Winc — a prominent DTC wine club aimed at younger, tech-savvy consumers — announced bankruptcy and identified a stalking horse bidder.

As for this year’s DTC sales, only time will tell.

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