Back to Paper 4: This week, we’re focusing on the consumer, specifically direct-to-consumer (DTC) sales.
2018: Where are direct to consumer wine sales increasing and why?
It’s essential here to define DTC — as narrow as winery-direct sales, extend to include more club models and mailing lists? There’s also a need to include relevant market data (for the US: the SOVOS Direct to Consumer Report provides annually updated data). For example, many US wineries sell DTC; but did you know the DTC model accounted for 10% of domestic US retail wine sales in 2017, totaling nearly $2.7 billion (+15.5% annual growth)? [SOVOS 2018] The report predicts that primary growth in off-premise sales will continue to be from DTC channels, as the wine industry as a whole evolves, e-commerce continues to grow, and regulations adapt. Just look at how industries have led that trend (Warby Parker for glasses, Harry's razors, etc.) The Australian winery-direct/cellar door sales industry is enormous as well and important to look at as well.
Knowing data from multiple markets (think back to our China question!) would be necessary as well, as well as whether you’d include other models like wine clubs (Viticole, Winc) and mailing lists (Hawesko in Germany runs massive mailing list programs, buying directly from wineries and selling to consumers — would you include this in your scope?) How do direct to consumer wines sales impact the more traditional channel sales? How are non-domestic brands impacted? What’s the benefit for a large versus small brand? How does legislation impact these sales (shipping is big!)?
Given some of these prompts... How would you define your terms and scope? What examples would you look at? Looking forward to responses!
Sabrina Lueck Kelli White
Chiming in on Ontario DTC. There is DTC from many Ontario wineries to Ontario consumers and many Ontario wineries have wine clubs as well. There is some DTC non-Ontario wine as well. Wineonline WineAlign, Gargoyle all ship cases of mixed wine. It’s a grey area. Technically, LCBO and some grocery stores are the only place where you can buy individual bottles of wine.