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Winery Execs On Dtc Version 3 Tier Sales Growth

Posted: Oct 16, 2019



Despite yesterday's coverage that wine volume trends may be in trouble see WSD 10-14-2019, the majority of wine producers 85% are projecting revenue growth and 75% are projecting greater profitability, according to the Wine Industry Financial Symposium's annual executive survey.

REVENUE DRIVERS & CHALLENGES. The survey breaks respondents down between large (more than 100,000 9L cases) and small producers (less than 100,000 9L cases).

For small producers, the top revenue driver was increased management of consumer relationships at 37%. The top revenue driver for large producers was increased management of three-tier relationships at 30%.

Revenue drivers differ, but both large and small producers face similar challenges. The top challenge being cost and availability of labor, followed by brand proliferation and three-tier price inelasticity.

3-TIER SALES V. DTC SALES. Direct-to-consumer wine sales has been a hot topic recently. As such, the survey breaks down winery sales between what's sold through the three-tier system compared to DTC sales.

Nearly 40% of respondents said three-tier sales growth continued upward year over year. About 12% said sales are up but sales growth declined; 28% said sales are on par and just over 21% said sales have declined.

Comparatively, more than half of respondents (52.7%) said DTC year over year sales growth continued upward, with just 12% saying sales have declined.

Overall, California is by far the No.1 state by sales (three-tier + DTC), followed by Texas and Florida. New York, Washington and Oregon also made the list.

October 15, 2019 
Source: Wine & Spirits Daily



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