U.S. Wine Sales Led by Value Increases

Sonoma overtakes Napa in DtC shipment volume as total DtC grows 14%

by Peter Mitham
Sonoma County wineries edged out those in Napa County in total DtC shipment volume, yet with an average per bottle price of $65, sales of Napa wine still account for 46% of the entire DtC market.

San Rafael, Calif.—September saw 3% growth in the value of U.S. wine sales, as consumers traded up in value while paring back on volume. The trend appeared across multiple channels, underscoring the strength of the economy.

Direct-to-consumer (DtC) shipments posted the strongest growth in September, driven by the arrival of the cooler weather that invites shipping. Wines Vines Analytics/ShipCompliant by Sovos reported that shipment value rose 14% from a year earlier to $252 million, while volumes increased just 9% in the period to 537,446 cases. The faster growth in value versus volume pointed to the movement of more consumers to more expensive wines; indeed, the average bottle price increased 5% from a year ago to $39.12.

Bearing out the trend were inroads by the regions producing some of the country’s most expensive wines, Napa County and Oregon. The most expensive DtC shipments flow from Napa, where the average bottle shipped is worth $65; in Oregon, the average bottle shipped is $39, on par with the national average. The latest 12 months saw Oregon post the strongest DtC growth of any region at 28%, to $178 million. Napa, while logging the smallest growth at 7%, did so off a commanding lead over every other region, with total shipments worth $1.3 billion.

The exception was Sonoma County, the one region in the latest 12 months to see case volumes grow faster than shipment value. Sonoma wineries led the channel with shipments increasing 27% to 1,776,913 cases, pushing Napa into second place with a case volume of 1,726,309. Sonoma’s rise accelerated this year, manifesting first in January before becoming firmly established over the summer. Sonoma wineries shipped bottles worth an average of $29 apiece, down just 3% from last year, for total shipment value of $622 million. This represents 21% of the channel, up a percentage point from last year and ranking second only to Napa, which claims a 46% share of the channel.

Off-premise sales decline by 1%
Similar to DtC shipments, sales through multiple-outlet and convenience stores tracked by market research firm IRI in the four weeks ended Sept. 9 saw their average value increase. Sales in the period totaled $659 million, down 1% from a year ago and volume declined 3% to 8.3 million cases. Consumers may have been buying less, but they chose pricier wines than last year. The shift favored domestic wines, with sales at $25 and up increasing 11%, and those at $20-$24.99 rising 10%. Close behind were sales at $15-$19.99 a bottle, which rose 9%.

While sales of imports also increased, the biggest growth was seen in price segments below $25. The $15-$19.99 price segment led with 17% growth, followed by 11% growth in both the $11-$14.99 and $20-$24.99 price segments.

Trading up among consumers helped lift U.S. wine sales 3% to $3.8 billion in September, part of a better set of trends noticed by market research firm bw166. Both table and sparkling wines increased 3% in the month versus a year earlier, rising to $3.6 billion and $194 million, respectively.

Total U.S. wine sales increase 6%
Total wine sales in the U.S. rose 6% in the latest 12 months to $70.5 billion. The latest 12 months saw domestic wine sales rise 5% to $47 billion, led by 4% growth in table wines and 3% growth among sparkling wines. Packaged imports increased 8% in the period to $23.5 billion, adding $1.8 billion in sales, but this was topped by an additional $1.9 billion in sales of domestic table wines.

Growth in bulk imports, a component of domestic wine sales, was muted. The segment increased 12% in the latest 12 months, representing 6% of value, but rose just 3% in the latest month, when it accounted for a scant 1% of value.

With the phrase “inventory management” cropping up in conversations with sources during this year’s harvest, which is expected to be one for the record books all along the West Coast, lower demand for imported bulk wine isn’t surprising.

Nor is the demand for winemaking positions, with Winejobs.com's Winery Job Index reporting a 57% increase in demand for production staff in September. The sub-index for the category rose to 161 in the period, and represented the strongest single area of demand.

General administration and other positions gained 44% to an index reading of 390, the highest of any subcategory. Direct-to-consumer positions posted the greatest decline, with demand falling 21% to an index level of 343. Sales and marketing positions also fell, declining 14% to an index level of 148.

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