Annual Sovos ShipCompliant Direct-to-Consumer Wine Shipping Report shows a return to normalcy as pandemic buying patterns wane
(BOSTON) January 20, 2022 – On the heels of 2020, a year of both record-breaking growth in direct-to-consumer (DtC) wine shipping volume and extraordinary plunges in bottle prices, 2021 represents a return to relative normalcy, according to the latest Direct-to-Consumer Wine Shipping Report from Sovos ShipCompliant and Wines Vines Analytics. With total shipments surpassing the $4 billion mark for the first time, and the year’s relatively small increase in volume shipped coupled with an unprecedented 11.8% jump in bottle price, results resembled what would have been expected had the pandemic never happened.
Although the 1.4% increase in volume over 2020, to 8.5 million cases, represents the smallest year-over-year change in volume in the history of the report, the growth is still impressive against the huge gains that came in 2020. Plus, a record year-over-year jump in average price per bottle to $41.16 – its highest mark since the report was first published more than a decade ago – ultimately drove a 13.4% increase in DtC wine shipping value.
“In a reversal of trends from 2020, fewer consumers chose to ship less expensive wines to drink at home and instead returned to purchasing those wines while eating and drinking out,” said Larry Cormier, vice president, general manager, Sovos ShipCompliant. “And just as those buyers resumed what looked more like their pre-pandemic DtC purchasing patterns, 2020’s first-time buyers that stayed in the channel also adjusted their buying habits upward.”
In terms of value by region, it was stronghold Napa that drove the return to normalcy in DtC shipping trends. Napa shipments accounted for 45% of the value of the overall DtC shipping channel this past year, and the region’s $299 million increase in value of shipments over 2020 accounted for 60.3% of the entire increase in the overall channel’s value in 2021.
“While many regions experienced some level of growth in 2021, none were as impressive as Napa’s almost $300 million increase in value of DtC shipments,” said Andrew Adams, Wine Analytics Report editor at Wines Vines Analytics. “Increases in price per bottle shipped helped balance out the decreases in volume that some regions experienced, creating an overall increase in value for the West Coast.”
Other notable findings and trends described in the 2022 Direct-to-Consumer Wine Shipping Report include:
- Oregon’s multi-year boom in shipments continued in 2021: Oregon wineries, with their 12.9% year-over-year increase in volume and 18.7% increase in value of shipments, outperformed all other regions tracked in 2021.
- Kentucky broke out in 2021 following a new DtC shipping law: With a new law that went into effect in December 2020, Kentucky residents took advantage of 12 full months of newfound freedom by increasing the volume of shipments to the state by 244.8% over the month of sales in 2020.
- Larger wineries with lower price points saw smaller value gains: After dropping average price per bottle shipped by 17.3% in 2020, large wineries were unable to recover most of that drop, with only a 4.5% increase in price in 2021. However, now at 18.7% of total DtC shipping volume, these largest wineries have increased their volume of DtC shipments by more than 1,000% over the past decade.
- Top varietals remain: In 2021 the same five wines that have been most commonly shipped for the past decade remained in those top slots: Cabernet Sauvignon, Chardonnay, Pinot Noir, Red Blends and Zinfandel. Together, they accounted for 58.9% of all wines shipped and 71.8% of the value of the 2021 DtC shipping channel.
“As the world began to open back up, American wine drinkers became far more comfortable visiting wineries in person, returning to buying wine in-store, and imbibing at restaurants rather than solely at home,” said beverage alcohol consultant Danny Brager. “Yet, even while that was occurring, DtC Shipments remained exceptionally strong in 2021. Now as COVID-19’s impact on travel and tourism lessens, there is every reason to believe DtC shipments based on winery visitation and new club memberships will be strong in 2022.”
The Direct-to-Consumer Wine Shipping Report is an annual collaboration between Sovos ShipCompliant and Wines Vines Analytics, examining shipment trends from wineries to U.S. consumers. The proprietary data included is compiled from an algorithm measuring total DtC shipments based on millions of anonymous direct shipping transactions filtered through the ShipCompliant system and paired with Wines Vines Analytics’ comprehensive data on U.S. wineries, resulting in the most accurate depiction of the DtC wine shipping market.
To download the full Direct-to-Consumer Wine Shipping Report, visit dtcreport.com.
Sovos was built to solve the complexities of the digital transformation of tax, with complete, connected offerings for tax determination, continuous transaction controls, tax reporting and more. Sovos customers include half the Fortune 500, as well as businesses of every size operating in more than 70 countries. The company’s SaaS products and proprietary Sovos S1 Platform integrate with a wide variety of business applications and government compliance processes. Sovos has employees throughout the Americas and Europe, and is owned by Hg and TA Associates. For more information visit www.sovos.com and follow us on LinkedIn and Twitter.
About Sovos ShipCompliant
Sovos ShipCompliant has been the leader in automated alcohol beverage compliance tools for more than 15 years, providing a full suite of cloud-based solutions to wineries, breweries, distilleries, importers, distributors and retailers to ensure they meet all federal and state regulations for direct-to-consumer and three-tier distribution. ShipCompliant’s solutions reduce risk, lessen the burden of compliance, accelerate bringing products to market and enable revenue growth. With 60+ partner integrations, Sovos ShipCompliant leads a robust ecosystem of technology partnerships, enabling powerful complementary solutions. For more information, visit https://www.sovos.com/shipcompliant/ and follow us on LinkedIn and Twitter.
About Wines Vines Analytics
The Wines Vines Analytics team maintains the wine industry’s most accurate databases and provides data-driven analysis, data, insights and reports to help clients grow and manage their businesses. For more information visit www.winesvinesanalytics.com.
Amelia Wright, ARPR on behalf of Sovos ShipCompliant