Restaurant Wine Sales Collapsing for Small Wineries

      I Will Always Love You

Every credible measure that I see regarding restaurant wine sales is trending negative for the small family-run wineries. Why? What's behind the declining trend? Economics? Changing consumer attitudes? Conspiracies from wholesalers? Big wineries displacing the small ones? It's not due to a lack of desire from restaurant owners.

Restaurateurs love the wine business. The business is worthy of their love because it enhances the enjoyment of the food served to their customers. It's practical for the restaurant trade to love wine because restaurants themselves make better margins on bar sales compared to food sales. Wine for the restaurant trade is still an important part of success, but sales opportunities to restaurants are collapsing for small wineries.

Replay: SVB Direct to Consumer Survey

We had a good time on set delivering several perspectives on the SVB/WBM annual Direct to Consumer survey. For those aficionados of our surveys and telecasts, you might note a shift in the title but it's just reflective of how we've evolved the survey questions.

We used to call this survey the Tasting Room Survey but over time we started to realize tasting rooms were only part of the formula for success, so we started asking more questions about wine club metrics. Now we have several years of benchmarks from which we can determine trends in clubs and in tasting rooms.

SVB Annual DtC Benchmarks

Direct to Consumer sales now represent 60% of the average winery's revenue, but the real growth in direct sales has only taken place over the past decade, dramatically accelerating in the past 5 years. While it might seem like wineries have been doing this for a long time, it's difficult for me to say direct sales have been a professional discipline.

In 2013 I published one of my more popular posts addressing the problem the industry faced in finding good Direct to Consumer Managers. Since it was a new discipline, it wasn't possible to find experienced managers. That is starting to evolve with time, but we are still scratching and clawing our way to direct sales success, learning from each other as we go and playing a little bit of follow the leader. Some of that is good and some not so good which underscores the importance of data.