Is the Direct-to-Consumer Channel Holding Up?

The answer to the title question is yes, DTC is holding up, but as most in the industry will attest, it's a nuanced response that requires a discussion. 

Sign up for the 2024 annual SVB Direct-to-Consumer Videocast presented next Tuesday, June 25th, to hear an expert panel discuss the findings from the 2024 Direct-Direct-to-Consumer Survey.

What can you expect? After researching the wine industry for more than 20 years and producing this report for well over a decade, you can expect the same thing you always get: an honest and balanced view of the current direct-to-consumer market. 

Would you like a teaser? Take a look at the chart below. 

Sign Up for the 2023 SVB Direct to Consumer Report Release & Videocast

    Much better than some might think!

Wineries selling in the premium and direct to consumer sector have experienced positive outcomes. Looking back over the past three years: 

• 2020 was the toughest year for direct sales in the last ten years due to the COVID-19 pandemic. The closure of tasting rooms and restaurants made it difficult to sell premium wine. I'm glad we're past that whole mess! 

• 2021 was a huge rebound year for wineries selling direct. The rollout of vaccinations, reopening, and the early stages of travel normalization improved the market opportunity. Hospitality as a whole had a very good 2021 as you probably noticed with hotel prices soaring during the year.

• Compared to the best year of the decade, 2022 may not have been as good, but for those who sell DTC, business was still quite successful. By the end of 2022, the Peer Group Financial Database of Silicon Valley Bank reported that the premium segment had a sales growth of 13.8%, and three-quarters of wineries in that segment saw an increase in revenue.

• Narrowing down to the DTC channel, tasting room purchases increased in most wine regions. The wine club also accounted for a larger portion of sales for the average winery. Additionally, wineries producing under 5,000 cases reported that their direct-to-consumer sales continued to grow and now make up 81% of total sales. The average bottle price also saw growth, and most regions reported an increase in volume. This is especially noteworthy for the west coast, which experienced three consecutive years of light red wine yields.