Market Watch, September 2018
Going30 MARKET WATCH MARKETWATCHMAG COM SEPTEMBER 2018fter years of legal battles public rela tions campaigns and development of new technologies direct shipping of wine is now mainstream in much of the United States Last year volume of direct shipped wine was up 153 to 578 million cases with consumer spending growing 155 to 269 billion according to the 2018 Direct to Consumer Wine Shipping Report by Sovos and Wines Vines The channel continues to gain steam this year and is on pace to eclipse 6 million cases and 3 billion in sales by year end to reach nearly 2 of the U S wine market in volume and 5 in sales And those figures include only wines shipped directly from wineries to consumers not wines shipped from retailers to consumers which pass through the supplier and wholesale tiers Those sales according to Wine com are esti mated at a further 1 billion Direct shipments from wineries known as direct to consumer DTC are now clearly part of the wine selling landscape partic ularly for smaller wineries Since the Granholm v Heald U S Supreme Court decision back in 2005 the number of states where wines can legally be shipped has risen from 31 to 46 Thats been a steady drumbeat notes Larry Cormier general manager of Ship Compliant by Sovos Technology is making it possible for people to enjoy the business of direct to consumer and its also being used by the states to gain greater visibility into transactions Limited production players less than 1000 cases annually make up 42 of sales while wineries making between 1000 5000 cases comprise a 38 share according to ShipCompliant by Sovos Medium size wineries 50000 500000 cases currently account for 23 of the total value of the channel and saw their direct to consumer sales rise 37 last year Pennsylvania recently embraced interstate direct wine ship ping and DTC sales have been growing fast ever since Last year was the first full calendar year for direct wine shipments in the Keystone State and it became the nations No 10 DTC destination by volume and No 11 by value Act 39 of 2016 which included the most comprehensive changes to the Penn sylvania Liquor Code since Prohibition opened the door to a new direct wine shipping industry in Pennsylvania begin ning in August 2016 says Pennsylvania Liquor Control Board PLCB chairman Tim Holden Pennsylvanians can now order up to 36 cases annually per producer to be direct shipped to their homes from more than 1000 licensed direct wine ship pers In the second half of 2016 some 59000 cases of wine were shipped into the state and in 2017 that number jumped to 152000 cases valued at 57 million according to the 2018 Direct to Consumer Wine Shipping Report Its a far cry from two decades ago when the DTC channel was all but nonexistent and wineries struggled to get on distributors AConsumers have made direct shipping an increasingly vital part of the wine buying landscape BY CAROL WARD AND KEVIN BARRY ILLUSTRATION BY HANK OSUNA DirectMW0918_
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