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Table 3 shows that the average CAGR is higher for the Pacesetter wineries than the other categories regardless of whether growth is measured by revenue growth or production and sales case growth. The data in Table 3 supports the notion that the Pacesetter wineries grow faster. DRAWING CONCLUSIONS We examined the hypothesis that wineries with more than 50% of their sales direct-to-consumer are more profitable and grow more quickly than other wineries. We tested it by looking at profitability in terms of GPM and ROA and by looking at the growth rate of Pacesetter wineries compared to the growth rate of the other categories. We found that the Pacesetter wineries have a GPM of 64% and ROA of 9% compared to 54% GPM and 7% ROA for the Reactives, and 53% GPM and 4% ROA for the Classics. The CAGR of net cased goods revenue across the time period is 14% for the Pacesetters compared to 6% for the Reactives and 3% for the Classics. We concluded that the Pacesetter wineries are, in fact, more profitable and grow faster than other wineries. So the answer to the opening question is fact. These results mean there is empirical evidence to support the common perception in the wine industry that higher DTC sales lead to higher winery profitability and growth. Douglas Jordan, Sandra K. Newton and Armand Gilinsky Jr. are visit us online www.vwmmedia.com professors of business at Sonoma State University. Dan Aguilar is senior vice president of the Silicon Valley Bank Wine Division in Santa Rosa, Calif. Comments? Please e-mail us at feedback@vwmmedia.com. 94 V I N E YARD & WINERY MANAGEMENT | May - June 2013 w w w. v w m m e d i a . c o m