Issue link: http://read.dmtmag.com/i/561374
w w w. v w m m e d i a . c o m S e p t - O c t 2 015 | V I N E YA R D & W I N E RY M A N A G E M E N T 8 9 DIRECT-TO-CONSUMER SALES If you're a small winery looking to break into domestic distribution channels, you'll find it tough doing it the traditional way, unless you've produced a very highly rated wine or created a unique demand for your product. As a result, small wineries have been reinventing themselves with direct-to-consumer (DTC) sales options and utilizing technology to reach out and touch the consumer. This includes events, wine clubs and mobile outreach, which accounts for a significant and growing volume of sales. In the 2015 Winery & Grower Benchmarking Survey, smaller winer- ies reported making between 40% to more than 60% of their sales volume through DTC sales channels. NEGOCIANT LABELS Continuing with the notion of wineries reinventing themselves to get distribution, the idea of a tra- ditional winery is changing. In the past, people built wineries, planted grapes and designed their labels. In 2014, the number of virtual or nego- ciant wineries in the U.S. grew by 23% to more than 1,200. Because you aren't investing in expensive fixed assets such as buildings, equipment, and vineyards, it's easi- er to get a label up and running very quickly. It's too early to see wheth- er these negociant wineries will survive long term. CHERRY-PICKED BRANDS The bigger wineries that have clout and can power through the market don't face as many difficul- ties as smaller ones, but they're still part of the shifting business land- scape, as they continue to grow by adding smaller wineries to their books. These larger producers can cherry-pick high-end brands that have cachet, and can offer enticing deals to the principals of these small, upscale family-owned wineries. Many of the principals at these smaller wineries are getting older and face having to borrow money to adapt, continued hard work, and In the 2015 Winery & Grower Benchmarking Survey, wineries making under 10,000 cases per year reported that DTC channels accounted for more than 40% of their sales. Source: Moss Adams 34% 34% 25% 22% 47% 53% 34% 7% 41% 59% 30% 36% 39% 27% 61% 64%