Tasting Rooms Ain’t What They Used to Be


Dear Client:

For the average winery, direct-to-consumer sales make up about 61% of total revenue, and of that, nearly 80% is dependent on consumers to first visit the winery’s tasting room, according to Silicon Valley Bank’s annual state of the union report.

The problem is that tasting room visits have been on a downward trend for the past five years, particularly in Napa and Sonoma counties, according to evp and founder of SVB’s wine division Rob McMillan. Interestingly, tourism in those areas as well as the average amount spent at a tasting room per visit is on the rise.

Rob notes that Oregon, Virginia and New York wineries, “with lower-priced SKUs and tasting fees,” are experiencing better success.

Though tasting room visitation in some areas, particularly Oregon, is still growing well, “shifts in consumer behavior will be a growing concern,” according to Rob.

THE NEW WINE TOURIST. “Today, the consumer is redefining what a visit to wine country is all about,” writes Rob.

20 years ago the goal of a wine country trip was to taste and purchase wine, making four or even five winery stops per visit. The visit to wine country now is “no longer about the wine,” he writes. Younger consumers visiting wine country share an Airbnb and visit one or two wineries that typically offer the lowest tasting room fee and/or the best experience.

“Your winery needs to find new growth and new consumers, and they aren’t going to come from the tasting room approach,” writes Rob.

MOVING FORWARD. According to Rob, the growth opportunity for small wineries moving forward is in:

  • Getting exposure to consumers who live elsewhere
  • Finding ways to sell to them–digitally and in person–where they live
  • Building the brand regionally by evolving the concept of experience, such as virtual tastings, online video streams etc.

ANOTHER GROCER ENTERS BOOZE DELIVERY GAME

Missouri-based Schnucks is the latest grocer to start delivering alcohol alongside groceries. Schnucks has expanded its partnership with Instacart to include alcohol delivery, per a local news affiliate.

Consumers in Illinois and Missouri can order beer, wine and spirits from Schnucks Delivers seven days a week and receive their order in as little as one hour. The fees tacked on to alcohol delivery fall between $2-$10.

Several other grocers have entered alcohol delivery or doubled down in the space recently including: Kroger recently partnered with Los Angeles-based wine delivery service Drinks Holdings Inc to offer home wine delivery in 14 states; Texas-based HEB also started delivering beer and wine throughout Texas in June; Michigan-based Meijer expanded its alcohol delivery service to Ohio through Shipt; and Wal-mart expanded grocery delivery to 40% of the US.

WSD BRIEFS:

FOLIO FINE WINE PARTNERS ADDS MAISON CHAMPY TO PORTFOLIO. France’s Maison Champy has appointed Folio Fine Wine Partners as its national importer and sales and marketing partner, effective March 1, per a release. This marks Folio’s first wines from Burgundy. Folio will represent 15 wines from the Maison Champy portfolio ranging in price from $30 to $550 a 750 ml.

CARDINAL SPIRITS LAUNCHES COPACKING DIVISION. Indiana-based Cardinal Spirits has launched Cardinal Copacking, a contract and private-label bottling service that targets small and mid size bottling and private label clients, per a release. Cardinal Copacking offers full copacking services from flavor development to TTB regulatory approval to distribution guidance. The distiller has been copacking for other brands since opening in 2015, and the company decided to create a separate division to keep up with growth.

Until tomorrow,
Sarah

“You can never plan the future by the past.” – Edmund Burke  

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