DtC wine sales adapt to COVID-19 business conditions

Image: Rachel Triggs.

Australian wine direct-to-consumer (DtC) sales in 2020–21 are reported to have grown by 17 per cent in value and 14% in volume, compared with the previous financial year, outperforming other sales channels according to Wine Australia’s Wine Direct-to-Consumer Survey Report 2021.

Across all DtC channels, the average retail sales value for survey respondents in 2020–21 was up 3% to $239 per case.

Wine Australia general manager, corporate affairs and regulation Rachel Triggs said that this was a positive response given the difficult conditions for businesses in 2020–21.

“Survey respondents reported that overall wine sales grew by just 1%, so it was particularly pleasing to see a significant increase in DtC sales this year,” said Triggs.

Online and cellar door sales were reported to have had the strongest value growth of the DtC channels in 2020–21.

The survey showed cellar door sales revenue grew by 22%, while online sales grew by 23%. However, there was a drop in the average case value for online sales (down 14%), whereas the average value per case for cellar door sales increased by 16%.

“The report suggests that in regions not significantly impacted by COVID-19 restrictions, cellar doors performed well this year,” said Triggs.

Wineries reported adapting their business models to suit COVID-19 conditions, providing more tailored experiences for visitors that improved profitability.”

Reflecting this adaptation in the survey was that the proportion of wineries charging for wine tastings increased from 54% in last year’s survey to 73% this year, and the average value for a tasting was reported to have increased by more than 30%.

The share of seated tastings also increased significantly, up from 44% in 2019–20 to 66% in 2020–21, and 71% of respondents said that bookings were encouraged for all tastings (although not mandatory).

While cellar door sales have improved, the survey showed winery-owned wine clubs have struggled. Although wine club sales revenue was reported to have grown by 10% in 2020–21, wine clubs’ share of DTC declined from 21% to 19%.

Responses showed the average 9-litre case value also declined – down 5% to $262 – while average value per member declined by 14% as a result of the reduced average case value combined with a slight reduction in shipments per member.

Triggs noted that, generally, a decline in average case value indicates reduced profitability – unless the cost of the product also reduces.

“The survey found that more than 60% of respondents were offering discounts of 11–20% on wine club orders, which suggests that this channel is very competitive,” she said.

Survey respondents reported database sales also increased in 2020–21, growing by 15% in value and 4% in average case value.

The average number of database contacts also increased, and the frequency of communication with contacts jumped substantially in the past two years, with the proportion of respondents sending communications at least bi-monthly increasing from 39% in 2018–19 to 60% in 2020–21.

Triggs noted that the survey results were only part of the picture.

“The survey has given us an important insight into how some wineries have managed the first full year of ‘living with COVID-19’, but the sample is small, and there are a wide range of experiences across the country that are not reflected in overall averages,” she said.

“The important thing for wineries is to measure their own performance regularly, so they know which channels are doing well and where investment will be most beneficial.”


Are you a Daily Wine News subscriber? If not, click here to join our mailing list. It’s free!