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1

DIRECTto Consumer

Wine Shipping Report

20142014An Annual Report from ShipCompliant and Wines & Vines

Report Summary ................................................................................................Highlights of the Report .................................................................................... The Overall Winey-to-Consumer Shipping Market in 2013 ........................ Monthly Results .................................................................................................. Results by Winery Production Amount .......................................................... Results by Price Category .................................................................................. Results by Varietal .............................................................................................. Results by Region .............................................................................................. Region by Region Results ................................................................................. Destination of Shipments ................................................................................. Conclusion .........................................................................................................

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Report ContributorsJeff Carroll, ShipCompliant

Pawel Smolarkiewicz, ShipCompliantBen Olsgard, ShipCompliant

Lynne Skinner, Wines & Vines

3

Report Summary

A successful sales period would show volume increasing

at a faster pace over previous years along with increasing

prices. This has been the case in the winery-to-consumer

sales channel since we began tracking it in 2010.

This year was a little different. While both the volume

of wine shipped and the value of that wine increased

at a rate that outpaced the overall American wine retail

sector, 2013 saw the first instance of average price per

bottle shipped decline. We believe this is significant.

The report that follows examines the details of the

winery-to-consumer shipping channel during the 2013

calendar year. It considers volume of shipments, pricing,

who the shippers are, where they are located, what is

being shipped, and where the shipments are going. In

producing this report, we keep our eyes trained on how

wineries as well as product and service providers to

the American wine industry can use the information in

this report to better serve their customers and clients.

Additionally, we are concerned with pointing to trends

where they can be reliably identified.

We appreciate and look forward to any feedback readers

of this report are inclined to give since comments and

suggestions will help make the following year’s report better.

A Different Kind of Year in Direct Wine Shipping

The 2014 “Direct Shipping Report” is collaboration

between ShipCompliant and Wines Vines Analytics, the

database/research arm of Wines & Vines Magazine.

The scope of this report concerns wines shipped directly

from wineries to consumers. It is important to note that

wines shipped from retailers to consumers, and wine sold

at a winery and carried out of the winery at the time of

purchase are not taken account of in this report. Rather,

this report is concerned solely with winery-to-consumer

shipments. As a result, this report does not attempt to

portray the outlines of the entire “Direct-to-Consumer”

sales channel.

The report is based on millions of anonymized

transactions that ultimately led to direct shipments from

January 2013 through December 2013 that were also

run through the ShipCompliant platform allowing for

compliant sales and shipment. Using the comprehensive

Wines & Vines database of all 7,600+ wineries across

the United States, the ShipCompliant transactions are

the basis to project shipments from all United States

wineries using stratifications including location of winery

and annual production. The model also tracks sale by

varietals shipped, destination of shipments and price

bands. The model, built to project the totality of winery

direct-to-consumer shipments, provides a vivid picture

of this important distribution channel. In the course of

processing the data through the forecasting model, the

identity of wineries and purchasers of wines are kept

entirely anonymous.

In addition to utilizing ShipCompliant data and the

Wines & Vines database and the model designed and

executed by Wines and Vines Analytics, we received

data and analysis from Nielsen and thank them for the

contribution.

How the 2014 Direct Shipping Report was Created

3

4

Highlights of the Report

Volume of shipments increase in 2013 9.3% to 3.47 million cases.

Total sales of winery-to-consumer shipments increased 7.5% to $1.57 Billion.

At $37.78, the average price-per-bottled decreased by

1.7% in 2013, the first ever decrease recorded since our

tracking of the channel began. The reduced price is likely

due to late year discounting as well as use of the direct

shipping channel to market significantly less expensive

wines.

December shipments increased by a 23% over 2012, one

of the largest one month year-over-year increases ever recorded.

America’s largest wineries continue to increase their

share of the direct shipping market.

Up 21% over 2012, the $15 and less price category saw

one of the largest growth in volume in 2013.

Inexpensive, non-red wines continue to see the largest

growth rates in the direct shipping channel.

Sonoma County and Oregon wineries showed

tremendous increases in the volume of wine shipped direct to the consumer in 2013.

Napa still dominates the direct shipping channel, but

recorded lower than average growth in 2013.

Californians buy the most direct-shipped wine, but

Maryland and New Jersey wine lovers received substantially more wine than in 2012.

Volume of shipments

3.47 million cases 9.3% yoy

Value of shipments

$1.57 billion 7.5% yoy

Price per bottle

$37.78 average 1.7% yoy

5

The Overall Winery-to-Consumer Shipping Market in 2013

While the winery-to-consumer shipping channel remained

strong and grew at a faster clip than the overall American

off-premise wine sector, 2013 marked the first year

since 2010 when the average price per bottle shipped

decreased from the previous year.

American wineries shipped more than 3.47 million cases

of wine in 2013, accounting for more than $1.57 billion

in sales—a record. This performance resulted in a 9.3%

increase in volume and 7.5% increase in value over 2012.

In comparison, according to Nielsen estimates, the overall

American off-premise retail sector grew at a rate of 1.3%

by volume and 4.5% in value. The difference between

growth in the direct to consumer channel and overall

wine retail sector is stark.

However the average price per bottle shipped decreased

by 1.7% to $37.78 per bottle in 2013. The reasons for this

downturn in average price per bottle in 2013 are two-fold:

1) Consumers purchasing a higher volume of lower priced

wines online and 2) selective discounting by producers

during the key shipping months of March, April and

December.

On the one hand what should be of concern for wineries

is the continued decrease in the growth rate of sales of

direct-shipped wine. That rate of sales growth has fallen

from 12.5% in 2010 to 7.5% in 2013. However, the positive

news is that having wine shipped across state borders

direct from the source appears to be catching on not only

with those willing to pay ultra-premium prices, but also

among more price-conscious consumers looking to pay

$15 and less, thereby broadening the size of the direct-to-

consumer market.

A Different Kind of Year

$1B

$1.2B

$1.4B

$1.6B

$1.8B

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

2010 2011 2012 2013

+9.3%+12.5%

+7.7%+9.9%

+9.3%+7.5%

VolumeValue

Total Volume and Value with Growth Year-Over-Year (2010-2013)

Average Price per Bottle (2010-2013) with Percent Increase/Decrease

$37.78-1.7%

2013$38.42 +2.1%

2012

$37.63+2.9%

2011

$36.562010

6

Monthly Results

The pace of sales throughout the year has a predictable

character. Shipments drop during very cold and very hot

months. And as it always has for wine retail sales, the

fourth quarter of the year dominates sales. This same

pattern played out in 2013 with some twists.

The total volume of shipments in December 2013

increased a whopping 23% over 2012, with dollar sales

increasing by 14% over 2012. However, that increase

in volume was driven by the average price per bottle

decreasing by a significant 7%. The important shipping

months of March and April, when many winery club

shipments are delivered, also saw significant decreases

in average price per bottle shipped of 5% and 6%

respectively.

On a quarterly basis, the 4th quarter of 2013 remained the

source of 37% of annual sales, the same as 2012 and leading

Fourth Quarter Discounting

4.0%

0%

8.0%

12.0%

16.0%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

ValueVolume

10.0%

20.0%

30.0%

40.0%

Q1 Q2 Q3 Q4

2010

2011

2012

2013 24% 23% 22% 21% 26% 23% 23% 24% 16% 17% 18% 18% 35% 36% 37% 37%

January

February

March

April

May

June

July

August

September

October

November

December

CasesMonth% of Total

Volume% change

from 2012Avg. Priceper Bottle

165,865 $34.34

243,990 $38.61

338,607 $43.44

313,099 $37.82

318,061 $33.18

194,949 $31.68

152,348 $30.65

169,830 $32.93

301,913 $38.92

464,447 $43.05

446,477 $42.05

365,929 $33.13

4.8%

7.0%

9.7%

9.0%

9.2%

5.6%

4.4%

4.9%

8.7%

13.4%

12.8%

10.5%

5.5%

14.5%

1.9%

7.2%

16.9%

9.2%

16.4%

16.0%

7.2%

5.2%

2.4%

22.8%

all other quarters. The first quarter continued to lose sales,

a pattern that has held true for four years in a row.

Percent of Volume and Value, by Month (2013)

Percent of Sales, by Quarter (2010-2013)

Month by Month Volume (2013)

7

Results by Winery Production Amount

A certain kind of schizophrenia invaded the winery-to-consumer shipping channel in 2013 when you look at results

from the perspective of winery production size. In 2013 it was, again, the very largest wineries as well as the very small

wineries that outperformed the overall direct shipping channel.

Large Wineries (Over 500,000 cases produced annually)Only 55 such wine companies exist in the United States, yet they represent 83% of total U.S. wine production. It is a

defining feature of the winery-to-consumer shipping channel that these largest of wineries account for only 5.2% of

volume of direct shipped wines. However, their volume of wine shipped direct is up 76% since 2010, including a 26%

increase in 2013 over 2012. These huge wineries sell direct at an average per bottle price of only $27.12, far below the

channel average.

Medium Wineries (50,000 to 499,000 cases produced annually)The 250 U.S. wineries that fall into this category produce a mere 9.7% of all wine. However, they ship direct to the

consumer 29% of all wines consumers receive direct from wineries. In 2013, these “medium” sized wineries only slightly

underperformed the overall shipping channel.

Small Wineries (5,000 to 49,999 cases produced annually)Accounting for 1,433 U.S. wineries producing a mere 5% of wine made in America, these small wineries are the

workhorses of the direct-to-consumer channel. This category of winery accounted for 48% of all wines shipped in 2013.

This is comparable to 2012. However, the small wineries’ share of the value of the direct wine shipping channel dropped

below 50% for the first time since beginning tracking the direct shipment of wine. This was a result of a disappointing

7.7% increase in volume shipped and an even more disappointing 7.2% decrease in their average price per bottle.

Very Small Wineries (1,000 to 4,999 cases produced annually)The 3,178 U.S wineries inhabiting this production category saw remarkable growth in 2013, answering the question, “can

a collection of wineries continually increase their prices and not continue to decrease their growth rate?” The answer is

“Yes”. Despite increasing their average bottle price in 2013 by 14%, these very small wineries were able to grow their

volume at a pace exceeding the overall market, something they have not been able to do for the past three years. In

fact, the average price per bottle for these wineries has increase 48% since 2010.

Large and Small Hold Hands on the Way Up

500,000+

50,000 - 499,999

5,000 - 49,999

1,000 - 4,999

Less than 1,000

181,079

990,865

1,662,373

509,677

131,520

$58,930,319

$364,776,791

$744,734,544

$330,561,324

$76,645,705

$27.12

$30.68

$37.33

$54.05

$48.56

CasesProduction Size Value $ per Bottle

5.2%

28.5%

47.8%

14.7%

3.8%

3.7%

23.2%

47.3%

21.0%

4.9%

26.1%

7.6%

7.3%

13.9%

10.3%

% of Volume % of ValueChange in

Volume

32.2%

7.5%

-0.4%

29.6%

-3.5%

Change in Value

4.9%

-0.1%

-7.2%

13.8%

-12.5%

Change in $ per Bottle

2103 Results by Winery Production Size

8

Results by Winery Production Amount

Limited Production Wineries (1,000 cases or less produced annually)Despite the 2,742 limited production wineries in this category, they represent a mere 0.4% of total U.S. wine production.

In 2013 they were able to match the volume growth of the overall direct shipping marketplace, but at the expense of

seeing their average price per bottle descend by 13% to $48.56 from $55.48. No other production category we track saw

anywhere close to this decline in average price per bottle

< 1000cases

1,000 - 4,999cases

5,000 - 49,999cases

50,000 - 499,999cases

500,000+cases

Percentage change in cases shipped since 2010

Percentage change in Price per Bottle since 2010

36.6%

48.0%

28.3%

-8.8%

35.8%

76.0%

-7.1%

9.0%

-1.4%

7%

10% 14%

7% 8%

26%

<1000 1,000 - 4,999 5,000 - 49,999 50,000 - 499,999 500,000+

Growth in Volume for 2013 by Production Amount

Change in Volume and Change in Average Price per Bottle since 2010

9

Results by Price Category

The direct shipping channel has a reputation for being

the source through which America’s most expensive and

coveted wines are procured. While it is true that nearly

all of the country’s most expensive wines are in large part

delivered direct from the winery to the consumer, 2013’s

results remind us that the price point sweet spot for

winery-to consumer-shipping is at $40 and under. In fact,

it’s the $15 and less price point that is seeing the most

growth in this channel

With its 21% growth in volume in 2013 (more than double

the overall average growth rate of 9.9%), the $15 and

under price category now represents 19% of all wines

shipped from winery to consumer. In fact, since 2010

no price category we track has seen both positive and

continually increasing growth rates over the past three

years, except for the $15 and less category. It should be

no surprise to learn, then that in 2013, the varietals with

the largest year over year growth rate were those with

the smallest average price per bottle.

In addition to the $15 and less price category, only the

$60 - $79.99 and $100 - $149.99 price categories saw

volume growth outpacing the overall average at 18% and

21% respectively. It’s notable that while only representing

2.8% of total volume of shipments in 2013, the $100 -

$149.000 price band has experienced robust growth in

volume of shipments since 2010 of 60%.

The Low Will Grow

Growth in Volume since 2010 by Price Category

Volume by Price Category

Varietals

Under $15

$15 - $19.99

$20 - $29.99

$30 - $39.99

$40 - $49.99

$50 - $59.99

$60 - $79.99

$80 - $99.99

$100 - $149.99

$150 - $199.99

$200 and over

Cases Shipped

655,522

442,378

810,940

495,967

335,704

184,282

245,049

139,890

97,309

37,752

30,722

% of Total Volume

18.9%

12.7%

23.3%

14.3%

9.7%

5.3%

7.1%

4.0%

2.8%

1.1%

0.9%

Change inVolume from 2012

20.7%

4.3%

6.1%

7.3%

7.6%

5.4%

17.6%

-3.6%

23.1%

2.0%

3.6%

68%

101%

83% 77% 63%

78% 75% 77% 62% 67% 71%

Under $15 $15 - $19.99

$20 - $29.99

$30 - $39.99

$40 - $49.99

$50 - $59.99

$60 - $79.99

$80 - $99.99

$100 - $149.99

$150 - $199.99

$200 and over

10

Results by Price Category

Going forward we believe the lowest price categories

will be the most important to watch closely. If in fact the

winery-to-consumer shipping channel is in the process

of maturing and attracting consumers beyond the early

adopters inclined to pay a far higher price per bottle,

then we can expect to continue to see the average price

per bottle decrease in coming years while volume growth

outpaces growth in the value of the winery-to-consumer

shipping channel.

Under $15

$15 - $19.99

$20 - $29.99

$30 - $39.99

$40 - $49.99

$50 - $59.99

$60 - $79.99

$80 - $99.99

$100 - $149.99

$150 - $199.99

$200 and over

2011 over 2010

7.0%

-2.1%

9.4%

6.9%

32.0%

7.9%

15.4%

13.2%

21.0%

6.7%

21.8%

2012 over 2011

14.1%

-3.0%

3.9%

13.0%

11.7%

13.0%

-1.8%

19.0%

7.6%

36.3%

11.7%

2013 over 2012

20.7%

4.3%

6.1%

7.3%

7.6%

5.4%

17.6%

-3.6%

23.1%

2.0%

3.6%

Year over Year change in volume by price category (2013-2010)

11

Results by Varietal

In 2013, five varietals/wines represented 61% of the total volume of wines shipped and a whopping 73% of the total

value of all wines shipped from winery-to-consumer:

Cabernet Sauvignon - Pinot Noir - Red Blends - Chardonnay - Zinfandel

No other varietal or type of wine exceeds either 5% of the total volume or value in the winery-to-consumer shipping

category. However, if certain growth patterns observed in 2013 and past years continue, that may change.

Cabernet Sauvignon is not only the number one varietal in terms of percent of total volume (17%) but also in terms of

total value of shipments (29%) due to its chart-leading average price per bottle of $63.59. This Cabernet dominance of

the direct shipping channel is a result of the direct influence of Napa Valley, which ships over 73% of all the Cabernet

through the direct shipping channel at an average price per bottle of $81.69. However, it’s notable that in 2013 the

Cabernet Sauvignon category saw a meager 5.6% increase in overall volume on higher average bottle prices out of Napa.

The Rising Collection of “Other”

CasesProduction Size $/BottleVolumeChange

% ofVolume

% ofValue

ValueChange

$/BottleChange

Blend - Red

Blend - White

Cabernet Franc

Cabernet Sauvignon

Chardonnay

Fume / Sauvignon / Blanc

Merlot

Moscato

Other

Other Red

Other White

Petite Sirah

Pinot Gris / Grigio

Pinot Noir

Riesling

Rose

Sangiovese

Sparkling

Syrah / Shiraz

Unspeci�ed

Zinfandel

457,931

71,843

45,404

595,103

369,707

159,025

138,539

5,552

70,220

168,441

95,864

46,954

44,151

493,391

37,109

52,431

37,304

96,014

149,414

132,382

208,735

$45.81

$19.65

$35.79

$63.59

$29.49

$21.45

$29.91

$6.72

$23.39

$24.38

$20.40

$28.67

$16.42

$41.44

$15.40

$20.72

$24.85

$29.20

$33.64

$34.52

$27.52

8.5%

7.0%

3.8%

5.6%

11.7%

30.4%

14.7%

300.1%

8.8%

18.5%

28.2%

-1.9%

20.1%

11.3%

6.9%

24.1%

9.9%

13.2%

-2.1%

-6.3%

0.1%

-0.9%

2.9%

3.4%

7.0%

7.9%

27.6%

12.3%

98.3%

15.6%

21.9%

13.2%

4.1%

17.7%

10.3%

6.0%

40.2%

10.4%

14.7%

7.6%

7.3%

0.6%

-8.6%

-3.8%

-0.4%

1.3%

-3.4%

-2.2%

-2.1%

-50.4%

6.3%

2.8%

-11.7%

6.1%

-2.0%

-0.8%

-0.9%

12.9%

0.4%

1.3%

9.9%

14.6%

0.5%

Value

$ 251,729,399

$ 16,942,185

$ 19,498,867

$ 454,112,193

$ 130,831,107

$ 40,934,053

$ 49,719,618

$ 447,799

$ 19,707,129

$ 49,280,830

$ 23,471,263

$ 16,156,669

$ 8,698,872

$ 245,368,183

$ 6,856,506

$ 13,033,959

$ 11,122,073

$ 33,648,847

$ 60,312,917

$ 54,840,572

$ 68,935,643

13.2%

2.1%

1.3%

17.1%

10.6%

4.6%

4.0%

0.2%

2.0%

4.8%

2.8%

1.4%

1.3%

14.2%

1.1%

1.5%

1.1%

2.8%

4.3%

3.8%

6.0%

16.0%

1.1%

1.2%

28.8%

8.3%

2.6%

3.2%

0.03%

1.3%

3.1%

1.5%

1.0%

0.6%

15.6%

0.4%

0.8%

0.7%

2.1%

3.8%

3.5%

4.4%

Volume and Value by Varietal (2013)

12

Results by Varietal

Among the five leading varietals, Pinot Noir was the 2013 standout. It saw an overall increase in volume of 11% and 10%

increase in overall value. The strength of the Pinot Noir category is due largely to increasing volumes and stable prices

in Napa, Sonoma and Oregon.

Among the five leading varietals, Pinot Noir was the 2013 standout. It saw an overall increase in volume of 11% and 10%

increase in overall value. The strength of the Pinot Noir category is due largely to increasing volumes and stable prices

in Napa, Sonoma and Oregon.

But perhaps the most intriguing element of the direct shipping channel from a varietal perspective is what the 2013

results tell us about those varietals that are surging in interest as well as waning in interest among the channel’s

patrons. Consider the list of the five wines that saw the largest increase in volume in 2013:

Moscato: +300% - Sauvignon Blanc: +30% - Other White: +28% - Rose: +24% - Pinot Gris: +20%

Together, these varietals make up just over 10% of the volume of the winery-to-consumer shipping channel and they are

all showing consistent growth since 2010:

Moscato: +300% - Rose: +90.5% - Sauvignon Blanc: +62% - Other White: +92% - Pinot Gris: +37%

Wineries should take note that in addition to these top-performing wines being non-reds, they are also lower price point

wines with Moscato at the lower end of the spectrum ($6.72) and Sauvignon Blanc at the higher end ($21.45).

On the other end of the spectrum are those varietals that performed worst in 2013:

Syrah: -2.1% - Petite Sirah: -1.9% - Zinfandel: +0.1% - Cabernet Franc: +3.8% - Cabernet Sauvignon: +5.6%

Together, these poor performers in 2013 represent 30% of the total volume of direct- shipped wine. Additionally, they all

carry average price per bottles that exceed all of the best performers in 2013. But most importantly, when you examine

the performance of these five varietals since 2010, you notice that they all have failed to match the growth rate of the

overall winery-to-consumer shipping channel, with the exception of Petite Sirah, though this is due only to a very good

2011.

13

Results by Varietal

-44.4% Blend - White

-2.0% Blend - Red

-5.6% Cabernet Franc

17.4% Cabernet Sauvignon

39.2% Chardonnay

62.6% Fume / Sauvignon / Blanc

16.7% Merlot

19.8% Other

44.7% Petite Sirah

36.6% Pinot Gris / Grigio

38.1% Pinot Noir

9.9% Riesling

90.5% Rose

15.7% Sangiovese

22.5% Sparkling

14.4% Syrah / Shiraz

19.1% Zinfandel

Cabernet Sauvignon

Rose


Petite Sirah

Other White

Pinot Gris / Grigio

Moscato

Syrah/Shiraz

Cabernet Franc

Zinfandel

300.1%-50.4%

9.9 %

6.1%

.5 %

-.4 %

1.3 %

-2.0 %

12.9 %

-11.7 %

-2.2 %30.4%

28.2%

24.1%

20.1 %

5.6 %

3.8 %

.1 %

-1.9 %

-2.1 %

Volume Change

Price per Bottle Change

Fastest and Slowest Growing Varietals this Year (2013 over 2012)

Varietal Growth since 2010, by Volume (2013 over 2010)

14

Results by Region

Eighty-two percent of all wine shipped from wineries

to consumers in 2013 originated from a California-

based winery, representing no change from 2012, but

continuing to demonstrate the dominance of the Golden

State in this sales channel. This influence on the direct

shipping channel is also demonstrated by the fact that the

average bottle price of a California wine shipped direct is

$40.35, while the price of a non-California wine is $25.48.

However, the story of change during 2013 lies with a sub

region inside California and a particular state north of

California.

In 2013, Sonoma County wineries increased their

shipments to consumers by a whopping 25%, increasing

their overall volume share of the winery-to-consumer

channel 3% to 24% overall. This is the second year in

a row that Sonoma has seen increases in the volume

of wine shipped but last year’s 11% increase seems

inconsequential compared to the 25% increase in 2013.

It should come as no surprise, however, that the average

price of a bottle of Sonoma wine dropped by 6% in 2013

Oregon is the other growth story in 2013. Of all five

regions broken out in this report, Oregon saw the largest

increase in total value of shipments at 21% and was the

only region to see positive growth of its average price per

bottle shipped.

Sonoma and Oregon Make Big Strides

Napa Sonoma Rest of CA Oregon Washington Rest of US

Volume

Value

32.5%

24.2%26.0%

3.6% 3.4%

10.3%

4.8%3.2%3.6%

18.8%21.3%

48.2%

Napa

Sonoma

Rest of CA

Oregon

Washington

1,127,985

842,473

905,062

125,461

116,989

$759,933,617

$335,375,453

$296,856,534

$57,402,462

$50,189,116

$56.14

$33.17

$27.33

$38.13

$35.75

CasesRegion Value $ per Bottle

32.5%

24.2%

26.0%

3.6%

3.4%

48.2%

21.3%

18.8%

3.6%

3.2%

+7.8%

+25.3%

+0.7%

+19.4%

+0.5%

% of Volume % of ValueChange in

Volume

+6.5%

+17.3%

+0.1%

+21.0%

+0.3%

Change in Value

-1.3%

-6.4%

-0.5%

+1.3%

-0.2%


Rest of US 357,544 $75,891,502 $17.69 10.3% 4.8% +5.0% +5.1% 0.0%

Percentage of Total Volume and Value, by Region (2013)

Statistics by Region (2013)

15

Region by Region Results

In 2013 Napa continued to dominate the direct shipping

channel by shipping high priced wines directly to the

consumer that accounted for nearly 50% of the total value

of the wine-shipping marketplace. However, on a varietal-

by-varietal basis, it seems the juggernaut caught some

head winds.

Napa is all about Cabernet Sauvignon and in 2013 the

volume of shipments of this varietal by Napa-based

wineries did not keep pace with the overall direct shipping

marketplace, increasing by only 4.4% compared with an

overall channel average of 9.9%. Part of this slowdown in

volume may be due to the 4% increase in average price

per bottle that the Napa sector experienced.

Napa Red Blends did better in keeping pace with the

overall market, seeing an 8% increase in shipments in the

volume of these primarily Bordeaux blends. However, to

keep this pace it took a 9% decrease in average price per

bottle to achieve this. Though no weeping for the Napa

Red Blend category, which still maintains an average bottle

price of $80.48.

There were some noteworthy success in Napa in 2013,

particularly Merlot, Pinot Noir and Sauvignon Blanc. All

three varietals reported significant jumps in the volume

of wine shipped as well as increased average prices per

bottle. Pinot Noir in particular increased its share of Napa

volume by 7.5% so that Pinot shipments now represent

over 8% from Napa.

1.7%

22.6% Sauvignon Blanc

2.0%

12.7% Merlot

% Change Volume % Change Price per Bottle

-1.2%

19.0%Pinot Noir

Napa County Varietal Winners in 2013

Napa County - Dominat, but Treading Water

16


Napa County - A Look at the Numbers

Blend - Red

Blend - White

Cabernet Franc

Cabernet Sauvignon

Chardonnay

157,307

13,807

13,920

344,231

112,724

$151,926,651

$4,836,046

$9,346,686

$337,456,867

$49,104,152

$80.48

$29.19

$55.96

$81.69

$36.30

CasesVarietals Value $ per Bottle

7.1%

34.5%

-23.8%

4.4%

1.8%

-2.6%

2.5%

-11.4%

8.5%

2.2%

Change inVolume

Change inValue

-9.1%

-23.8%

16.2%

3.9%

0.4%


Fume / Sauvignon / Blanc 60,593 $20,161,650 $27.73 22.6% 24.8% 1.7%

28.8%

-0.7%

26.5%

18.9%

35.7%

60.9%

-15.3%

12.2%

-5.0%

-27.0%

5.7%

Merlot

Moscato

Other

Other Red

Other White

63,174

480

18,240

26,343

19,243

$30,993,263

$45,278

$5,473,453

$11,087,263

$8,027,028

$40.88

$7.86

$25.01

$35.07

$34.76

12.7%

-4.0%

97.4%

27.0%

Petite Sirah

Pinot Gris / Grigio

Pinot Noir

Riesling

Sangiovese

16,312

8,782

93,361

5,476

16,751

$7,260,710

$2,037,623

$46,984,443

$1,398,238

$5,066,739

$37.09

$19.34

$41.94

$21.28

$25.21

Sparkling

Syrah / Shiraz

Unspeci�ed

Zinfandel

Rose

5,158

48,124

23,606

31,157

49,198

$2,210,343

$17,680,655

$12,084,223

$15,768,090

$20,984,217

$35.71

$30.62

$42.66

$42.17

$35.54

14.9%

-58.8%

37.7%

31.8%

28.5%

6.2%

18.2%

20.4%

27.4%

74.8%

-16.6%

13.4%

-6.3%

-16.3%

4.7%

2.0%

-57.1%

-30.2%

3.8%

-0.3%

7.0%

-6.5%

1.2%

-6.1%

8.6%

-1.5%

1.1%

-1.4%

14.6%

-1.0%

17


No region tracked in this report experienced the kind of

explosive growth in the volume of wine shipped direct to

consumers as Sonoma County did. Roughly two million

more bottles of wine were shipped out of Sonoma County

in 2013 versus 2012. However, this came at the expense

of nearly every varietal and type of wine shipped seeing a

reduction in its average price per bottle.

However, it is a striking testament to the demand for

Sonoma County Pinot Noir that despite the overall

downturn in prices in this diverse county, Pinot Noir

shipments only experienced a 1.8% decrease in average

price per bottle while increasing its volume of shipments

by 15% to nearly 180,000 cases. Sonoma County is the

darling of the American Pinot Noir world.

A number of varietals took full advantage of their price

reductions by ramping up volume tremendously including:

Red Blends, Sauvignon Blanc, “Other” Reds and Whites,

Pinot Gris, Riesling and Moscato, which saw a 3,939%

increase in volume shipped in 2013 of a very small base.

Two wines however need to be noted with some concern:

Sonoma County Sparkling wine and Syrah. Both saw

reductions in average price per bottle, including an 18%

decrease in the price of Syrah. However, their growth was

meager if non existent with Sparkling wine’s volume actually

decreasing by 3.5% and Syrah increasing a mere 2%.

Best and Worst Performing Varietals in Sonoma County (2013)

137.2% Riesling -38.8% 122.2% Other White -37.1%

Moscato 3,939%

-73.6%

Volume Change


Sonoma’s Poor Performers

-8.0% 80.7% Pinot Gris / Grigio

-11.4% 59.3% Other Red

-8.5% 44.0% Fume / Sauvignon / Blanc

-20.0% 43.5% Blend - Red

-17.9% 2.0% Syrah / Shiraz

-1.6% -3.5% Sparkling

Sonoma County - Losing Dollar Share for Explosive Volume Share

18


Blend - Red

Blend - White

Cabernet Franc

Cabernet Sauvignon

Chardonnay

CasesVarietals Value $ per BottleChange in

VolumeChange in

ValueChange in

$ per Bottle


Merlot

Moscato

Other

Other Red

Other White

Petite Sirah

Pinot Gris / Grigio

Pinot Noir

Riesling

Sangiovese

Sparkling

Syrah / Shiraz

Unspeci�ed

Zinfandel

Rose

67,390

8,977

5,830

102,076

120,689

46,332

29,474

3,584

4,726

34,839

22,934

12,521

12,371

179,343

4,413

11,663

9,904

17,282

28,749

36,696

82,681

$24,558,274

$1,437,725

$2,165,241

$57,947,022

$45,450,627

$9,831,723

$7,004,502

$194,328

$1,811,269

$9,651,549

$3,661,946

$3,746,470

$2,300,965

$101,269,159

$439,033

$2,456,341

$3,808,128

$7,259,743

$7,738,678

$15,648,342

$26,994,389

$30.37

$13.35

$30.95

$47.31

$31.38

$17.68

$19.80

$4.52

$31.93

$23.09

$13.31

$24.93

$15.50

$47.06

$8.29

$17.55

$32.04

$35.01

$22.43

$35.54

$27.21

43.5%

6.6%

6.9%

32.1%

16.7%

44.0%

7.2%

3939.6%

-33.6%

59.3%

122.2%

31.9%

80.7%

15.3%

137.2%

14.0%

-12.3%

-3.5%

2.0%

75.6%

18.6%

14.8%

-11.1%

-6.4%

30.8%

8.6%

31.8%

-12.0%

967.5%

-20.9%

41.0%

39.8%

27.8%

66.2%

13.2%

45.2%

7.1%

12.2%

-5.1%

-16.3%

130.7%

13.4%

-20.0%

-16.7%

-12.5%

-1.0%

-6.9%

-8.5%

-17.9%

-73.6%

19.1%

-11.4%

-37.1%

-3.1%

-8.0%

-1.8%

-38.8%

-6.0%

27.8%

-1.6%

-17.9%

31.4%

-4.4%

Sonoma County - A Look at the Numbers

19

Outside Napa and Sonoma, California wineries generally

lost ground in the direct to consumers shipping channel

by standing still. In fact, despite taking no change in

overall price per bottle, our Rest of California category

saw an anemic growth of cases shipped of only 0.7%.

However, some important varietals shipped from

the winemaking hinterlands of California show some

impressive results.

Chardonnay and the “Other Red” category were the clear

standouts. Both successfully increased the volume of

wine shipped to consumers while also increasing their

price and together these categories of wine amount to

16% of the total volume shipped in this category. It may

be important to point out that the catch all category

of “Other Red” includes a number of lesser known and

exotic varietals, which have been receiving a good deal of

buzz in the media and among the wine cognoscenti over

the past few years.

Unfortunately, Cabernet Sauvignon and Pinot Noir, two

important varietals in this winery category, went the

opposite direction, both seeing a decrease in average

price per bottle as well as volume shipped. These two

varietals represent 27% of the category.

Finally, attention needs to be drawn to Zinfandel.

Representing an important 8% of volume shipped from

wineries outside Napa and Sonoma, this iconic varietal

saw a whopping 23% decrease in volume in 2013 based

on only a 4.8% increase in average price per bottle.

This kind of extreme price sensitivity to a varietal by

consumers should be of concern.

Best and Worst Performers Verietals in Rest of California (2013)


Rest of CA’s Poor Performers

-10.2%

9.6%

10.3%

-1.1%

-14.2%

2.8%

13.9%

-3.8%

Cabernet Sauvignon

Chardonnay

Other Red

Pinot Noir


Volume Change

The Rest of California - Standing Still

20


Blend - Red

Blend - White

Cabernet Franc

Cabernet Sauvignon

Chardonnay


VolumeChange in

ValueChange in

$ per Bottle


Merlot

Moscato

Other

Other Red

Other White

Petite Sirah

Pinot Gris / Grigio

Pinot Noir

Riesling

Sangiovese

Sparkling

Syrah / Shiraz

Unspeci�ed

Zinfandel

Rose

125,192

18,390

9,757

98,197

99,861

42,601

25,304

443

14,711

55,960

23,350

16,190

7,304

143,478

1,975

11,988

16,838

16,562

66,963

39,812

70,187

$44,657,039

$5,083,115

$3,417,198

$36,740,367

$27,042,885

$8,964,719

$6,035,375

$97,767

$5,451,819

$17,188,907

$5,453,330

$4,466,218

$1,270,497

$56,661,658

$343,139

$3,071,544

$3,597,917

$4,172,236

$28,247,345

$15,198,302

$19,695,158

$29.73

$23.03

$29.19

$31.18

$22.57

$17.54

$19.88

$18.38

$30.88

$25.60

$19.46

$22.99

$14.50

$32.91

$14.48

$21.35

$17.81

$20.99

$35.15

$31.81

$23.38

2.9%

13.3%

14.5%

-10.2%

9.6%

40.1%

37.5%

33.2%

77.0%

10.3%

15.0%

-16.1%

-25.4%

-1.1%

-44.7%

46.4%

28.2%

4.7%

-2.8%

-19.3%

-22.5%

-0.3%

32.7%

11.8%

-22.9%

12.6%

33.7%

30.2%

91.6%

133.1%

25.7%

17.0%

-6.8%

-30.0%

-4.9%

-38.0%

80.6%

17.8%

21.4%

21.9%

-18.7%

-18.8%

-3.1%

17.2%

-2.3%

-14.2%

2.8%

-4.6%

-5.3%

43.9%

31.7%

13.9%

1.8%

11.1%

-6.2%

-3.8%

12.2%

23.4%

-8.1%

16.0%

25.4%

0.8%

4.8%

The Rest of California - A Look at the Numbers

21


Oregon is all about Pinot Noir. This varietal accounts for

54% of all volume shipped from the state and 67% of

the value of those shipment. As goes Pinot Noir, so goes

Oregon in the direct shipping records. In 2013, Oregon

Pinot Noir got its go on.

Without a reduction in the average per bottle price of Pinot

Noir, Oregon increased it shipments of the varietal by an

impressive 19%. This is impressive growth for an industry

not only dependent on Pinot Noir but also with so many

of the producers being small and boutique in nature. This

increase in Pinot Noir shipments marks a turnaround from

2012 when Oregon Pinot saw a 2% decrease in the volume

of Pinot shipments along with a 7% increase in the average

price per bottle. The successful 2013 figures demonstrate

not only a righting of the ship, but what appears to be an

acceptance of the 2012 price increases by 2013 buyers.

The other significant story in Oregon in 2013 is the

continued success of Syrah in the direct shipping channel.

After a 100% increase in the volume of Syrah shipped by

Oregon producers in 2012, volume increased another

29% in 2013 but this time on an average price per bottle

increase of 59%. Oregon Syrah now carries a nearly

identical average price as Oregon Pinot Noir in the winery-

to-consumer shipping channel. Impressive.

Oregon’s Top Performers (2013)

28.5% 58.5%

Pinot Noir

Syrah / Shiraz


Volume Change 19.1%-.2%

Oregon - Pinot Soars with Syrah Close on its Heels

22


Blend - Red

Blend - White

Cabernet Franc

Cabernet Sauvignon

Chardonnay


VolumeChange in

ValueChange in

$ per Bottle


Merlot

Moscato

Other

Other Red

Other White

Petite Sirah

Pinot Gris / Grigio

Pinot Noir

Riesling

Sangiovese

Sparkling

Syrah / Shiraz

Unspeci�ed

Zinfandel

Rose

6,957

2,291

438

3,294

8,485

628

1,832

-

1,124

2,963

3,323

268

6,737

67,957

4,186

1,315

111

4,979

5,318

3,000

255

$2,120,724

$387,944

$263,404

$1,134,281

$3,195,229

$125,230

$408,829

-

$569,712

$809,590

$739,259

$85,121

$1,468,344

$38,243,874

$937,804

$364,700

$33,201

$2,058,287

$2,906,219

$1,447,196

$103,515

$25.40

$14.11

$50.15

$28.70

$31.38

$16.63

$18.59

-

$42.22

$22.77

$18.54

$26.51

$18.16

$46.90

$18.67

$23.12

$25.02

$34.45

$45.54

$40.20

$33.77

8.4%

-11.7%

83.0%

45.0%

24.4%

23.8%

86.3%

-

112.2%

28.5%

61.8%

40.5%

5.7%

19.1%

61.4%

-41.5%

48.9%

75.6%

28.5%

-35.1%

22.7%

24.2%

-8.5%

127.4%

18.3%

-6.6%

82.2%

73.9%

- -

241.4%

18.6%

64.8%

35.3%

14.9%

18.9%

65.3%

-36.0%

59.1%

45.6%

103.6%

-11.1%

55.1%

14.6%

3.7%

24.3%

-18.4%

-24.9%

47.1%

-6.7%

60.9%

-7.7%

1.9%

-3.7%

8.7%

-0.2%

2.4%

9.3%

6.9%

-17.1%

58.5%

37.0%

26.3%

Oregon - A Look at the Numbers

23


Washington State ships a near identical amount of wine as

its neighbor to the south along with near identical totals for

dollar sales. However, Washington State delivers a much

wider variety of wines. Unfortunately, this variety did not

help it overcome a somewhat stagnant and disappointing

2013 in the direct shipping channel, perhaps a hangover

from the exuberant 2012 the state witnessed.

The two most important varietals to the Washington

wineries using the direct shipping channel are Cabernet

Sauvignon and Red Blend, which together in 2013

accounted for nearly 50% of all shipments. However,

despite a combined 9% decrease in the average price

per bottle for these two wines, together their volume of

shipments dropped 1%.

The other important varietal in Washington State is Syrah,

which accounted for 13% of shipments in 2013. However,

it saw only a miniscule 1% growth in the volume shipped

on a 3.6% drop in average price per bottle.

Finally, Shipments of Washington State Sauvignon Blanc

dropped 33% on an average per bottle price increase of

11%. This is in contrast to the 24% increase in shipments

in the catchall “Other Red” category, even though the

category’s average price per bottle increased 9%.

It is entirely likely that the underperforming Washington

State direct shipping market was a result of an over

exuberance in 2012. With that year’s 18% increase in

volume of wine shipped and 40% increase in the value of

shipments, it may be that buyers have shipment fatigue

where Washington wines are concerned.

-Table showing cases, value, price per bottle, volume change, value change price per bottle change for varietals in Washington State.

Volume and Value by Varietal for Washington (2013)

Blend - Red

Blend - White

Cabernet Franc

Cabernet Sauvignon

Chardonnay


VolumeChange in

ValueChange in

$ per Bottle


Merlot

Moscato

Other

Other Red

Other White

Petite Sirah

Pinot Gris / Grigio

Pinot Noir

Riesling

Sangiovese

Sparkling

Syrah / Shiraz

Unspeci�ed

Zinfandel

Rose

30,181

2,391

2,011

27,461

4,096

2,840

5,793

-

1,100

6,086

2,701

256

1,331

1,996

4,888

1,424

681

350

15,192

5,868

343

$13,481,405

$517,932

$817,863

$15,626,196

$886,837

$585,169

$2,111,570

-

$294,466

$2,317,842

$657,476

$103,363

$254,684

$626,015

$875,323

$327,189

$205,495

$64,980

$6,436,159

$3,902,342

$96,753

$37.22

$18.05

$33.89

$47.42

$18.04

$17.17

$30.37

-

$22.32

$31.74

$20.28

$33.65

$15.94

$26.14

$14.92

$19.14

$25.14

$15.47

$35.30

$55.42

$23.49

-3.9%

13.3%

-6.8%

2.4%

-4.9%

-31.1%

-0.2%

-

22.6%

23.5%

-22.2%

224.0%

-30.4%

28.9%

4.5%

-51.0%

24.2%

32.8%

1.1%

85.8%

7.6%

-18.9%

11.3%

2.4%

0.1%

-6.2%

-23.5%

17.9%

-

1.0%

34.3%

-25.7%

295.1%

-24.0%

21.1%

6.0%

-36.8%

31.0%

48.2%

-2.6%

277.6%

2.5%

-15.7%

-1.8%

9.8%

-2.2%

-1.3%

10.9%

18.1%

-

-17.6%

8.8%

-4.6%

21.9%

9.1%

-6.0%

1.5%

28.9%

5.5%

11.6%

-3.6%

103.3%

-4.7%

Washington State - Stagnation After Exuberane

24


Though a somewhat unsatisfying category, “Rest of the

United States” depicts 10% of all winery-to-consumer

shipments and consists of significant variety in the wines

that are shipped from states outside California, Oregon

and Washington. The 2013 returns for this category,

however, show, like Washington State, a collection of

wineries that pulled back on their growth rate after an

impressive 2012.

Red Blends and “Other Reds” are the two largest wines

shipped within this category. Many of the wines are not

only traditional red blends, but also hybrid blends. Both

wines saw stunted growth in 2013 over 2012.

Riesling, another commonly grown grape in this category

of states, saw a second straight year of declining

shipments. After a 23% decrease in shipments in 2012

over 2011, 2013 followed up with a 10% decrease in

volume of shipments over 2012.

The bright spot on the “Rest of United States” category

in 2013 was Chardonnay. The volume of shipments of

Chardonnay increased 61%, while the value of Chardonnay

shipments increased by 71% on a 6% increase in the

average price per bottle. Chardonnay now accounts for 7%

of all shipments in this category.

Finally, Zinfandel made a very interesting move in 2013,

increasing the volume of shipments by an eye-popping 408%.

Top Performers in the Rest of the U.S. (2013)

62.1%

408.4%

5.9%

-26.7%

Chardonnay

Zinfandel


Volume Change

Rest of The United States - Diversity and Disappointments

25


Blend - Red

Blend - White

Cabernet Franc

Cabernet Sauvignon

Chardonnay


VolumeChange in

ValueChange in

$ per Bottle


Merlot

Moscato

Other

Other Red

Other White

Petite Sirah

Pinot Gris / Grigio

Pinot Noir

Riesling

Sangiovese

Sparkling

Syrah / Shiraz

Unspeci�ed

Zinfandel

Rose

70,904

25,988

13,449

19,844

23,851

6,032

12,961

1,044

30,319

42,251

24,313

1,408

7,625

7,257

16,172

9,291

4,612

8,717

9,587

15,850

6,070

$14,985,305

$4,679,423

$3,488,475

$5,207,461

$5,151,378

$1,265,561

$3,166,078

$110,372

$6,106,411

$8,225,679

$4,932,224

$494,788

$1,366,758

$1,583,035

$2,862,970

$1,747,446

$1,266,990

$2,412,946

$2,900,293

$2,876,300

$1,061,610

$17.61

$15.01

$21.62

$21.87

$18.00

$17.48

$20.36

$8.81

$16.78

$16.22

$16.91

$29.28

$14.94

$18.18

$14.75

$15.67

$22.89

$23.07

$25.21

$15.12

$ 14.57

2.9%

-5.5%

47.9%

9.2%

62.1%

13.5%

7.8%

128.4%

-21.2%

1.7%

2.6%

-40.9%

55.7%

25.8%

-9.9%

12.6%

65.0%

72.2%

-17.2%

-23.1%

408.4%

11.7%

-13.4%

73.1%

7.8%

71.7%

36.3%

19.4%

143.7%

-23.6%

-9.5%

-16.1%

-43.4%

60.7%

-6.2%

-8.3%

32.8%

58.2%

99.3%

7.3%

-30.2%

272.7%

8.5%

-8.3%

17.0%

-1.3%

5.9%

20.1%

10.8%

6.7%

-3.1%

-11.0%

-18.2%

-4.3%

3.2%

-25.4%

1.8%

18.0%

-4.2%

15.8%

29.7%

-9.2%

-26.7%

Rest of The United States - A Look at the Numbers

26

Destination of Shipments

If a winery chose to only ship its production to California,

Texas, New York, Florida and Illinois—the top five

recipient states for winery-to-consumer shipments—

that winery could cover 60% of the direct shipping

marketplace. California and Texas alone would get the

winery to nearly 45% of the total marketplace. However,

doing so would leave a great deal of current and future

profit potential on the table.

Certain states saw significant increases in shipments

in 2013. Among them are Maryland (+41%) which

is continuing to see a ramp up in shipments after it

legalized direct shipping in 2011 and New Jersey (+36)

where direct shipping of wine became legal in 2012.

Some states also saw notable reductions in the amount

of wine shipped to them in 2013 including Alaska

(-10.4%), Minnesota (-4.1%), Idaho (-3.8%), West Virginia

(-2.9%), New Mexico (-2.7%), Nebraska (-2.7%) and

Missouri (-2.2%) and New Hampshire (-1.3%)

The big five shipping states are the big five due largely

to the fact that they are the most populous states.

However, population is not necessarily the only indicator

of a states potential to be a significant destination

for direct shipments of wine. If this were the case,

Washington State would rank number 13 in shipments,

instead of number 6 and Oregon would rank number

27 instead of number 13. Washington, Oregon and

California rank high on the list of shipping destination

states in part because of the significance of the states’

wine industries.

Population and ProximityState

Alaska

Arizona

California

Colorado

Connecticut

D.C.

Florida

Georgia

Hawaii

Idaho

Illinois

Indiana

Iowa

Kansas

Louisiana

Maine

Maryland

Michigan

Minnesota

Nebraska

Nevada

New Hampshire

New Jersey

New Mexico

New York

North Carolina

North Dakota

Ohio

Oregon

Rhode Island

South Carolina

Tennessee

Texas

Vermont

Virginia

Washington

West Virginia

Wisconsin

Wyoming

Volume (Cases)

4,123

54,419

1,154,482

114,131

44,560

23,174

203,942

71,482

7,856

10,757

154,216

15,431

25,266

21,046

24,308

7,395

57,281

77,644

59,833

13,015

36,189

18,137

37,076

16,790

220,677

66,896

5,140

66,346

60,691

3,185

24,928

41,434

314,678

4,649

131,307

137,035

5,000

43,212

8,320

% of Volume

0.1%

1.6%

33.2%

3.3%

1.3%

0.7%

5.9%

2.1%

0.2%

0.3%

4.4%

0.4%

0.7%

0.6%

0.7%

0.2%

1.6%

2.2%

1.7%

0.4%

1.0%

0.5%

1.1%

0.5%

6.3%

1.9%

0.1%

1.9%

1.7%

0.1%

0.7%

1.2%

9.1%

0.1%

3.8%

3.9%

0.1%

1.2%

0.2%

Volume Change

-10.4%

1.0%

12.5%

11.4%

7.6%

-0.03%

10.6%

7.8%

1.9%

-3.8%

2.5%

3.1%

3.2%

19.5%

16.3%

49.6%

41.4%

21.0%

-4.1%

-2.7%

3.3%

-1.3%

35.9%

-2.7%

6.9%

0.8%

13.2%

13.3%

12.3%

-0.8%

13.0%

18.8%

4.8%

8.5%

12.6%

1.1%

-2.9%

-0.5%

-0.2%

Bottle per Capita

0.068

0.100

0.364

0.264

0.149

0.440

0.127

0.086

0.068

0.081

0.144

0.028

0.099

0.088

0.063

0.067

0.117

0.094

0.133

0.084

0.157

0.165

0.050

0.097

0.135

0.082

0.088

0.069

0.187

0.036

0.063

0.077

0.145

0.089

0.192

0.238

0.032

0.091

0.173

Price per Bottle

$43.90

$37.30

$37.64

$34.68

$41.06

$41.93

$39.72

$40.00

$50.66

$33.95

$40.95

$28.91

$34.91

$36.70

$37.77

$26.96

$28.80

$28.78

$35.77

$34.60

$39.00

$36.86

$47.23

$33.91

$41.10

$35.26

$27.20

$37.07

$37.16

$36.84

$33.44

$32.21

$41.18

$31.47

$31.47

$36.58

$32.93

$32.27

$29.69

Breakdown by Legal Shipping States

27

Destination of Shipments

Finally, it’s very instructive to look at which states have the highest amount of wine shipped on a per capita basis. The

top 10 states in Bottles of Wine Shipped Per Capita are:

The first thing to notice here is that the three most important wine producing states (CA, OR and WA) rank high in

shipments per capita. Wine drinkers support their own. Say what you will about the District of Columbia, it has some

of the most liberal wine shipping laws in America. Meanwhile, New Hampshire and Connecticut reside next door to

Massachusetts, where wine shipping is illegal and there is a population of significant wine consumers. It’s not unlikely

that many shipments to Massachusetts’s residents are landing at friends’ homes and offices in New Hampshire and

Connecticut.

-10.4%

-3.8%

-1.3%

35.9%

Alaska

Idaho

41.4% Maryland

49.6% Maine

-4.1% Minnesota

-2.2% Missouri

-2.7% Nebraska

New Hampshire

New Jersey

-2.7% New Mexico

-2.9% West Virginia

Change in Volume for Selected States (2013)

6 Oregon

7 Wyoming

8 New Hampshire

9 Nevada

10 Connecticut

1 District of Columbia

2 California

3 Colorado

4 Washington State

5 Virginia

28

Conclusion

The winery-to-consumer shipping channel has become

essential to the health and profitability of primarily

smaller wineries across the country. Additionally, it is

clear that an important sub-section of the American wine

consumer relies on this distribution channel.

What this year’s report makes clear is that growth is

still the watchword when describing the direct shipping

channel, despite the first-ever drop in overall price per

bottle shipped. Comparing growth in the direct shipping

channel versus growth in the overall off-premise retail

channel shows a significant difference between the two.

What is not directly addressed in this report is the

potential for growth of the direct-to-consumer shipping

channel. This is an important questions to established

and new wineries relying on this channel, as well as to

Current Trends Support and Optimistic Outlookthose considering entering the wine production side of

the industry.

Our belief is that based on the continued level of growth

in this channel over the past four years there remains

room for tremendous growth in the winery to consumer

channel. In fact, it is our estimate that even if none of the

eleven states where wine shipping is currently banned

legalized the practice over the next ten years, we still

would see significant growth across the channel. We do

not believe it is overly optimistic to assume a modest

average growth rate of 7.5% in the winery-to-consumer

shipping channel over the next decade. And if this kind of

growth in sales occurs, direct shippers can look forward

to sales of more than $3.2 Billion by 2013, a 107%

increase over 2013.

29

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Compliant provides wine and spirits suppliers and importers with a full suite of web-based software tools to ensure

compliance with federal and state regulations for direct and wholesale distribution. ShipCompliant works with the

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Wines & Vines offers a comprehensive collection of products providing news, information and marketing and re-

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For more information, see www.winesandvines.com

30

Wine Shipping Report

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