Australian wine direct-to-consumer (DTC) sales in 2020-21 have grown by 17 percent in value and 14 percent in volume, compared with the previous financial year, outperforming other sales channels.
This is according to Wine Australia’s Wine Direct-to-Consumer Survey Report 2021 released today.
Across all DTC channels, the average retail sales value for survey respondents in 2020-21 was up three percent to $239 per case.
Rachel Triggs, Wine Australia general manager, Corporate Affairs and Regulation, says, “Survey respondents reported that overall wine sales grew by just one percent, so it was particularly pleasing to see a significant increase in DTC sales this year.”
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 percent, while online sales grew by 23 percent. However, there was a drop in the average case value for online sales (down 14 percent), whereas the average value per case for cellar door sales increased by 16 percent.
“The report suggests that in regions not significantly impacted by Covid-19 restrictions, cellar doors performed well this year,” Ms Triggs says.
“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 percent in last year’s survey to 73 percent this year, and the average value for a tasting was reported to have increased by more than 30 percent.
The share of seated tastings also increased significantly, up from 44 percent in 2019-20 to 66 percent in 2020-21, and 71 percent 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 percent in 2020-21, wine clubs’ share of DTC declined from 21 percent to 19 percent. Responses showed the average nine-litre case value also declined – down five percent to $262 – while average value per member declined by 14 percent as a result of the reduced average case value combined with a slight reduction in shipments per member.
Ms 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 percent of respondents were offering discounts of 11-20 percent on wine club orders, which suggests that this channel is very competitive,” she says.
Survey respondents reported database sales also increased in 2020-21, growing by 15 percent in value and four percent 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 bimonthly increasing from 39 percent in 2018-19 to 60 percent in 2020-21.
Ms 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 says.
“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.”
The full report can be downloaded from Wine Australia’s website.