“A month bigger than Christmas”
With bars, restaurants and tasting rooms closed and wine drinkers confined to their homes, wineries and online wine retailers are seeing an increase in online sales as consumers stock up for virtual happy hours.
“The industry as a whole is having a bigger month than Christmas,” exclaims Jon Deitelbaum, President and CEO of Champagne Beau Joie.
Wine club direct to consumers Winc saw an unprecedented 578% increase in new member registrations week over week. Sales are at a standstill–the brand saw a 49.6% increase in direct-to-consumer sales week-over-week.
Since the pandemic began to spread in North America, Winc has welcomed more than 20,000 new members. The online wine club added an average of 2,102 new members per day, up from an average of 207 per day the year before.
Nielsen The data researchers noted that off-establishment wine sales in the United States increased 27.6% overall in the week ending March 14 compared to the same week a year ago.
The Vivino wine app is also watching sales soar. Friday, March 13 was its highest selling day on record, beaten only by Black Friday last year. The app primarily functions as a participatory wine rating system, but also allows consumers to shop from an inventory of hundreds of large and small retailers and wineries.
On Saturday March 21, Vivino recorded a 162% increase in gross merchandise in the United States. Italy saw greater growth, with a GMV of 282% on the same day. Other online wine merchants have seen similar increases. Acker wines saw a 50% peak in online sales, and Usual wines experienced a 25% increase.
“While people find themselves in these unusual circumstances, ”says Vivino founder and CEO Heini Zachariassen. “It’s great that we have the ability to do business online. Without it, many businesses, such as wine merchants and wineries, would be in a much more difficult situation. “
Vivino notes that compared to the $ 300 billion plus wine industry, e-commerce never really took off. But with sheltered drinkers at home, wine lovers are ordering in bulk.
Brian Smith, COO and co-founder of Winc, argues: “Working from home and social distancing is accelerating home consumption and the wider adoption of e-commerce in wine. Until now, the category has generally lagged behind other categories of consumers.
On a smaller scale, Gold medal wine club, an independent wine club that organizes small-production Californian wines, has seen sales soar. “We saw a huge increase of $ 517,800 in income in the last 28 days compared to the previous 28 days, ”says owner David Chesterfield. “It’s an increase of over 200%. ”
He also notes that the average revenue per sale is up 250%. The acquisition of new customers is up a modest 26%, so the majority of the increase comes from existing customers.
Kelly Dorrance, co-owner of Reeve Wines, was quick to bring their family business online, with great success. “It was Reeve’s best online selling week and a lifeline. Through online and phone sales, we have been able to keep our three employees on the payroll, which is a high priority for us.
The winery is offering free local same-day delivery to the Bay Area in a bid to take on Amazon. Her husband, the winemaker, delivers cargo in the back of his truck. “Let’s see Jeff Bezos jump on a truck and deliver your hand sanitizer!” ” she laughs.
Much of Reeve’s success is built on years of customer relationships. When the brand started shopping online, it called and emailed customers with the news. “Our X factor and number one priority has always been our intimate relationship with our customers, ”explains Dorrance. “We have been able to leverage our relationships with our customers now because we had them first. We have contacted all of our members by phone and personal emails which has been a great connection point even when we are not making a sale. And people love the human, albeit distant, connection that they get with the call or with a smile while depositing.
Some brands cannot count on consumer recognition. “For a new brand of wine launched two tasting rooms in April and July 2019, the closings of the tasting rooms are devastating ”, explains Kim Busch, owner of Folded Hills Wine Cellar. “Our fledgling business was closed overnight. “
Busch and his team worked 16 hours a day to create new sales channels. Now, they offer free home delivery, contactless pickup and are running paid social media advertising campaigns.
In response, there was a marked increase in sales and website traffic. “Interestingly, sales are coming from many parts of the country as well as a new local business,” she adds.
Deitelbaum de Beau Joie Champagne also noticed an expanded clientele. “IInquiries are coming in via social media asking if we can ship to everyone from Maine to Montana, ”he says. Despite the tumultuous times, consumers still buy champagne to celebrate milestones in life. “People try to improve their experiences with good meals, intimate gatherings and champagne.”
Kramer vineyardKim Kramer saw her online sales explode, up 362% from this year. It’s necessary–the family producer closed its tasting room on March 18, but they have seen a drop in foot traffic over the past month. “Sales from our tasting rooms are down 33% compared to last year over the same period. ”
Nonetheless, online sales fell from 5% of DTC sales to 24%. “We have sold more wine online in 2020 so far compared to all of 2019.”
At California Priest Ranch Wines, Marketing Manager Melissa Jackson has seen an increase in sales, “but that makes up for the lack of tasting room sales.”
Infinite Monkey Theorem Urban Winery saw its online orders increase by 50%, and in the tasting room, sales kept pace with the growth. In one hour on March 23, they made sales worth $ 1,200.
Gary Farrell Winery in the Russian River Valley also experienced an increase in sales. Sales for the second half of March are up 800% from the first half of March and up 500% from the same period last year.
But that doesn’t mean all is well. “Mall wholesale distributors are preventing their sales teams from making personal account presentations, and we are seeing distributors more cautious about the volume and timing of their inventory purchases, ”says Nancy Bailey, general manager of the winery .
“In the meantime, we have shifted our focus from wholesale to offsite grocery stores; club stores like Costco; independent retailers offering a delivery service; and online retailers like Wine.com recorded stronger-than-usual sales, with consumers stocking up for shelter.
The cellar has also turned to offering educational content, such as virtual tastings moderated by a sommelier.
But is the sales growth caused by alarmed consumers sourcing? Nielsen noted that large wine (+ 53%) and canned wine (+ 95%) packs are performing particularly well, indicating consumers are hoarding wine to help them weather the storm.
“For the week ending March 14, when many consumers were sourcing perishables, cleaning supplies and toilet paper, total consumer goods increased 40% across all of Nielsen’s US distribution channels ” says Danelle Kosmal, vice president of alcoholic beverages at Nielsen. “To me, this indicates that alcoholic beverages are important to consumers, but other categories of consumer goods are a priority, at least for now. As more on-site sites close, I believe we will continue to see off-site sales of beer, wine and spirits grow even more, and close the gap with other consumer goods. “
When the bans are lifted and life returns to its normal course, Deitelbaum expects wine sales to continue to prosper. “Celebrations, birthdays, bridal showers, missed weddings will now take place, conventions will be rescheduled and people will want to feel good after so much negative news day in and day out, ”she said.
Gary Farrell agrees. “I don’t believe the crisis will change our desire for interpersonal connection – the joy of sharing a conversation with friends and family over a delicious meal and a great bottle of wine (or two).”