Issue link: http://winesandvines.uberflip.com/i/629061
T en years after the Supreme Court pried open a legal passage for direct-to-con- sumer (DtC) wine shipments, the value of this sales channel approached the $2 billion mark in 2015. Wineries collected $1.97 million for 4.3 million cases of domestic wine. The total was 8% higher in revenue than in 2014. Sales by volume grew 9%, with 427,616 more 9-liter case equivalents sold in 2015 than 2014. The annual growth rate was lower than the previous year (15%) but higher than the 7% growth rate seen in 2013. DtC shipments have grown much faster in recent years than conventional off-premise sales in stores, as wineries rushed to take advantage of the higher margins from direct sales, and in some cases adopted the direct route as their only channel due to distributor consolidation. Wines & Vines partnered with ShipCompli- ant to create the model that calculates the DtC channel's growth. The first annual results were for 2011, when the sales total was $1.3 billion, meaning the cumulative growth through 2015 was 48% (see graph, left). December alone reached $177 million in sales. However, unlike off-premise sales, De- cember is not the peak month for direct-to- consumer shipments. December 2015 was 7% higher in value than the same month of 2014. Direct to Consumer pacing domestic growth and totaling $14.9 billion for 28% market share. Imported volume increased by 4.5%. BW166 began issuing reports in May 2015, and Moramarco said the goal is to "collect and make available the most accurate data on not just wine entering distribution but the value of wine, beer and spirits sales." His subscribers are wine and spirits producers as well as a mix of private equity investors and bankers. Moramarco has worked for wine and spirits companies his entire career, including Allied- Domecq, Constellation and Winebow. He has operated as a CEO of various companies for more than 20 years with net sales from $50 million to more than $1 billion. "I believe in fact-based decision making, and at times the numbers that were available didn't line up very carefully," he said. "What really drove me to start BW166 was that I wish I had had better data all those years ago." The company's name has a story behind it. Giuseppe Moramarco, Jon's grandfather, ac- quired Bonded Winery 166 from the Jesuits during Prohibition. This winery was known as California Mission Vintage Co. and was located in downtown Los Angeles, Calif. —Jim Gordon Off-premise sales of domestic wine grew by 7% in 2015 in stores analyzed by IRI, while the entire market for U.S. wine grew more modestly at 3%. METRICS February 2016 WINES&VINES 11 Direct-to-Consumer Shipments, Up 8% in 2015, Approach $2 Billion Source: Wines Vines Analytics/ShipCompliant model. 12 months through December 2015. ANNUAL DTC SHIPMENTS 2011 2012 2013 2014 2015 $ Millions $2,000 $1,500 $1,000 $500 0 DTC SHIPMENTS BY WINERY CASE PRODUCTION Winery Case Range DtC Cases Shipped DtC Value Shipped 500,000+ cases 234,103 $68,909,464 50,000-499,999 cases 1,374,227 $443,075,813 5,000-49,999 cases 1,899,013 $933,358,724 1,000-4,999 cases 646,551 $445,009,652 <1,000 cases 132,849 $76,314,545 2015 Total 4,286,743 $1,966,668,198 Source: Wines Vines Analytics/ShipCompliant. 12 months through December 2015. PHOTO COURTESY OF RALEYS