Experts: North Coast wineries should prep for more diverse tasting room visitors

North Coast vintners should prepare for tasting-room visitors who are younger and more ethnically and financially diverse than they may be used to, according to a panel of tourism and wine industry experts Tuesday.

And that’s important because these venues are key places for wineries to build lasting relationships with consumers via clubs, which proved vital in buoying direct-to-consumer wine sales last year after a significant pull-back in orders amid worsening economic news, said speakers at an invitation-only webinar outlook for wine tourism and DTC sales.

“In contrast to the way the boomers fueled what you might call the first generation of expansion in winery DTC sales and visitation, they're actually planning on much lower rates, whereas the younger consumers are planning at much higher rates,” said Christian Miller, research director for Napa-based industry market research group Wine Market Council, which put on the event.

He called this a “change of the guard.”

Miller was citing results from the group’s fall 2021 U.S. Wine Consumer Segmentation Survey of 1,772 domestic consumers. It found that 15% of California boomer respondents at the time planned to visit a winery in the next year or two (2022–2023), while 27% of Gen Xers, 34% of millennials and 46% of age-21-plus Gen Zers at such plans.

In the same survey conducted last fall, the proportion of white wine consumers who had previously visited a California winery and planned to go back to one in the next two years (2023–2024) dropped 10 percentage points (22% from 32%). Yet the proportion of Black wine consumers who said they would do so nearly doubled (31% from 17%), and it jumped 10 percentage points for plans to visit Oregon and Washington wineries.

Hispanic wine consumers’ stated plans in the survey were consistent with what they said they’d done previously. Asian wine consumers intentions to visit California wineries dropped 10 percentage points (41% from 51%), but their plans for going to Pacific Northwest wineries soared 22 percentage points (29% from 7%). The council notes that Hispanic and Asian wine consumers are over-indexed in the survey from proportions in the U.S. population.

“You're going to see a different mix of people coming into your tasting rooms,” Miller said.

A fall 2022 Wine Market Council survey of 1,772 U.S. wine consumers found more interest at visiting wineries among non-white ethnic groups. (Wine Market Council)
A fall 2022 Wine Market Council survey of 1,772 U.S. wine consumers found more interest at visiting wineries among non-white ethnic groups. (Wine Market Council)

The council worked with research firm EthniFacts for the past couple of years to discover how diverse groups of consumers engage with wine. The latest of the reports, released in September, uncovered 10 barriers Hispanic and Black consumers found with embracing the beverage. Among them is that wine marketing lacks visual energy, is “too white” and exclusionary, “not manly,” and doesn’t “collaborate with diverse influencers.”

“Diverse consumers make up over 50% of millennial and younger generations vs. 28% or less of boomer and older generations, making efforts to better serve people of color an imperative for future growth,” EthniFacts CEO Mike Lakusta said at the time of that report. “Our research clearly shows that many diverse consumers feel wine marketing and product offerings have missed the mark, as other beverage alcohol categories can appear more exciting and relevant.”

Reaching new markets for wine consumers comes amid industry reports in the past few months that highlighted slowing DTC sales and warn of a demographic shift toward younger consumers who may not be as loyal to wine as boomers have been. Napa-based industry banker Rob McMillan, Recently shifted to First Citizens Bank with its acquisition of Silicon Valley Bank, wrote that this is a “a pivotal point of change” for the business.

In its 2022 DTC sales recap released in February, Sovos ShipCompliant and Wines Vines Analytics tallied the first overall drop in both direct-sales value and volume last year, but wines selling for over $100 a bottle enjoyed 15.2% growth in dollars and 7.8% in bottles sold.

But those researchers noted that the reductions in overall DTC value and volume could also be seen as a return to the growth trend line seen in the years leading up to the huge jumps in pandemic sales volume during 2020 and in dollar volume during 2021.

Miller of Wine Market Council said those figures suggest “all the tumult of the last couple of years has really been mostly pandemic-driven.”

“And we're now roughly at where we are as governed by the forces that were in place before the pandemic,” he said.

And last week, Napa-based DTC services firm WineDirect released its 2022 report based on Enolytics analysis of sales transactions WineDirect manages for its roughly 2,000 winery clients. It found that net sales revenue grew 7.5% last year, down from 23% in 2021 but above 2% in 2020 and 6% in pre-pandemic 2019. Meanwhile, the number of cases sold last year was statistically unchanged, down from 8% growth in 2021, 20% in 2020 and 13% in 2019.

“All of that growth that we saw in net sales (revenue last year) was purely a result of increased pricing and/or decreased discounting,” said Andrea Smalling, WineDirect chief marketing officer and a speaker at Wine Market Council’s webinar Tuesday.

The company saw average discounting rise from 15.2% in 2019 to 17.7% in the first pandemic year, ramping down to 15.4% in 2021 and 14.9% last year, on par with the 2018 level.

After strong DTC sales revenue growth WineDirect tracked in the first three quarters of last year, compared a year before, revenue for the wine business’ all-important fourth quarter was down 7.9% last year, and last-quarter volume was down 9.9%.

Smalling said the difference in the Napa company’s sales figures for last year from those of Sovos ShipCompliant is that WineDirect’s includes point-of-sale transactions at tasting rooms. But last year, tasting rooms that had buoyed wineries as DTC sales shifted from the websites during the shutdowns of 2020 to the reopened venues of 2021 encountered slower visitation in 2022.

This came amid soaring gas prices and consumer prices, which both peaked last June but remain well above pre-pandemic levels.

“For the first time in a couple of years, point-of-sale transactions through tasting rooms didn't pick up the slack,” Smalling said. “That's where you're really seeing kind of a flattening out of overall results for 2022. Then, e-commerce continued to decline. The clear savior has continued to be the club channel. Those loyal winery club members are continuing to buy wine at record amounts, and they actually took on a lot of price increases in 2022. It didn't faze them at all. They kept buying.”

Jeff Quackenbush covers wine, construction and real estate. Before coming to the Business Journal in 1999, he wrote for Bay City News Service in San Francisco. Reach him at or 707-521-4256.

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