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Online sales jump to 23% of US direct-to-consumer wine revenue

Data continues to pour in about the speed of the shift of wine, beer and spirits sales directly to U.S. consumers amid the coronavirus-related disruptions to the economy in the past nearly three years.

The latest figures from major beverage alcohol industry lender Rabobank suggest that the share of online sales out of all off-premises purchases of such libations doubled from pre-pandemic levels, reaching $6.1 billion nationwide last year. And the report forecast that the online channel is set to be the biggest driver of industry growth for years to come.

Online sales totaled about 4% of off-premises alcohol sales in the U.S. last year, up from almost 1.9% of sales in 2019, according to RaboResearch’s newly released “2022 Alcohol E-commerce Playbook.”

One of beverage alcohol’s four main e-commerce channels is wine direct to consumer, the report said. On top of 73% growth in such sales in 2020 as tasting rooms largely in California were closed for months of that year, winery online sales last year continued to be “far above pre-pandemic levels,” even as tasting room sales bounced back to record levels.

Online sales now represent 23% of the $7.2 billion in revenue from U.S. direct-to-consumer wine sales, the report said.

California opened direct-to-consumer shipments to the state’s craft distillers during the pandemic, extending that allowance to March 31 from a planned sunset at year-end.

E-commerce will be the No. 1 driver of beverage alcohol industry growth over the next decade, according to Bourcard Nesin, a RaboResearch Food & AgriBusiness beverages analyst and author of the report. He said it will be a “component of brand building, awareness, and trial, both online and in-store."

"Companies that fail to proactively invest in their e-commerce teams will struggle to remain relevant and retain market share," he said in the announcement about the report.

The other three major beverage alcohol e-commerce channels noted in the report are online grocery, online alcohol marketplaces and licensed specialty retailers.

Online sales of libations from grocery stories jumped 238% year over year in 2020 and another 9% last year, the report found. Such sales are expected to grow 15% this year as the number of stores that offer online orders has jumped dramatically.

Two online marketplaces — Drizly, now owned by Uber, and Instacart — command 86% of sales in that channel, the report noted. The addition of millions of consumers and thousands of stores that use their platforms led their sales to jump 274% year over year in 2020, with another 15% growth expected this year.

And large chain liquor stores, state-owned stores and independent shops have jumped into online orders, with sales growing 151% in 2020 from the year before. That growth was driven by operators offering local delivery and curbside pickup for the first time.

Jeff Quackenbush covers wine, construction and real estate. Before the Business Journal, he wrote for Bay City News Service in San Francisco. He has a degree from Walla Walla University. Reach him at jquackenbush@busjrnl.com or 707-521-4256.

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