Weather, economy blamed for winery direct sales hit in Q1

New data on winery direct-to-consumer sales in the first quarter of this year show significant impacts to tasting room, website and club sales, attributed to a one-two punch of dreary Wine Country weather this year and more uncertainty about the economy.

The first three months of the year historically is a lower-revenue period for wine tourism because of cooler temperatures and rain — or snow for East Coast vintners. But the start of this year was noticeably different, said Cathy Huyghe, co-founder and CEO of Enolytics, at the Business Journal’s Wine Industry Conference on April 20.

“March, my friends, was bloody, I’m sorry to say,” Huyghe said.

Overall winery net direct sales revenue was down each month from a year before, but all the months this year were ahead of corresponding months in 2019—2021.

But context is key here, Huyghe said. Early 2022 was a standout period for the wine business as pandemic restrictions lifted and traffic to tasting rooms picked up in earnest. That also applied to last year as a whole, particularly the first six months.

Early this year, winery direct-sales volume was down year over year. The number of cases sold was off by 2.4% in January, 9.2% in February, 14.6% in March and 10.1% for the quarter.

West Coast wineries, especially in the North Coast, Central Coast and Washington, are taking the biggest hits to case sales volume in the first quarter, Huyghe said.

Huyghe’s Atlanta-based firm focuses on big-data analysis for wine-related companies. One client is WineDirect, a Napa-based e-commerce and fulfillment platform for over 2,000 vintners. Enolytics has been working with WineDirect to create a more comprehensive report at what’s happening in direct wine sales by incorporating vintners’ tasting room sales data, in addition to what goes through order-fulfillment channels. The pool of five years of anonymized data includes 250 million-plus transactions by 29 million consumers totaling $10 billion.

Looking more closely at that data, Huyghe noted that tasting room net sales in the first quarter were tracking with the standout early 2022 performance — until February.

Cold, rainy days may have played a role, Huyghe said. Last year’s opening quarter was the third year of the drought. She noted that Napa had only four days of rain in the period last year, compared with 24 days this year. Average temperature in the city this past quarter was 7 degrees lower than a year before.

“I'm happy to have seen all the all the rain, but it probably kept visitors away from the tasting room channel, which also means that clubs’ sign-ups were probably down as well,” Huyghe said.

First quarter sign-ups had the lowest rate of growth in five years of data on a quarter-billion transactions from North America and Australia, Huyghe said. The average rate of new club memberships peaked at 8% in the first three months of 2019, a year before the pandemic.

Meanwhile, the average first quarter club attrition rate — the proportion of members who dropped out — has been climbing. It was 4% in early 2019 and was 8% this year, matching the beginning of the pandemic in early 2020.

The result is that average first quarter winery club growth went from 4% in 2019, hovered around zero in 2020—2022 and dropped to negative 3% this year.

In the WineDirect data analysis, club sales accounted for 54.3% of all direct sales in the first quarter, topping the 53.3% share in early 2020. Tasting room sales were 28.5% of direct sales, down from 30.5% early last year and 34.1% pre-pandemic.

Remi Cohen, CEO of Domaine Carneros and a conference panelist, said visitors had returned to the landmark Napa Carneros château fronting Sonoma Highway.

“Since about April of 2021 through the majority of 2022, we were seeing the highest visitation we had ever seen, including booking up to our county maximums during the week on Tuesdays and Wednesdays, which wasn't always the norm pre-pandemic,” Cohen said.

And average spending per guest was up almost 50% from before the pandemic, attributed to the launch of higher-end experiences at the estate and increased bookings for them.

But in the first quarter, the winery has seen a “slight reduction” in midweek bookings, and average spending per visitor is down.

“People are still engaging in the elevated experiences, but some of them are trading down to the regular tasting experience,” Cohen said. “And we're not seeing quite as much bottle sales. So we're feeling pretty good because the visitation is still strong.”

Domaine Carneros’ enhanced experiences cost $95 —$175 a person, with a $25 deposit, while the daily tasting option for four-wine flights costs $40 —$60 per person. Key to driving more visitation coming out of the pandemic, Cohen said, has been added customization of unique experiences, such as demonstrations of the art of sabrage, the centuries-old skill of removing corks with the swipe of a saber.

What also helped, Cohen said, was the winery’s rollout out a major e-commerce upgrade in April 2020, just a few weeks into the pandemic.

Wine digital marketing expert Alex Jones told the conference audience of over 200 that a key way to attract more club members is to talk with existing members about what features and messaging convinced them to join.

“Social media is just an amplification of your brand voice and your brand in general, so make sure that your messaging is cohesive. Make sure that you set your clear goal, and then play the long game. It's not going to happen overnight. It has to be a collection of activities,” Jones said.

Jeff Quackenbush covers wine, construction and real estate. Reach him at or 707-521-4256.

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