Australian wine direct-to-consumer (DTC) sales in 2020–21 are reported to have grown by 17 per cent in value and 14 per cent in volume, compared with the previous financial year, outperforming other sales channels according to Wine Australia’s Wine Direct-to-Consumer Survey Report 2021 released today.
Across all DTC channels, the average retail sales value for survey respondents in 2020–21 was up 3 per cent to $239 per case.
Wine Australia Manager General Manager, Corporate Affairs and Regulation Rachel Triggs said that this was a positive response given the difficult conditions for businesses in 2020–21.
“Survey respondents reported that overall wine sales grew by just 1 per cent, so it was particularly pleasing to see a significant increase in DTC sales this year”, Ms Triggs said.
Online and cellar door sales were reported to have had the strongest value growth of the DTC channels in 2020–21. The survey showed cellar door sales revenue grew by 22 per cent, while online sales grew by 23 per cent. However, there was a drop in the average case value for online sales (down 14 per cent), whereas the average value per case for cellar door sales increased by 16 per cent.
“The report suggests that in regions not significantly impacted by COVID-19 restrictions, cellar doors performed well this year. Wineries reported adapting their business models to suit COVID-19 conditions, providing more tailored experiences for visitors that improved profitability,” Ms Triggs said.
Reflecting this adaptation in the survey was that the proportion of wineries charging for wine tastings increased from 54 per cent in last year’s survey to 73 per cent this year, and the average value for a tasting was reported to have increased by more than 30 per cent. The share of seated tastings also increased significantly, up from 44 per cent in 2019–20 to 66 per cent in 2020–21, and 71 per cent of respondents said that bookings were encouraged for all tastings (although not mandatory).
While cellar door sales have improved, the survey showed winery-owned wine clubs have struggled. Although wine club sales revenue was reported to have grown by 10 per cent in 2020–21, wine clubs’ share of DTC declined from 21 per cent to 19 per cent. Responses showed the average 9-litre case value also declined – down 5 per cent to $262 – while average value per member declined by 14 per cent as a result of the reduced average case value combined with a slight reduction in shipments per member.
Ms Triggs noted that, generally, a decline in average case value indicates reduced profitability – unless the cost of the product also reduces. “The survey found that more than 60 per cent of respondents were offering discounts of 11–20 per cent on wine club orders, which suggests that this channel is very competitive”, she said.
Survey respondents reported database sales also increased in 2020–21, growing by 15 per cent in value and 4 per cent in average case value. The average number of database contacts also increased, and the frequency of communication with contacts jumped substantially in the past two years, with the proportion of respondents sending communications at least bi-monthly increasing from 39 per cent in 2018–19 to 60 per cent in 2020–21.
Ms Triggs noted that the survey results were only part of the picture.
“The survey has given us an important insight into how some wineries have managed the first full year of ‘living with COVID-19’, but the sample is small, and there are a wide range of experiences across the country that are not reflected in overall averages”, she said.
“The important thing for wineries is to measure their own performance regularly, so they know which channels are doing well and where investment will be most beneficial.”
The full report can be downloaded from Wine Australia’s website.