(Wines&Vines) - Most Napa wineries will not survive without an increasing emphasis on direct-to-consumer sales, according to Rob McMillan, executive vice president and founder of Silicon Valley Bank’s wine division.

He spoke Thursday during a community meeting the Napa Valley Vintners organized to foster communication between area residents and members of the wine industry. McMillan offered a preview of information he will present to Napa County Commissioners looking at changes in regulations in a few weeks. His findings were based on a survey of 60 Napa Valley clients and prospects, primarily family-owned, medium-size and small wineries, as part of the bank's larger annual Wine Conditions Survey. According to statistics kept by Wines Vines Analytics, Napa County is home to 1,042 wineries.

Attendees were likely surprised to learn how the business model of Napa Valley wineries has changed over the years. Noting that 95% of Napa Valley wineries are family owned, and 78% make less than 10,000 cases per year, McMillan made a strong case that direct sales are vital to most of these wineries.

Importance of direct sales

“Wholesalers don’t want small wineries. Distribution isn’t available for most wineries, so they have had to elect more direct-to-consumer options,” he said. “Forty-five percent of a typical Napa Valley winery’s sales are direct,” primarily through the wine club and tasting room.