Wine Sales, Hiring Strong in February

Mar 17, 2015

(Wines&Vines) - All of the key industry metrics tracked by Wines Vines Analytics exhibited positive growth in February.

Direct-to-consumer shipments for the month were 4% higher than during the same time last year. Rebounding from the typical post-holidays slump seen in January, DtC shipments rallied 11% in volume, according to the Wines & Vines/ShipCompliant Model, and the 12-month total value of all shipments grew by 14%. The entire February metrics report is available here.

February DtC sales totaled $132 million. For the third month in a row, the overall value of wines shipped direct to consumer during the most recent 12 months surpassed $1.8 billion. To offer some perspective, this was higher than winery revenues from U.S. wine exports, which totaled $1.49 billion in 2014, according to the Wine Institute.

The average bottle price for DtC shipments was $36.87, a decrease of 6% from February 2014. The highest monthly bottle price during the previous 12 months was logged in November, when it reached $45.44. The lowest was in July, when it dipped to $29.57. July is also typically the slowest month in DtC volume. The highest monthly volume was recorded in October.

Small wineries—those with annual production of 5,000-49,999 cases—took the largest market share in DtC shipment value during the 12 months ending in February. The value of their sales was $883 million, representing 48% of the total, and the volume was 1.8 million cases.

Medium-size wineries—those producing 50,000-499,999 cases per year—were second (23% of all DtC sales), with $428 million in sales and 1.3 million cases. A close third were wineries producing between 1,000 and 4,999 cases, with $389 million and 21% of the market.

Winery hiring strong

To evaluate hiring activity by wineries, Wines Vines Analytics uses an index tied to the job offer postings at Winejobs.com. This index was set at 100 in January 2007 and its percent change over subsequent months provides a gauge to track if hiring activity is increasing or decreasing.

The overall index grew 26% compared to February of last year and the 12-month growth rate was 16% higher than the same period last year. The winemaking subcategory, which includes job offer postings for positions in winemaking and production, led the index growth with a 53% increase and the hospitality subcategory saw a 26% increase. The sales and marketing index, which had recently rallied from a prolonged decline, fell 10% compared to where it was last year.

Off-premise sales up 7%

Monthly off-premise sales of domestic wine in February rose 7% from February 2014, making two months in a row when the monthly growth rate was higher than the 52-week rate. The data reflect results for combined table wine and sparkling wine produced by U.S. wineries and sold in stores tracked by Chicago, Ill.-based market-research firm IRI.

Domestic table wine alone rose by 6.7%, while domestic sparkling wine rose by 13% during the four-week period ending Feb. 22. Sparkling wine accounted for just 5% of domestic wine sales value, but its growth was strong enough to boost the combined sales growth rate above 7%.

From the longer view of 52-week sales, the domestic growth rate was 5% for table wine and 7% for sparkling, highlighting the optimism of the current February data.

The news was even better for domestic varietal wine in 750ml sizes. These sales grew by 8% in four weeks and 6% in 52 weeks, according to IRI.

Sales below $8 shrinking

California wine producers and industry analysts in recent months have been discussing what may be an evolving dichotomy in the wine market, where lower priced wines are flat or decreasing in sales, and higher priced wines are growing—sometimes dramatically.

The latest IRI data show that dichotomy clearly in the accompanying graph of Off-Premise Growth by Price Segment. This graph includes both domestic and imported table wines but excludes sparkling, and covers 52 weeks. It’s an issue of special interest to California grape growers and wineries, since California accounts for 73% of table wine sales in IRI’s data.


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