DTC Wine Sales Continue to Grow

Direct to consumer wine shipments increased 18.5% to more than $2 billion in 2016, outpacing retail sales growth by more three to one, according to a new report.

"We haven't seen direct sales growth at this level since we started tracking the channel more than five years ago," said Kent Nowlin, general manager of Sovos ShipCompliant. "With more states allowing wine shipments, direct shipping has become a lifeline for small and medium-sized wineries. We're now seeing interesting growth in just about every segment we track."

The vast majority of wine in the U.S. is still bought through brick-and-mortar retail, but 5.02 million cases were purchased directly from wineries last year. That figure represents 8.6% of total retail domestic wine sales, according to the "Direct to Consumer Wine Shipping Report," which has been published annually since 2011 by Sovos and Wines & Vines.

\The growth is being driven by gradual changes in state regulations, increased adoption of e-commerce business models, and a steady shift in consumer behavior "as the popularity of ordering wine online and enrollment in wine clubs increases," said Chet Klingensmith, publisher of Wines & Vines. Direct wine sales are now legal in 45 states and Washington, DC.

Sovos offers tax, compliance and business-to-government reporting software and has roughly 1,500 winery clients. Wines & Vines offers a comprehensive collection of products for industry news, information, and marketing and research, including an eponymous monthly magazine.