The wine industry is growing more than just grapes…

It’s cultivating sales as well. Direct-to-Consumer (DtC) sales increased by 30% in May 2016 compared to May 2015. DtC shipments are a fast-growing segment of wine sales and larger wineries are getting more involved in the action.

Wine Industry

The DtC sector is not the only one showing positive growth. Wine Industry Metrics reveals total U.S. wine sales increased by 1%, from $2.61 billion to $2.63 billion, for the month and 2%, from $35.8 billion to $36.6 billion, for the year.  Domestic off-premise sales (i.e. wine shops, grocery stores) in May grew 5% higher than last May and the 52-week growth was 6%. In addition to strong sales, the Winery Job Index also shows a 6% growth for the month and 9% for the year.

There is no doubt about it. The wine industry is booming with plenty of room to grow. According to the 2016 SVB Wine Report, we can expect to see an overall 9-13% growth in fine wine sales.

Wine Industry

Online wine sales are expected to increase over the next few years.

Demand is increasing among Millennials and Gen X consumers. Gen X will surpass baby boomers by 2021, becoming the largest fine wine consumer demographic in the U.S. By 2026, Millennials will surpass Gen X to become the largest demographic of fine wine consumers.

Since 2000, world wine consumption outside of Europe has increased from 31% to 39%. The United States currently is the world’s top wine-consuming country. Other countries such as the United Kingdom, China, Russia, and Australia also are consuming more wine these days.

Thanks to technology and the Internet, people are becoming more interested in wine than ever before. Buying wine online provides more options. People are searching for information on the Web and even enrolling in wine education courses. Wine apps are also hot right now, giving consumers access to a database of wine information, tasting notes, and reviews, all with the touch of a button on their smart phones.

While current trends are leading to positive growth in certain sectors and total wine sales have increased, there is one area that did not reap the same results…

Wine Industry

On-premises wine sales decline.

Restaurant and bar (on-premises) sales information suggests a declining growth rate. This may be due to more at-home consumption and consumers becoming more frugal in their spending. According to officials, millennial consumers are more likely to start with a beer or cocktail, then have a glass of wine rather than a bottle of wine with dinner.

Still, the future state of the wine industry overall looks bright. Demand for fine wine continues to grow, sales of wines priced at $20 and up are anticipated to increase, and DtC sales will continue as the largest growth channel for most wineries.