Live Tastings Help Drive D2C Growth At Vintage Wine Estates

Omnichannel diversification and strong D2C sales helped lift revenues 33% for Vintage Wine Estates Inc. in its first full year as a public company.

In addition to D2C—encompassing wine club memberships, ecommerce, tasting rooms, telephone sales and the QVC home-shopping network—Nevada-based Vintage Wine wholesales to distributors and sells B2B via select retailers.

Net revenue was nearly evenly divided across B2B (39%), D2C (32%) and wholesale (29%) in fiscal 2022 ended June 30.

Representing the company’s highest-margin business, D2C grew revenue by 29% in the fourth quarter and 39% for the year.

“Our direct-to-consumer segment continues to demonstrate the strength of our digital marketing capabilities and our customer focus,” Vintage Wine president Terry Wheatley said on an earnings call with financial analysts last week.



“We hit new records in our tasting room traffic and club membership in the quarter.”

Cowen and Company sounded a cautionary note in a Sept. 14 report that noted an apparent slowing of the record tasting-room traffic in the new fiscal year started in July.

On the earnings call, Cowen analyst Vivien Azer asked about industry trends going forward.

“I think in terms of industry growth, we may even be looking at it in a negative to slightly flat category growth in the overall category for the premium segment of the wines,” said Vintage Wine founder and CEO Pat Roney.

“But we think the price increases are holding—we haven't seen a lot of trading down, and certainly not trading down below the $10 category segment.”

Established in 2000, Vintage Wine has made approximately 20 acquisitions over the past decade on the way to becoming the 14th-largest U.S. wine producer.

Between October of 2021 and January of this year, Vintage Wine acquired the Vinesse LLC winery, ACE Cider and Meier's Wine Cellars Inc.

Soft spots in the fourth quarter included wholesale, driven in large part by a decline in the Layer Cake wine brand that came with the Meier’s Wine Cellars portfolio and typically sells for under $20.

Layer Cake “was caught between I want to say a rock and a hard spot during pandemic,” Wheatley told analysts last week. “And then as things have come back, it's in a price segment that is struggling a bit.”

The company is working on “a complete repositioning and a whole new marketing campaign” for Layer Cake, Wheatley added.

Layer Cake’s presence on QVC can be seen here.

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