• by Erik Oster , July 31, 2023

D2C wine sales aren’t flowing as freely as the market would like.

Sovos ShipCompliant and WineBusiness Analytics released their collaborative “2023 Direct-to-Consumer Wine Shipping Mid-Year Report” examining shipment data from U.S. wineries today, which found a continued decline in volume and value in the D2C wine market following record peaks during the pandemic. The overall volume of wine shipped decreased 7% in the first half of 2023, to 3.4 million cases. Overall value, meanwhile, slipped 2% for the period to $1.9 billion– even as the average bottle price rose 5% to $46.12.

The decline in volume followed a similar drop last year from the 2021 peak of 4.1 million cases, but still represented an 11% increase from the pre-pandemic 2019 figure of 3.1 million, according to the report. Mid-size wineries seem to be struggling in particular, with wineries producing 1,000 to 4,999 cases per year seeing the largest decline in value shopped at 13%.

“At the midway point of 2023, the D2C shipment channel may not be hitting the highs of previous years, but it’s far ahead of where it was pre-pandemic and remains a dynamic and vital sector of the overall U.S. wine market,” Andrew Adams, an editor with WineBusiness Analytics, said in a statement. “And while wineries continue to contend with inflation, the D2C market remains the most effective way to engage with their best customers and create new ones in the intensely competitive total beverage alcohol market.”

There were bright spots in the report for certain regions, particularly Washington state’s reported 19% increase in value gains, and 7% increase in volume gains year-over-year, for shipments from the state’s wineries. Washington also saw the largest regional increase in average bottle price at 11%, followed by California' Sonoma and Central Coast regions at 10% and 9%, respectively.

While California remained the clear destination leader for D2C wine sales, with a 29% share of sales volume, the state saw a 14% drop in volume growth for the first half of the year. California’s Central Coast, was a regional bright spot for winery locations, however, and saw a 1% increase in value growth in shipments from the region for the first half of the year, compared to 2022.