US Now the Top Wine Market: What it Means for Online Wine Sales
You could soon be experiencing an increase of direct-to-consumer sales because the U.S. just topped France as the largest wine market in the world for the first time, according to a report from OIV, the International Organization of Wine and Vine. Wineries may able to boost their online wine sales as this trend continues.
"In countries such as France, Italy and Spain, people used to drink a lot of wine, but consumption habits are changing," Jean-Marie Aurand, OIV director general, said at a news conference in Paris, according to Reuters.
Aurand added that wine drinkers in the U.S. tend to go for higher quality products. Compared to countries like France, the U.S. is still behind in the amount of wine consumed per person. The average French wine drinker consumes 1.2 bottles per week, which is six times more than the average American.
More opportunities for DTC sales, but new challenges for wineries
The popularity of wine is growing in the U.S. It's even starting to influence regulations. The legislation regarding wine shipping is highly complex, but more states could soon open, which would create new opportunities for wineries. Currently, most states allow DTC shipping, according to Free the Grapes, a DTC advocacy organization.
Massachusetts could be the next state to open for DTC shipments, CBS Boston and The Associated Press reported. The movement in the state was spearheaded by former New England Patriots' quarterback Drew Bledsoe, who owns and operates a winery in Washington state. In 2013, Bledsoe visited the statehouse to encourage lawmakers to pass new legislation enabling DTC shipments. He said the current regulations made it virtually impossible to sell to customers in Massachusetts.
Arkansas and Montana both adopted DTC legislation in 2013, but the Arkansas regulations are very limited. Consumers are only allowed to purchase one case per person per calendar quarter, Wines and Vines reported. In addition, wineries need to collect excise and a 6.5 percent state sales tax. Because of the costs of wine shipping can be high, consumers may not want to pay the additional fees. Nebraska and North Dakota updated their DTC legislation in 2013 as well, according to Wines and Vines.
While some states will most likely not make the move to lift DTC restrictions, the overall trend reflects the growing influence of online wine sales. With Massachusetts potentially opening this summer, wineries could reach a new target audience, which could be especially beneficial for small wineries to increase their sales, the CBS article indicated.
With the growing popularity of ecommerce and shifting regulations, wineries need to prepare for new opportunities and challenges. Ecommerce models are solidifying as a viable way to reach customers in a larger target market, but you need to stay compliant with existing legislation.