Summer Sipping: Has Wine Country Been A Ghost Town?
By Andrea Smalling
September 16, 2022
Recently, there have been some high-profile articles written about the lack of visitors to Wine Country this summer. The articles cite several factors including the high cost of fuel, airfare and lodging - which we also referenced in our Q2 2022 DTC (Direct to Consumer) Report. Follow-up articles have added to the discussion, blaming high tasting fees and the increasing use of reservation-only models that may be a deterrent to visitation.
As you know if you read our DTC Report, we have the data, and while there may be a dip compared to last year, the results show that wine country is far from a ghost town.
Looking at our U.S.-based winery data, in May through August 2022 there were fewer orders (down 6%) and less money spent (down 3%) in winery tasting rooms compared to last year. This is a significant shift in the trend established in January through April of this year when orders were up 23% and dollar sales up 34%.
Total orders are down only 6% since May. This does not support the “ghost town” description at all.
While this summer may feel quite different compared to the post-pandemic honeymoon period earlier this year that saw year over year sales increasing 23% as consumers flocked to take part in their favorite wine country experiences again, wineries are selling about as much wine as last year, and at a higher price.
While the sky isn’t falling, we do need to continue to pay attention to what’s happening in the market so we can make strategic decisions that will make the most sense for our businesses. Here are some suggestions:
Nurture your wine club members. If your visitation has been down even slightly, club sign-ups may have dwindled. Do all that you can to take care of these particularly important consumers as they are worth over half of all wine DTC volume.
Don’t forget about ecommerce! The winery community thrived in 2020 when wineries were completely closed by focusing on ecommerce plans. Let’s not let those learnings go to waste – the ecommerce channel, with its high AOV (Average Order Value), is worthy of focus. Here are some reminders of what steps to take.
For wineries who’ve moved to a reservation-only model, with capacity on-site and wine to sell, consider a “locals” program where visitors don’t need a reservation and can show up to sample a specific flight of wines. Choose times that aren’t as busy and wines that you have on-hand to sell. Don’t forget that tasting room visitation is a key driver of trial, so providing some ability for new visitors and young consumers to experience your wines is important for future growth.
There’s been a lot of press about the high cost of travel. Partner with a local restaurant and hotel or Bed and Breakfast to provide special packages for a great meal, lodging, and a special on-property experience that you can promote to appeal to potential visitors. A comprehensive package may be just what they need to see the value of visiting.
If you are short on the 2020 vintage for some of your key wines, build a tasting around the wines you do have available and for enthusiasts/members, include a barrel tasting of the next vintage and an opportunity to buy in advance of the release. Have your winemaker or hospitality staff describe all the reasons why the release will be a special one and people will be happy to reserve their allocations.