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Photo: Elements Margaret River

Cellar doors at the heart of Australian wine direct-to-consumer sales

Market Bulletin | Issue 131
Photo: Elements Margaret River
30 Oct 2018
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Opportunities to increase direct-to-consumer (DTC) sales through paid tastings, food and wine pairings and enhanced wine tourism experiences are among the key findings of Wine Australia’s inaugural Cellar door and direct-to-consumer survey.

Wine Australia today released the full findings of its August 2018 survey of Australian wine companies, conducted as part of the Australian Government’s $50 million Export and Regional Wine Support Package (the $50m Package).

The survey results show that cellar doors are the driving force behind direct-to-consumer sales in Australia, accounting for 44 per cent of DTC revenue, ahead of wine clubs and mail orders.

Overall, direct-to-consumer sales accounted for 10 per cent of all domestic wine sales for the survey’s respondents. This result is consistent with previous estimates by Wine Australia and means that DTC channels account for around 5.5 million cases of wine sold annually.

Wineries that produce fewer than 1000 cases relied on direct avenues for 68 per cent of sales and wineries in the 1000–5000 case bracket achieved 40 per cent of sales through DTC channels.  Approximately two–thirds of Australian wineries produce fewer than 5000 cases, which highlights the importance of DTC channels to the majority of wine businesses.

In contrast, wine brands with production above 50,000 cases recorded just 4 per cent of sales through DTC channels.

Figure 1: share of revenue by DTC channel and winery size

Cellar doors offer a number of significant opportunities for wineries to build their DTC wine sales. The survey found that only 29 per cent of wineries charge for standard tastings, whereas in the United States of America (USA), the majority of wineries charge for tastings[1] and it is considered best practice to do so, as this generates more perceived value for the wine. Most survey respondents that charged for tastings offered reimbursement of the tasting fee through a purchase of a minimum amount or a minimum number of bottles. However, only 4 per cent of respondents offered a reimbursement based on joining the wine club. This is another area of opportunity, as the average lifetime value of a wine club member was found in the survey to be just under $2000.

Significant investments are being made in cellar doors. The survey found two-thirds of cellar doors were open 7 days a week, 86 per cent offered food in conjunction with wine, and over half provided vineyard and/or winery tours. However, only 28 per cent reported offering food and wine matching as a tasting option (Figure 2), which is another potential opportunity for wineries to build on, as food and wine tourism is a growing market and there is little extra investment required when both food and wine are already offered in the establishment.

Figure 2: types of tasting service styles offered at the cellar door

The full Cellar door and direct-to-consumer survey 2018 report can be found here.

[1] WBM/SVB Tasting Room Survey 2017

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This content is restricted to wine exporters and levy-payers. Some reports are available for purchase to non-levy payers/exporters.