Australia exports around two-thirds of its wine production and most of the remaining one-third is sold in the domestic market through alcohol retailers. Wine sold directly to consumers only makes up around 10 per cent of the total volume of domestic sales; however, this statistic does not do justice to the value and profitability of the direct-to-consumer (DTC) sales channel.
For the more than 2000 wineries in Australia that produce fewer than 50,000 cases of wine per year, direct-to-consumer channels are a very significant part of their revenue. Wine Business Solutions estimates that more than 40 per cent of revenue for these businesses comes from DTC channels, while in the United States of America (USA) it is more than 60 per cent of revenue. In 2018, the total value of DTC shipments in the USA grew by 12 per cent to more than US$3 billion.
The cellar door: more than just a sales channel
By far the most important DTC channel for Australian wineries is the cellar door. There are around 1600 cellar doors in Australia, meaning that around 80 per cent of wine businesses have one. The cellar door accounted for 44 per cent of all DTC revenue on average in 2018. Cellar doors offer opportunities to link with wine tourism, offer value-adding experiences and connect with younger consumers, build converts and convey story and authenticity. The cellar door is a good place to sign up wine club members and hence build an ongoing relationship with the customer.
Wine Intelligence (2017) found that 53 per cent of Australian regular wine drinkers had visited a cellar door in the past 12 months, with those aged 25-34 significantly more likely to have visited than those aged 55 and over. Three-quarters of visitors were found to purchase wine at the cellar door (Wine Australia 2018) and consumers are willing to pay more for wine at the cellar door than in other DTC channels (see Figure 1).
Figure 1: comparison of average purchase price per bottle for different sales channels.
Source: Wine Intelligence
Wine clubs and websites: direct over distance
Wine clubs are also an important source of direct sales, with the advantages of minimal infrastructure requirements and greater geographical reach. Club sales accounted for 14 per cent of DTC revenue in 2018, while club members were found to spend an average of $569 in that year on wine club purchases.
A website is an essential part of doing business in an online world, and for wineries can be a very important marketing, data capture and analysis tool, as well as an avenue for sales.
There are other DTC opportunities such as telesales, events and sales through on-site restaurants.
Benchmarking: the key to building profitability
Accurate information is essential to help wineries develop their wine tourism and DTC activities. The Wine Australia Cellar Door and Direct-to-Consumer survey 2018 has developed a set of key statistics and benchmarks including:
- average sales value per bottle/case in each channel
- number of cellar door visitors
- average spend per visitor
- average spend per wine club member
- number of wine club members, growth and attrition rate
- best practice around tasting styles and tasting fees, and
- best practice around wine club offers.
Benchmarks for 2019: survey now open
The survey is being repeated in 2019, enabling results to be compared between years. We are hoping to achieve a sufficient response rate to enable comparisons to be made between wine regions as well as winery size categories.
If you are an Australian winery – with or without any direct-to-consumer sales – please click here to participate in the survey. The survey will be open until 16 August 2019.
 Wine Business Solutions Taking the Direct Route 2018
 Silicon Valley Bank 2018
 SOVOS and Wines Vines Analytics 2019
 Wine Australia Cellar Door and DTC survey 2018