Changes to the wine distribution channels

VineyardThe US winery market continues to enjoy good times with a shipped product value of $12.5 billion in 2007. This figured translated into a retail value of $25.43 billion and when added to the value of 2007 imported wine of $4.57 billion, the US represents a $30 billion total wine market.

Small wineries are increasingly selling in the direct to consumer market as changing legislation has shifted the traditional channel for alcoholic beverage distribution. Wine Business reports the following 2007 breakout for channel sales of wine: sales to the trade 57%, sales to direct to consumer 38%, and export 5%.

To sell direct to consumers, wineries are turning to tasting rooms and wine clubs. However, revenues from tasting rooms are closely linked to winery size. Mid-size wineries which produce between 5,000 and 49,000 cases annually expected to report revenues of 35% (Western) and 60% (non-Western) from these rooms in 2008. Large wineries which produce 50,000+ cases annually project tasting room revenue of 20% (Western) and 40% (non-Western) in 2008.

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