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Does Size Matter? Absolutely, if You’re a Winery

On April 16th, ShipCompliant, together with Wines & Vines, released our 2013 Direct-to-Consumer Shipping Report, which contains a treasure trove of useful information that could change the strategy of your business. Upon its release, we shared with you that the direct shipping business is growing. If we dig a layer deeper, however, we can see who is growing and who isn’t. And one of the key factors is the size of the winery.

Wines & Vines segregates the population of wineries in America by total production volume. You can see a breakdown here:

When we classify wineries in these tiers, we see can see stark differences in sales channel mix as size increases.

For instance, smaller facilities are much more dependent on the direct shipping sales channel. In limited production vineyards, over 10% of business is sourced through direct-to-consumer sales. Many of these wineries depend on tasting rooms, events, websites, and word of mouth to sell their vintages every year.

Medium and large wineries, who typically enjoy a broader reach due to vast distribution networks, depend much less on direct-to-consumer sales. Seems logical, right?

If we take a look at growth by winery size, we can come to some more groundbreaking conclusions.

The first thing you may notice when we separate volume by tiers is the dominance of “small” wineries in direct shipping. In fact, 51% of all cases shipped through this channel come from wineries producing between 5,000 and 50,000 cases annually. It is astonishing that these wineries represent only 5% of total production, yet take such a commanding lead in this channel.

What is even more interesting, perhaps, is rate in which larger wineries are growing their direct sales channels. It seems as though the previous success of direct-to-consumer shipping has awoken the sleeping giants, who are posting gains that outpace their smaller brethren.  These results are similar to those found in our 2012 Direct Shipping Report, so we don’t see this trend going away anytime soon.

You can take a look at our analysis of this and other figures in the 2013 Direct Shipping Report. Click here to download it today!

We’ll be rolling out more conclusions over the next few days, so stay tuned to the blog for more fun facts!

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