Tag Archives: Wine Distribution

November 10, 2023 · 11:04 AM

Will Wineries/Distributors Listen to Consumer Feedback on Restaurant Wine Service?

Auditorium of Wine2Wine Business Forum

Wine2Wine Symposium Tackling the Difficult Issues

The purpose of this survey was to discover the importance of wine selection and wine lists to the dining experience in North America. The survey results match my understanding of the average consumer at an average white tablecloth dining restaurant here in the U.S. (high-end fine dining is a different category). Why did this feedback take so long? Anyone connected to your local restaurant scene could have shared this information. At least in Italy, the wine industry is attempting to understand what the U.S. wine consumer is asking for. When will the industry in the U.S. follow suit? See if this matches your wishes/wants:

  1. The food menu is the most important factor for a significant majority of respondents (81.13%) when choosing a restaurant.
  2. The wine list is important to a minority of respondents (9.43%) when choosing a restaurant.
  3. Most consumers (95.83%) want to see less than 100 labels on the wine list.
  4. 57% of consumers favor an average price of below $60.
  5. 50% of restaurant workers think chefs create menus without thinking about wine.
  6. Consumers prefer winemakers’ dinners (15.51%) and seated wine and food paring events (18.18%) rather than wine classes (9.63%) and cooking lessons (7.49%)
  7. At wine and food pairing events 40% of respondents thought the pairings weren’t great.

(recent survey on behalf of Quench Magazine discussed at Wine2Wine symposium)

Wine and the Typical U.S. Dining Experience

These answers represent something closer to the typical dining experience in Europe and reflect the disconnect between the U.S. wine industry and the average U.S. consumer. In Europe, the average table wine at under $30 USD/btl is pretty darn good. In the U.S., under $30 USD/btl (roughly $15 USD/btl retail) is typically undrinkable. In my opinion, the lack of focus on quality at this price-point is killing overall demand for wine in the U.S. and causing the current increasing imbalance between production and consumption. The only demand growth in the U.S. marketplace is in the over $60 USD/btl retail off-premises wine category. There is a story in this data that is being completely overlooked, to the detriment of the industry.

Customer Feedback

I wonder how insulted your favorite dining restaurant would be if you shared this press release? This topic is one of my personal great frustrations with dining out and pushes me to BYO restaurants and payment of corkage fees, rather than purchasing from on-premises inventory. The selection of restaurants in AZ that offer this option is controlled by local beverage laws and is very limited. It is quite disappointing.

Future of On-Premise Wine Sales in the U.S.

Now that we are seeing more consumer feedback, perhaps the industry will respond. I wonder if distributors will evaluate the value proposition and push production there. Distribution is much more influential in driving restaurant demand than producers, due to three-tier wine, beer & spirits laws. For those of us that enjoy a bottle of wine with dinner while dining out, one can hope.

Link to Wine Industry Network coverage of the press releases at this link: Wine2Wine Symposium Link

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December 15, 2018 · 9:57 AM

Sign, Sign, Everywhere a Sign!

122110calvin_resolutions

Calvin & Hobbes – Bill Waterson, Copyright – Andrews McMeel Publishing

I am not the only one seeing the changing face of the U.S. wine industry and the industry resistance to any kind of meaningful response.

Sources

Wine-Searcher just posted an article regarding a recent wine symposium where the topic of conversation has been adjusting to the changing market. See my previous article at this link: Trends Changing the Wine Industry and the Wine-Searcher article at this link: Gloomy Outlook for Small Wineries.

Can Small Wineries Survive the Changes?

Here are the data points changing the face of the wine industry with limited response by producers (the numbers across multiple sources had some variation, so the figures below are approximate):

  • 90% of all wine made in the U.S. is sold by the 320 wineries that exceed 50,000 cases of production. Of that 90%, more than half is dominated by the top FIVE: Gallo, Wine Group, Constellation, Trinchero and Delicato. The other 9,000+ wineries are bringing only 10% of all wine production to market in the U.S.**
  • With the recent on-going consolidation in wine distribution, the top FOUR by volume nationally (Southern, Republic, Breakthru & Young’s) deliver approximately 60% of all wine distributed in the U.S., but represent only 30% of the wineries.**
  • In the case of wineries producing fewer than 10,000 cases, distributors were responsible for only 33% of sales in 2016. A 6% decrease over the previous year and the trend is continuing.**

Is your head swimming with numbers yet? Suffice to say, BIG has become financially BETTER today and could very well push SMALL to the side of the road. Why? The answer is in the numbers above. How do those other 70% of under-represented wineries bring their wine to market? Winery Direct-to-Consumer (DtC) sales is only 2% of all wine sold in the U.S. currently.

Solutions

Small wineries better become experts at marketing, capturing clientele and earning their continuing loyalty… and fast! If they do not already have a developed DtC customer base, it is near too late. Those who wish to survive, should be investing now! The large distributors dominating the market already have large portfolios of wine labels and shelf-space and wine lists only have so much room.

There were two great hopes: the loosening of rules in cross-state shipping of wine allowing the emergence of online wine retailers and the advent of wine big-box retailers (think Total Wine). At one time, it was looking like these two channels buying winery-direct could represent small wineries and fill the gap. Although just like the DtC space, they are missing the expertise to deliver the volume of sales needed. Can online retailers get better at building inviting online platforms and tools to identify and explore the consumer palate? Can big-box retailers provide a better buying experience that allows thousands of labels to be properly represented? Unfortunately recently, wine commerce laws have become stricter (see recent changes in FL) and it is making it more challenging for both of these channels to grow fast enough to fill the gap.

Why Should Consumers Care?

Well, if you have favorite wines produced by wineries with under a 10K case output… supporting them with your DtC purchases will become important to their continued survival and your continuing supply. It is that simple. The survival of small wineries is in your hands…

 

**Reference sources for this article were: Various Wines & Vines articles, Grand View Research – Wine Market Trends Report, Forbes Food & Agriculture articles, L.E.K. Insights  – Trends Affecting the Wine Industry, Dr. Liz Thach MW – Blog and Statista – Alcoholic Beverage Statistics. The internet provides so much rich content, if you search!

 

 

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