Why direct-to-consumer sales are so important to wineries if many of the smaller, family-owned wineries are to survive: They need to sell a large percentage of their wine directly to the consumer either at the winery or through wine clubs. There is no other way.
Over the last 25-30 years there has been a great consolidation of wine distributors coinciding with a tremendous expansion in the number of wineries. In fact there are only two remaining giant, national distributors and a small number of regional ones. Lack of distributor competition gives them leverage over wineries and allows them, more or less, to do the absolute minimum in marketing wines.
Those few distributors that remain will often take on a new winery but, with few exceptions, will do little or nothing to build the brand and sell the wine. The winery needs to send its winemaker and owner on the road for extended periods promoting the winery and wines when they should be at the winery. And let’s not forget all the free samples demanded by distributors. But when these winery principals return to their wineries their distributors usually quit working for them.
Distributors’ sales teams generally want to take the easy road. They are often order takers. It is easier than the hard work of actually selling the wine and building the brand. They tend to “sell” wines for the wineries that are famous (and easy to sell).
Large wineries, by contrast, have the financial wherewithal and market clout to sell their wines regionally, nationally or internationally. They often have huge marketing, promotion and advertising budgets. Or they build a distribution system themselves. The little guy can’t do any of that. So he has only one option – sell directly to the consumer.
A winery and vineyard setting is the perfect venue to promote ones wines. Telling the winery and family story, welcoming visitors , offering samples of one's products, organizing customer events among the vines and barrels are all proven methods to build a brand and promote and sell wine. Without direct contact with the consumer it is almost impossible to build a wine club. Restricting the only option a small winery may have to survive in the market place can be a death knell for these wineries.
Some people tend to believe that most wineries make the big bucks and spend their afternoons by the pool living the “Napa Valley lifestyle.” The truth is many wineries, large and small, despite all the hard work and long hours, huge investment and risk-taking, barely make a living, go out of business or sell out to large wineries where they become just a brand and profit center with no personal attachment.