CONCORD — Wineries continue to receive good news, for the most part, when it comes to shipping their wares straight to hopeful drinkers.
For one, the channel for direct to consumer shipping has grown yet again over the past year, this time by more than 15 percent in both the volume and value of directly shipped wine.
Add to that the opening of a new state for wineries to ship into by year’s end and progress on states with restrictive shipping regulations, and the industry consensus is clear.
“2017 was a very good year,” said Larry Cormier, general manager at Sovos ShipCompliant, creators of a yearly report tracking the ebbs and flows of the direct to consumer shipping channel.
Offering a preview of this year’s report, Cormier bore the good news at the Direct to Consumer Wine Symposium, an annual summit held this week for those working in the channel and the main fundraiser for the consumer outreach nonprofit Free the Grapes!
Noting the rise in both volume of cases shipped and the overall value of shipments, Cormier cited more good news for the industry, in that growth had not come at the expense of price per bottle. “In fact, per bottle prices keep climbing.”
According to the preview data, the channel owes its overall gains in part to swelling volume and value in shipments from Oregon and Washington. The former’s volume and value each grew by more than 30 percent in the last year. In addition to the two states, Cormier also noted that Sonoma “has been on a roll.”
Of the total $361 million increase in value across the channel, Sonoma accounted for 40 percent, he said.
Other insights from the report showed that medium-sized wineries producing between 50,000 and 500,000 gallons had grown in shipments by 37 percent, while per varietals, wineries shipped more Pinot Noir than in previous years and shipments of Rosé exploded by more than 200 percent, complementing a rise in price per bottle.
2017 marked the first full year that wineries were able to ship to consumers in Pennsylvania, which quickly rose to the 10th largest state in terms of wine being shipped into it.
“We fully expect that Pennsylvania will move up in the fifth or sixth position next year,” Cormier said.
The campaign of outreach and lobbying by the Wine Institute and Free the Grapes! that brought about Pennsylvania’s opening in 2016 was also applied in Oklahoma, one of the few remaining states that has continued to ban wineries from shipping into it. The state is slated to begin allowing direct shipments from wineries starting in October of this year.
Offering his yearly “State of the States” update on shipping legislation, Steve Gross, vice president of state relations at the Wine institute, outlined the industry campaign’s goals for the coming year.
On the horizon for 2018, he said, the campaign will press on with its efforts in the remaining five states, after Oklahoma, that currently remain closed. In four of those states, Alabama, Delaware, Kentucky and Mississippi, the groups were making progress, Gross said, while the fifth state, Utah, will finally enter the campaign’s sights.
“You never heard me up here before say I’m going to introduce a bill in Utah,” Gross said, “but I think we’re going to introduce a bill in Utah.” The effort is likely to take several years, but he asserted, “it’s time to get that one rolling.”
The groups also plan to work this year against “onerous regulations” in states that allow shipping, such as New Jersey and Ohio, each of which prohibit shipments from wineries producing more than a certain number of gallons per year, effectively excluding larger wineries and wine companies from shipping to consumers in their states.
Another target will be regulations in Arkansas, which allow wineries to ship only to residents who place their shipment orders at a winery’s tasting room, thus requiring a return visit for every order.
The state offered winery owners a limited number of permits for off premises sales through a lottery, Gross said, though with a catch. To be considered for the lottery, winery owners would have to be present at the Arkansas capital during the drawing.
“If you can imagine, most of the California winery owners did not fly to Little Rock,” he said.
“So we’re going to continue to push on that to try to get that replaced, which just shows you kind of the parochial type of arguments we end up with at the local level sometimes.”
Gross also stressed the need for wineries to be sure they are complying with the varying laws within the states they ship to, noting that enforcement on the state level was a significant aspect of 2017, particularly in states like Michigan, Arizona, Illinois and New York. “There were a lot of cease and desist letters that went out,” he said.
In Illinois, for instance, a week before the symposium, the state sent 837 cease and desist letters to companies that it believed were shipping wine into the state without the necessary permits. Gross said he was aware that 290 of those companies are wineries, pointing out that violation of the Illinois state law is a felony. In the event of conviction, a winemaker would thus lose their licenses and permits to make wine.
“There’s more (letters) going out in 2018,” he added, “so being in compliance is going to be a big part of doing direct shipping going forward.”
Overall, he concluded, “I don’t think there’s ever been a bigger focus on enforcement. There are a lot of people looking at compliance, so please pay attention. Follow the rules. Because I think the odds of getting in trouble now are much higher than they’ve ever been before.”