Past PressPress
PRESS RELEASE:
New Vine Logistics Announces First Release
of its Quarterly Consumer Direct Shipping Index
Study Finds Direct to Consumer Market Growth
Rate Triples Rest of Industry
May 10, 2007
NAPA, Calif. -- New Vine Logistics, a leader in consumer direct fulfillment and supply chain services for the wine industry, introduced the findings of its Quarterly Consumer Direct Market Index at the MKF Research 1007 Wine Executive Summit in Yountville, California on May 3rd. The index, drawn from New Vine’s comprehensive data management systems, tracks actual consumer direct shipments of hundreds of winery and wine marketing clients.?p>
The Index is the first of the components of the MKF Research Direct Sales Project to be published this year. MKF Research is a leading research source and business advisor to the wine industry.
The Index shows that sales through the direct to consumer segment of the market are growing at a rate three times faster that the industry as a whole. A significant portion of this growth is driven by the popularity of wine clubs and loyalty programs.
"Working closely with MKF Research, we were able to quantify trends that we have been seeing in the consumer direct market and really understand the size and rapid growth," said Kathleen Hoertkorn, CEO, New Vine Logistics. "Our goal is to continually improve and scale our direct fulfillment and supply chain services to support fast-growing customer needs at the highest level of satisfaction."
Key findings from the first quarterly release of the Consumer Direct Market Index include:
- The growth rate for consumer direct sales continues to accelerate - up 31% from Q1
- 2006 to Q1 2007, compared to a 27.6% increase from 2005 to 2006.
- Based on price per bottle, the volume growth from Q1 2006 to Q1 2007 has increased:
- 68.1% for product over $30
- 8.2% for product under $10
- While California is still the largest market for consumer direct shipments, new markets are emerging across the country as
legislation is amended. 2006 growth rates for consumer direct shipments for the states receiving the most shipments were:
- IL = 22.5%
- TX = 22.7%
- CA = 35.5%
- WA = 31.6%
- MN = 32.8%
- Two states, NY and FL, that did not allow direct shipments in 2005 now account for over 10% of all shipments in Q1 2007. They now represent 4.6% and 6.0%, respectively.
- Wine club shipments are up 40.2% in Q1 2007 compared to the overall channel growth rate of 31%, indicating some of the other channels such as e-commerce and tasting room orders are growing at rates slower than the overall average.
"The New Vine Logistics Consumer Direct Index provides a real measure of the growth and the patterns of growth of key channels of winery direct – many of these insights were not available before and are a great service to the industry," said Barbara Insel, Managing Director, MKF Research LLC. "Our findings confirm strong growth in the industry and an opportunity for more wineries to increase revenues through the consumer-direct channel."
The NVL Index aggregates shipment data from hundreds of wineries and wine marketing companies to track the following direct sales data points, based on comparable suppliers:
- Each destination state's share of volume, by number of orders
- The rate of growth of orders and bottle numbers to each destination state
- The number of orders and bottles shipped
- By price segment
- By Varietal
- Wine club shipments vs. non-club shipments (includes tasting room, phone orders, and e-commerce)
Given the seasonality of wine sales, each quarterly index will be compared with the same quarter for the previous year based on a comparable set of suppliers.