With wholesale wine inventories at historic highs, more pressure is on direct-to-consumer wine sales, said industry expert Lesley Berglund of Napa Valley.

Wineries, however, must diversify and decrease dependence on tasting rooms as the sole method to get new customers, especially since traffic hasn’t returned to pre-pandemic levels, Berglund said.

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“We can’t put all our eggs in that one basket,” added Berglund, during a state of the industry session at the Oregon Wine Symposium on Feb. 13.

Businesses are building other channels, however, including road show events, the fastest growing direct-to-consumer segment for West Coast wineries.

Wineries are having success visiting markets and holding tastings at homes.

Wine clubs

Wine clubs are another important direct sales outlet. While memberships are down, member spending is up on average, said Berglund, chairwoman of WISE, which provides education, training and certification for winery consumer direct professionals.

Secret shopper visits by WISE indicate winery tasting rooms only mention wine clubs in 46% of interactions, though.

“We’re missing 100% of the shots we don’t take,” Berglund said.

Wine club conversion rates average about 5% in Oregon but top performers are closer to 15%, she said.

Oregon and Washington each had about $1.2 million in direct-to-consumer sales the past year. While that represented a 3% drop for Oregon, Washington saw 1% growth.

On the plus side, Oregon tasting rooms’ sales conversion rate was 70%, the top mark in the nation.

Berglund stressed capturing data from consumers so artificial intelligence can be harnessed in marketing efforts.

Higher plateaus

Industry consultant Danny Brager of Mission Viejo, Calif., said that though the last few years have been tougher, there are still bright spots and hope.

The number of Oregon wineries decreased slightly from 2022 to 2023, going from 908 to 897, and sales dipped a bit, as well.

But those new plateaus stand well above historic levels, Brager said.

Falling demand for wine is a global issue, though beer and mainstream spirits also are seeing declining consumption.

Inflation, a healthy living movement, high inventories and competitive threats from other beverages and legal cannabis have been contributing factors.

Restaurant, bar sales

Wine, though, has been hit by the closure of fine dining establishments caused by the pandemic and the rise of casual restaurants. Far fewer locations have deep wine lists, and spirits appear to be winning the on-premise adult beverage battle via cocktails, Brager said.

Roughly 80% of Oregon wine goes out of state, Brager said, but Oregon needs to get better market penetration in top wine consuming states.

About 85% of wholesale volume for Oregon occurs in the $11-$25 range, he added, which is the national sweet spot.

Pinot noir was the top varietal for the state on the wholesale side in 2023, with 55% share, down slightly from 2022.

That was followed by Pinot gris with 23% and Rose with 10% – up 107.4% over the previous year.

Brager and Berglund said the wine industry must capture younger and diverse consumers while retaining older patrons.

“Boomers are still very thirsty,” Berglund quipped.