D2C Wine Sales Fall as Consumers Seek Convenient on-the-Go Drinks

Alcoholic beverage drinkers increasingly expect quick, easy options but are not necessarily seeking order-in-advance convenience.

Global spirits and beer giant Diageo, which has a presence in more than 180 countries, shared on a call with analysts Thursday (Jan. 26) discussing its financial results for the first two quarters of fiscal year 2023, that there is an increased demand for convenient beverage options on the go.

CEO Ivan Menezes noted that, while the canned cocktail space has been rapidly expanding, the company is avoiding the temptation to go all-in in the near term at the expense of long-term growth.

“The acceleration in [ready-to-drink (RTD)] spirits has been [an] important piece of the spirits market growth,” Menezes said on the call. “Our strategy there is we’re not chasing RTD growth. We want to be in the premium end of premium convenience. We’re very focused on building a sustainable quality premium business in this space.”

The rapid growth of the canned cocktail/RTD spirits category suggests that consumers are looking for convenient options that they can take with them out and about — say, to a social gathering. This demand for mobility may offer some insight as to why, despite the increasing demand for convenience among alcoholic beverage consumers, eCommerce is not growing faster.

A report released Tuesday (Jan. 24) from Sovos ShipCompliant, which offers automated compliance tools for alcoholic beverage brands and retailers, in partnership with wine industry data provider Wines Vines Analytics, noted that direct-to-consumer (D2C) wine sales are on the decline.

The study, which drew from data from more than 11,000 U.S. wineries, found that D2C sales volume was down 10% year over year in 2022 and average order value decreased 2%. The figure marked the first decline in the 13 years of measurements. Wines Vines Analytics attributed the decline to the return of on-premise drinking.

This trend, in combination with the rise of RTD, suggests that consumers are less interested in the kind of convenience that comes from placing orders in advance and more interested in low-effort on-the-go flexibility, buying drinks in the moment at bars and restaurants or picking them up from a nearby store.

However, inflation may also play a significant role in the decline, as it seems that consumers who are not worried about their spending are ordering more than ever. D2C shipments of wines priced at $100 a bottle and up rose 8% in 2022, and shipments of those that are $200 and up increased by more than 20%, suggesting that big spenders are making wine purchases online more than ever.

Indeed, despite the overall decline in D2C wine sales, industry insiders continue to bet on the future growth of eCommerce alcoholic beverage sales. Also Tuesday, Speakeasy Co., a startup offering solutions for wine and spirits brands to sell D2C, announced that it has raised $6.8 million in its third seed funding round, bringing its total to $9.8 million.

“We are bullish on the long-term growth potential of alcohol eCommerce,” Brian Rosen, general partner at round leader InvestBev Group, said in the release. “Across all industries, companies highly value owning the direct consumer relationship, and Speakeasy allows alcohol brands to do just that, while layering on efficient fulfillment.”