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.
For additional information on this report please contact, Scott Mangelson This e-mail address is being protected from spambots. You need JavaScript enabled to view it , 707-226-9400 ex 4991.
About New Vine Logistics
New Vine Logistics provides the wine industry’s first comprehensive consumer-direct fulfillment solution. The company provides a complete set of shipping and logistics services, order management, and regulatory compliance services. Customers include top wineries, such as J Winery, Cline Cellars, Clos du Val, Fisher Vineyards, and Araujo Estate Wines; wine clubs such as VinUnici and Bottlenotes; and third party retailers ranging from iGourmet to Lufthansa.The New Vine Logistics team is comprised of experts from the wine, shipping regulations and compliance, technology and marketing industries. Company executives have worked with industry leading companies, such as the Morrell Wine Group, DHL Worldwide Express, IBM, WineShopper.com and Oracle. The company’s financial backers include top venture firms such as Kleiner Perkins Caufield & Buyers, Altos Ventures, Thomvest Ventures and others.For additional information please visit, www.newvinelogistics.com.
About MKF Research
MKF Research is a leading research source and business advisor to the wine industry. Widely respected as an independent, third-party research source for wine business and wine market trends, MKF Research publishes a variety of industry economic studies and publications and provides confidential consulting on a range of wine business and strategy issues to wine industry enterprises, investors and suppliers. The company is a division of Frank, Rimerman + Co, LLP, the largest California based accounting and consulting firm.
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