How BC wineries can benefit, Part 3

(continued from Part 2: How can the rapid growth forecast by Vinexpo take place?)

How can BC wineries and wine lovers benefit? A look across the border clearly demonstrates the promise of the direct-to-consumer shipping market (while noting that the US wine market is not without difficulties of its own).

ShipCompliant’s 2012 report (available here) finds a “direct-to-consumer wine shipping marketplace that is now well established, though always evolving as new technologies and business models emerge.” The growth of the DTC market has increased more rapidly than the general American retail wine market, by 7.2% volume and 10.3% value from 2011 to 2012, and remarkably, it now represents over eight percent of the retail wine market in the US (US$1.3 billion of US$15.6 billion).  “Small wineries” (5,000 to 49,000 cases) accounted for 47% of volume and 51% of value of total wines shipped. BC’s domestic wine sales for the year to December 2012 were C$408 million (all trade channels).  One percent of that is just over $4 million, and eight percent is $32.6 million (BCLDB reports only break out the licensee sales channel). Here’s a thought experiment: if we replicate ShipCompliant’s findings that sales values are higher than volumes in the US DTC shipping market, and assume that VQA wines are the likeliest category for DTC shipping in Canada, then based on BC VQA table wine volume sales of 18.5 million cases in 2012 (BCLDB data), eight percent of that total would mean that roughly 1.5 million cases could be sold into the Canadian DTC market. Factoring out the roughly 15% of sales through the licensee channel, an opportunity exists for almost 1.3 million cases to be sold via “internal export” or DTC interprovincial shipping.

Given the over-supply of grapes in BC at the moment, no BC wine consumer would be shut out of the local market. There is also a reciprocal factor: the BC government deserves credit for opening the doors to DTC purchases from other provinces. BC consumers can also now take advantage of directly ordering wines from other producing provinces, subject to liquor board policies in the province of origin. In short, Canadian wine lovers would benefit.  BC wineries, grape growers and tourism operators stand to benefit. 

Does the BC industry have the collective will to seize the opportunity to meet Canadian wine drinkers’ desire for more wine at a reasonable price?  Time will tell, but complacency is not an option.