Despite signs of slowing growth, Australia’s direct to consumer channel “remains more resilient than wholesale" against the current category-wide economic pressures, finds Wine Australia’s Direct to Consumer Report 2024.
Throughout the 2024 financial year, both net sales and cases sold showed positive growth rates of 4% and 2%, largely driven by cellar door and subscription wine club sales.
“The subscription wine club model remains valuable,” wrote Wine Australia.
“The numbers demonstrate these customers are more loyal. They spend more and purchase more frequently, generating a higher lifetime value on average than any other customer type.”
Cellar door sales represented 46% of the total value of the 1.3 million transactions included in the study, whilst subscription wine club sales represented 34% of sales. Whereas cellar door sales remained steady when compared to the year prior, subscription wine club sales increased by one percentage point.
“Watch for changes in preference by generation, coupled with increasing attrition rates as the subscription model matures further,” the Report recommends.
“Other loyalty programs (e.g. by spend) will become useful to transition customers who are cancelling from the traditional subscription model.”
Wine Australia expects the next 3-5 years to bring about notable changes and challenges to DTC wine sales in Australia after recent contractions in the US market.
“This trend has not yet been completely mirrored in Australia - yet… likely due to the growth cycle of the channel overall. Australia is behind the USA in this regard. However, there are signs in the Australian of a maturing DTC market and a softening economy, with overall growth rates slowing.”
Another key concern for the channel is its ageing demographic, with Boomers and Gen X currently contributing to 77% of sales volume.
In its Report, Wine Australia provides a number of recommendations to wineries looking to enhance their DTC performance.
First, wineries should focus on driving foot traffic and visitation by self-promoting as being an “experience and regional immersion.” This, according to the Report, “remains the single strongest avenue for customer acquisition.”
Next, wineries should work on honing sales techniques in the cellar door “to maximise traffic conversion to sale and importantly club and list.”
Third, Wine Australia’s Report found that wineries investing in technology, analytics, and resourcing to improve their DTC program in order to better understand their customers “are extracting additional growth and extending the lifetime value of their customers.
“This is key to future growth,” concludes the Report.
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Wine Australia's Direct to Consumer Report 2024 was produced in collaboration with Wine Direct, Enolytics and Georgia Rasmussen Consulting and is based on data from over 1.3 million customer transactions from approximately 90 wineries Australia Wide.
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