Bill Hocker | Feb 15, 2016

NVR 2/1/16: Napa wineries ship $1 billion in wine to consumers in 2015

The Napa Valley Vintners have just touted this report to bolster their contention that increased tourism is necessary for the survival of the Napa wine industry. At $1 billion that probably represents 10% to 20% of the total of Napa appellation wines produced (depending on which numbers you use in this 2012 study).

But there are two facets to the Direct-to-consumer market which are often conflated in reporting on the trend and not analyzed in this report which just covers shipped goods: wine bought and ordered at wineries (including wine club commitments) and wine ordered directly from the winery from non-visitors. The important thing to know is how much of a winery's sales are a direct result of a winery visit vs hearing about the wine from a friend, a web or magazine article or review, an ad, a restaurant meal, or a remote tasting and then going to the winery's website to buy the wine or join the club. Even more important is knowing the value of these at-winery sales compared to the totality of Napa appellation wine sales.

For those of us who live in the Napa Valley the ratios are important - the winery visit may or may not be having a significant impact on the winery's bottom line (the cost of building a winery and running a tasting room aren't reflected in revenue figures) or on Napa wine industry revenues in general, but, as an excuse to bring in more tourists, it is surely having a urbanizing impact on the rural county that the General Plan claims to protect and that residents really do treasure.

DTC shipments will increasingly be the future of all businesses including wine. But just as I don't feel the need to travel to Cupertino (or Shenzhen) to form an emotional bond to my iPad, as the process of selling wine over the internet becomes more common, relying on tourists to deplete inventory will become less an issue. One can find out about the quality of a product in many ways and those ways need to be given more emphasis and investment in the wine industry than in the creation of the financially iffy and environmentally destructive construction of hundreds of tourist-centric wineries. The goal is to insure that the natural beauty and rural character of the place where it is made is not destroyed before the click-and-ship future of the industry arrives. As Supervisor Pedroza has said several times now, "once our open space is gone, it's gone."

Wine tourism lobbyists have previously presented to the county the idea that visitation is necessary for the survival of the wine industry, and not just to feed the growth of the tourism industry. They will be presenting again this Wednesday (2/1716) at the Napa Planning Commission, probably with this report in hand.

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