US wineries continuing online push as pandemic eases

Forced to close their tasting rooms during the pandemic, over 75% of American wineries pivoted to hosting online tastings, according to a recent Silicon Valley Bank survey.

The direct-to-consumers marketing survey, conducted by the Silicon Valley Bank, took in 460 wineries. 28% of wineries surveyed held online tastings more than once a week.

“In the final analysis, the 2020 Covid-19 pandemic will go down in the US wine history as the single event that galvanised the business into action,” said Rob McMillan, EVP and founder of the bank’s wine division.

“In taking the tasting-room experience on the road, discovering we can sell digitally, finding the rudiments of omni-channel marketing and discovering that our path to the consumer can, and needs to, positively evolve for success tomorrow,” he added.

The wineries in the survey all reported they were not abandoning online marketing as the pandemic eases, throwing more resources and hiring more highly trained personnel, even as they were reopening tasting rooms.

Fifty-two percent said they were increasing digital marketing budgets, with 22% planning to hire dedicated employees for those tasks.

The average winery email list was reported to total over 15,000 names each, and the contact frequency ranged from 46% sending weekly or biweekly messages to 30% monthly and 17% quarterly.

The messages were opened on average 37% of the time, and the click rate was 14%. Somewhat surprisingly, 82% of survey respondents indicated they weren’t sure of what their investment rate of return was for their digital marketing spend.

Those customers who did return to physical tastings rooms during the first months of the current year – usually opened with numbers restrictions – were ready to spend more for their efforts than they did in 2019 before the pandemic.

The biggest gains – up to almost 50% – were being made by smaller wineries in terms of average annual case production.

For example, wineries with fewer than 2,500 cases found their average tasting room sales in 2019 of US$141 increased to US$193 in 2021.

Wineries in the 2,501 to 5,000 cases range went on average from US$182 to US$221, while those in the 5,001 to 10,000 category increased from US$135 to US$197. By comparison, high volume wineries with over 250,000 cases gained a 2019 average of US$83 to US$98 during the pandemic.

Not surprisingly, it costs more to attend a wine tasting in Napa Valley by orders of magnitude than it does elsewhere in the country, even in Sonoma County.

Standard tasting fees averaged US$58 in Napa, US$30 in Sonoma and US$15 outside of the West Coast. Reserve tasting fees averaged US$90 for Napa, US$50 for Sonoma and US$26 for the rest of the country.