Strategies to Protect and Grow your DtC Wine Sales
March 15th, 2015Sam Straka – Product Strategist
ABOUT SHIPCOMPLIANT
• Founded in 2000
• Based in Boulder, CO
• Core values driven company
• Powered by Sovos Compliance
• Looking back, looking forward.
• What’s happening with DtC regulations?
• How do I stay on top of these changes?
Agenda
Texas loves wine• Cab consumption up 19% by volume• Red Blend and Pinot Noir up 13%
Number 2 Wine destination after CA• Almost $200 Million shipped DtC in 2015
Looking Back, Looking Forward
1) Strong dollar / low domestic production = Imports
2) Premiumization is changing the market
*This graph courtesy of Silicon Valley Bank State of the Industry report 2016.
Looking Back, Looking Forward
SEASONALITY SMOOTHING?
2014 2015
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
January February March April May June July August September October November December
BOOMERS BOOM
% of Total Volume % of Total Value
Millennial Gen X Boomer Silent
11.6%
7.4%
32.3%33.2%
48.0%
52.1%
8.1% 7.3%
BUT CHANGE IS IN THE AIR – 5 YR CHANGE IN VOLUME
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
2010 2011 2012 2013 2014 2015
BoomerGen X SilentMillennial
60%
50%
40%
30%
20%
10%
Sales approaching $2B
Heightened Enforcement
What’s happening with DTC Regulations?
What’s happening with DTC regulations?
Michigan
Illinois
South Dakota
Massachusetts
Colorado
What’s happening with DTC regulations?
Michigan - MLCC increasing enforcement with stings
• “a label containing DTC license #;order #; name and address of theindividual placing the order and thename of the designated recipient (ifdifferent), must be placed on the toppanel of the shipping container”
• Age Verification, Date of Birth, Phone Number
• Label Registrations listed on the invoice
What’s happening with DTC regulations?
Illinois
• Some winery cases being dismissed
• Wine Institute sued DOR in July
• Awaiting clarifying rules from the DOR and action on the litigation
What’s happening with DTC regulations?
South Dakota
• New Law effective 1/1/16• $100 annual fee• 12 case limit / customer• Age Verification• Label Registration• Sales and Excise payable quarterly
What’s happening with DTC regulations?
Massachusetts
• Opened for Direct Shipping 1/1/15• $27.5 Million in DTC sales in 2015• That will double this year
• Excise Tax issues = Credits may be available
$10
$20
$30
$40
$50
$60
$70
$80
$90
2015 2016 2017
MASSACHUSETTS UPDATE
(Mill
ion
s)
Wow, that’s
close!
Prediction:
$30M
Actual:
$27.5M
What’s happening with DTC regulations?
Colorado
• New Tax requirements for larger shippers.
• Bottom line, sales tax is getting harder.
• ShipCompliant.com/blog
• Wine Institute / Wine America
• Beverage Alcohol Community - Google it!
• 2016 Direct Shippping Report - shipcompliant.com/dtcreport
• DIRECT 2016 – Register at shipcompliant.com/2016direct
How do I stay on top of these changes?