On Monday when I got into the office I was greeted with an alarming headline from WineBusiness.com, the wine trade's most-read publication: Are Direct to Consumer Wine Sales Falling off a Cliff? This headline was based on a report published by Community Benchmark, a company that aggregates winery tasting and sales data to provide insights to wineries, regional associations, and wine media. It had already gotten some high-profile attention over the weekend, with industry guru Paul Mabray presenting it as evidence on Twitter that wineries need to be thinking about other ways of customer acquisition beyond their tasting room:
Our over-dependence on oenotourism is a recipe for disaster especially with the macro trends of increased winery competition, extended experiences, and wallet share per winery.— Paul Mabray (@pmabray) April 22, 2023
Not to mention economic downturns, inflation, pandemics, and global transportation costs. pic.twitter.com/zulG5Om2iz
It's a scary thought, that tasting room visitation was down 22% in March and 21% YTD across the nine regions Community Benchmark covers. And our own tasting room traffic was down 22% in March, exactly on trend with the broader community. But I think there's good reason to expect that data to improve, and fast. After the coldest, wettest winter in the last three decades, as the calendar turned from March to April, spring arrived here in California. But March was definitely more wintery than spring-like:
There weren't many days that weren't rainy, and even those days weren't conducive to relaxing outside. March saw 20 days with measurable rainfall and an average high temperature of 56.9°F. There was only one weekend day with highs above 60°F and no rain. Combine that with headlines in every major California newspaper about extratropical cyclones, atmospheric rivers, levee breaches, and evacuation orders, and it's no surprise that people decided to hunker down at home rather than braving the highways in search of wine experiences. It's frankly a wonder our tasting room traffic held up as well as it did. This is in stark contrast to the spring of 2022, where we saw only six rainy days in January, February, and March combined. That wasn't ideal for the vines, but it was great for winery visitation.
This chart combines our high and low temperatures and the daily rainfall for each day since the beginning of March:
The contrast between March and April couldn't be more dramatic. The rain ended. Average high temperatures have been 69.2°F, about 13°F warmer than April. This nicer weather has been reflected in the percentage of people who've chosen to sit outside for their tastings here. In March it was just 45% of people who chose to be outside. Since April began, that number has risen to 87%. And our tasting room traffic has rebounded nicely, up 1% over 2022 since the beginning of April.
Sure, there are potential threats to the tasting room model on the horizon, both short-term ones like inflation and the slowing economy, and longer-term threats like changing demographics of wine consumers and the high cost of wine country visits. But I don't think that's the primary cause of what we've seen so far this year. For that, just look to the skies.
Happy spring, everyone.