The Case for Selling Your Older Vintages/Excess via DTC ... NOW!

As the Covid shutdown drags on and continues to severely limit tasting room access, there is a tendency by small and mid-sized wineries, even those who have a reasonably robust wine club, to fall-back on wholesale distribution channels to move large amounts of inventory quickly.

Since many wineries were long on inventory pre-Covid, it is understandable that they feel compelled to seek quick solutions via flash sale sites and online retailers/discounters with drastic price reductions. These channels can be effective in moving a lot of wine. Yet, there are only so many places a winery can go to unload large quantities at a significantly reduced price without damaging their brand. Competition for these channels is steep, often requiring a 90+ rating from a select few reviewers. Relationships matter too, and what may initially seem like a fast solution can turn into a long drawn out process.

To move through older vintages and excess, wineries should develop a coordinated plan where wholesale and DTC efforts occur at the same time. Think about it: to focus first on distribution where margins are low, and then follow up much later with DTC efforts, is a bit backward. Why not give your very best customers first shot at the deals you have to offer? Covid is the perfect excuse to offer exceptional value with temporarily reduced pricing to your club and loyal customers without damaging your image. Consider offering quantity deals via email and phone as in 6 or 12 bottles. Also, keep in mind that inexpensive and free shipping is the new normal. Talk to your shipping representative and ask if there is an opportunity for reduced rates.

Think outside of the box and focus on case sales rather than bottle sales. I know of one winery that offered their club a 20% savings on a case of one of their “best” reds, which they happened to be long on. If the member bought the case, they were also able to buy a case of back vintage rosé for $50/case. The margin on the red far outweighed the perceived loss on the rosé.

If you can save your customers a trip to the store it’s a win-win for them and you. The best part? You won’t have to wait months to get paid! Your best customers want to support their favorite wineries and the people who keep them running. They appreciate great value plus variety and scores aren’t nearly as important to them. People are working from home and they are answering their phones. Don’t hesitate to have a sales associate call a customer to tell them that you’ve got a great deal on their favorite wine.

Try to think about price reduction offers to your club and consumers as more than just a stop-gap to create cash flow. The more times you reach out by email, phone or virtually, and the sooner you learn to collect and measure the data that matters, the easier it becomes.

Don’t wait to pursue DTC as a means of moving excess and older inventory. You can pursue DTC, wholesale, and online simultaneously. In the long run, your winery stands a much better chance of coming out of Covid healthy.