It’s not a surprise that Napa Valley is considered the most famous winery destination in the United States. Around 500 wineries occupy Napa Valley’s 150 square miles. The region’s industry employs 46,000 workers, most of which work at wineries that produce fewer than 10,000 cases annually. Within the direct-to-consumer space, Napa Valley makes up 32% of the total volume shipped last year. So the question becomes this: how well did Napa Valley perform compared to other regions? This post explores the topic, using data from our 2016 Direct-to-Consumer Report.
Volume and Price Growth
In 2015, Napa Valley saw a solid 8.6% growth in volume, totaling to an impressive 1,373,825 cases. Just as a reminder from our previous posts, Washington’s shipped volume grew by 10.6%, while Oregon’s grew by 4.9%. In fact, Napa and Oregon were the only regions that had volume growth of less than 10%.
With that being said, Napa Valley saw one of the greatest value increases in 2015. The region’s average price per bottle jumped 14.7% to $61.41. This increase was essentially tied with Oregon’s 14.6% increase. The only region to see a higher price increase was the region named “Rest of the United States” (defined as wineries outside of California, Oregon and Washington) at 17.7%. Napa still boasts the most expensive wine in the country by a large margin: Oregon had the second-highest average price per bottle at $40.17.
The Dominance of Cabernet Sauvignon and The Growth of Red Blends
Cabernet Sauvignon dominated Napa Valley’s DtC Wine Market last year, capturing 31.7% of total volume shipped and 47.8% of total value. From a dollar perspective, more than $484 million of Cabernet Sauvignon was shipped, driven by a 15.7% increase in value. The average price per bottle increased 4.8% to $92.70 and was the most expensive varietal shipped from the region.
The success of Napa Valley’s Cabernet Sauvignon becomes more apparent when we look at the second-most popular varietal in the region: Red Blends. With 196,000 cases shipped, the varietal captured 14.3% of the region’s total volume. From a dollar perspective, Red Blends contributed $186 million, or 18.4%, of Napa Valley’s total value shipped. Of course, we can’t ignore that Red Blends are growing in popularity: the varietal saw 24.6% and 26.6% growth in volume and value, respectively. This growth makes sense when we consider the varietal saw a 20% growth in volume nationwide.
Standouts from Napa Valley’s Smaller Volume Varietals
So how did other Napa Valley varietals perform in 2015? Chardonnay was the only other varietal to make up more than 10% of the region’s total volume shipped at 10.2%. White Blends and Rose saw volume increases of 21.8% and 20.0%, respectively over the year before. Similar to the overall national trend, Syrah/Shiraz saw a 7.3% drop in volume over 2014 (for comparison, Syrah has seen a 7.6% decrease in volume nationwide since 2011).
From a value perspective, no other varietal came close to matching the value shipped of Cabernet Sauvignon and Red Blends. Chardonnay, Napa Valley’s third-largest varietal by value, contributed $67 million, or 6.7% of the total. Among the varietals that saw double-digit increases in value were Fume/Sauvignon/Blanc at 23.7%, Cabernet Franc at 23.9% and Other Reds at 28.4%. Rose saw the greatest increase in average price per bottle in the region, jumping 14.2% to $23.92 (indeed, Rose was the only varietal to see a double-digit increase). Despite its drop in volume, Syrah/Shiraz’s average price per bottle increased 8.1% to $47.61. On the flipside, Moscato had the region’s greatest decrease in price, dropping 22.1% to $12.58.
Napa Valley is home to some of the world’s most famous wine, and it’s no surprise the region influenced the growing DtC space. While Cabernet Sauvignon easily dominated last year, Red Blends also experienced the strongest growth in value and volume. Of course, there’s no denying the growth seen within smaller volume varietals like White Blends and Rose. Napa Valley had a strong year, and we’re all excited to see how the region continues to influence DtC shipments in the future! You can read the full 2016 Direct-to-Consumer Shipping Report here.
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