Evolution of Wine Clubs in the United States

Evolution of Wine Clubs in the United States

Wine holds a special place in the heart of virtually every wine enthusiast and any global region where it is genuinely appreciated. What makes wine stand out from other drinks and alcoholic beverages is its ability to bring people together — which explains why wine is a common sight at events worldwide. Another feature of wines is that it brings love and delightful experiences, leading more people to relish their wines in the company of friends and loved ones.

While sipping your glass of wine alone can be refreshing and relaxing, wines are best savored in the companionship of people who share the same knack and tastes — i.e., wine clubs. Wine clubs are an essential part of wineries; they play a great role in boosting revenue generation at the cellars. In recent times, wineries in the United States started showing more interest in Direct to Consumer (DTC) sales. Consequently, they are paying more attention to establishing (or sustaining) their wine clubs.

Wine Clubs Equal More Profits

Currently, the growing direct to consumer wine sales in wineries are primarily driven mainly by the corresponding wine clubs — a flourishing wine club can account for an average of 10% of the winery’s revenue annually. Wine producers worldwide know the significance of this business model, and they see enormous potential in wine clubs and how they can leverage them to connect with fans and customers without intermediaries. The absence of intermediaries between wineries and consumers often imply the generation of more money for the winery because they can vividly decide how much gain (or profit) they want to make on each bottle.

Earlier in 2020, wine consumers spent an estimated $4 billion via direct to consumer shipments, while the number of cases shipped in the same period was approximately 8.5 million. These figures are not only astronomical and intriguing, but they are also historic because this is the first time wine club sales surpassed sales from tasting rooms. While club sales in most wineries and vineyards were put at 36%, tasting rooms dropped noticeably to 28%. Some people might argue that the Covid-19 lockdown was responsible for the trend. But the wine industry in the United States is witnessing a continuously growing trend.[1]

Fast-forward to 2021, Silicon Valley wineries and their counterparts across the US reported an average of 21% wine club growth rate. In addition, they also reported 8.7% customer conversion from visitors to club members in wineries compared to 5.7% conversion from other channels, including urban regions in the US. All of these point to the fact that wine clubs are gradually replacing traditional means of wine-buying. In the United States, winemakers are now targeting profitable states and concentrating their efforts on ramping up direct to consumer shipments in those states. 

Did You Know: A 2021 wine report showed that the top five states with the highest direct to consumer wine shipments include New York, Washington, Texas, Florida, and the United States’ wine center, California.

What was the First Wine Club in the United States?

The history of Wine Clubs in the United States dates back to 1972 when Paul Kalemkiarian Sr. founded the famous “wine of the month” club in California.[2] It is dubbed the oldest wine club and gained global recognition for its membership offers — its offer currently includes domestic and international wine delivery to members nationwide. Moreover club members also get gift baskets, discounts on wine, and other accessories.

From that moment to date, wine clubs have continually sprouted from virtually every corner of the United States, with top dogs like the New York Times wine club and Williams-Sonoma charging memberships upwards of $90. Likewise, there are some innovative wine clubs that are now targeting millennials with offers that allow members to buy three bottles of wine at $13 each per month — i.e.,  the Winc Wine Club.

Another wine club offering similar incentives to make their club membership attractive is the trendy Plonk Trend wine club. Each member of the Plonk Wine Club can get four bottles of wine for three months for $330. However, it is worth mentioning that, even though these wine clubs have a similar offering, their pricing and schedules differ. [3]

Wine Club Perks are Fueling the Trend

While it is true that more and more people are interested in wine, we cannot take our eyes off the benefits of wine club memberships in the US and their role in driving sales and conversions at vineyards and wineries. 

Being a member of a wine club is fun, and it offers numerous perks and benefits. Some of these benefits include great discounts (of between 10% and 30%) and special access to events at the winery or vineyard to the members, and a certain number of bottles (including vintages) a month at a much lower price range, including shipment that can sometimes be free in some cases. For wineries, customer retention is top on the list of the benefits of having a wine club. 

Wine club memberships (even though they vary from region to region) have a retention span of up to 39 months, which is enough time for wineries to scale and improve their profit margins. Famous wine clubs providing great offers include Martha Stewart Wine Co. Wine Club, SommSelect, and Wine Access.

On this Day

August 28, 1999 — American businessman and the founder of Constellation Brands (Marvin Sands) died on this date. Constellation Brands is a renowned wine-producing company that was founded in 1945. It ranked among the most prominent wine companies globally in terms of sales volume.

December 5, 1933 — The sales, transportation, and manufacturing of alcohol were banned in the US by the 18th Amendment on January 17, 1920. This marked the beginning of the famous Prohibition Era, which ended on this day in 1933. During Prohibition, churches were exempted from taking wine during the sacrament of eucharist and communion.

For more read on American Wine, read the book below!

References:

1. “Why You Should Launch A Wine Club — Vinespring | Ecommerce, Allocations, And Club Management Software”. 2022. Vinespring | Ecommerce, Allocations, And Club Management Software. https://www.vinespring.com/blog/why-you-should-launch-a-wine-club#:~:text=While%20growth%20rates%20vary%20by,growth%20rate%20is%2021%20percent.
2. 2022. Wineofthemonthclub.Com. http://www.wineofthemonthclub.com/downloads/StampsOfAuthenticity.pdf. 
3.  2022. http://fastfood.ocregister.com/tag/paul-kalemkiarian-jr/.