Shipments by Washington wineries tumbled by 12% in 1Q 2020 relative to the same period a year ago. This represents the steepest quarterly drop since 2013, though the result comes against a strong 2019 comparison.
The contraction was driven by a 15% drop in out-of-state shipments. Hogue Cellars, which is included in the pending Gallo / Constellation deal, was responsible for nearly a third of the decline.
Direct-to-consumer sales/shipments were also down sharply – but shipments to in-state distributors and retailers bucked the trend with a slight gain. The decline in DtC broke a streak of 21 consecutive quarterly gains.
The weak first quarter results were only partly attributable to the COVID-19 outbreak, as the March numbers were just a touch worse than those of January and February. However, the erosion in DtC was more pronounced, suggesting that the lockdown was exerting a negative impact on sales. Consequently, small wineries – who have outperformed the broader industry in recent years – experienced a double-digit contraction in their collective first quarter shipments.
The April figures (available later this month) will provide a more comprehensive picture of the trajectory of the Washington wine industry during the COVID-19 lockdown. Contact Vintage Economics for more detailed metrics and analysis.
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