USA, Napa and Sonoma: sky-high prices for tastings, visits decline

A recent webinar by Silicon Valley Bank revealed that the increase in prices for wine tastings at wineries in Napa Valley, California, is pushing consumers toward more affordable areas. Furthermore, unlike many other products, Americans are ordering a lower percentage of wine directly from wineries compared to the pre-pandemic period.

The 2024 Direct-to-Consumer (DtC) Survey by Silicon Valley Bank highlighted a decline in DtC wine sales in terms of volume, but an increase in value for wines priced between $20 and $79. DtC sales, which include wine clubs, online orders, and tasting room sales, are critical for most American wineries. The survey revealed that in the USA, DtC represents 72% of the average sales of a winery, compared to 17% from retail stores and 11% from restaurants. It is therefore crucial for many wineries to monitor the trend of direct-to-consumer sales.

Average prices for tastings

The number of visitors and wine tourists at wineries has increased in some states like Virginia, Oregon, and other states not located on the West Coast. However, visits to wineries in Napa County have decreased by 37% compared to 2016 numbers, and by 32% in Sonoma County during the same period.
An obvious reason is the increase in prices for tastings. In 2016, the average price for a standard tasting in the United States was $16, while a reserve tasting was $34. Last year, the national average was $38 for a standard tasting and $72for a reserve. But in Napa County, the average price is now $75 for a standard tasting and $138 for a reserve. In Sonoma County, the numbers are $43 for a standard tasting and $81 for a reserve. No other region comes close to these prices; the most expensive area after these is Oregon ($33 standard, $61 reserve).

Additional costs and impact on the customer

It’s not just a matter of prices for tastings. The average cost of a hotel room in Napa County in 2022 was $470 per night, compared to $327 in 2019. Moreover, tipping is now suggested in two-thirds of the wineries; only 21% allowed it 10 years ago. In the United States, the average spending of visitors on wine is $209, and this figure is certainly higher in Napa Valley. In this case, a 20% tip represents a significant expense.

MJ Dale, founder and CEO of Customer Vineyard, stated: “The cumulative impact on the wine tourist is substantial. It’s not just about the tasting price. It’s about the cost of a nearby hotel room, the spending on bottles, the tip. Put it all together, and the price of a visit is significantly higher in most wine tourism areas.”

Wine clubs in crisis and wrong social media platforms

Wineries continue to insist that visitors join their wine clubs, and it’s no wonder since an average member will spend $2700 over their lifetime. However, only 10% of wine tourists join wine clubs, partly because discounts have dropped to an average of 17%, and only 16% of wineries offer free shipping. In the USA, the average duration of a membership in a wine club is just 32 months.

The 2024 report shows that the area that has seen the most alarming declines is Paso Robles. Despite reasonable tasting prices for California ($30 standard, $44 reserve) and above-average discounts for wine clubs (22%), DtC sales in volume have dropped by 6.5%, and visits have decreased by 18% compared to 2016. Additionally, Paso Robles wineries lost 27% of wine club members in 2023, the highest decline among the regions examined.

According to MJ Dale, wineries are also using the wrong social media: “Most of the target customers are on LinkedInbecause that’s where wealthy people are.” However, to date, over 70% of producers use Instagram and Facebook and 13% use YouTube.