PA residents mail-ordered $24 million worth of wine in a year

Wine clubs are finally taking off in Pennsylvania.

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Danya Henninger
danya

Welcome to the club, Pennsylvania. Mail-order wine is on the rise, and Pa. residents are finally able to join the party.

Direct-to-consumer wine shipments — where people buy bottles or cases straight from wineries and vineyards, often via subscription service “wine clubs” — jumped 18.5 percent to $2.33 billion last year across the U.S., per industry group Wines & Vines in collaboration with ShipCompliant by Sovos. The total volume of direct-shipped wine has nearly doubled since 2010.

But before the sweeping liquor law changes Pennsylvania enacted in August 2016, stringent Liquor Control Board restrictions meant people here couldn’t get in on the wine club craze — at least not legally.

Now, thanks to the state’s newly created Direct Wine Shipper license, they can. And they are.

From August 2016 through June 2017, the first official reporting period for licensees, wineries directly shipped $24.3 million worth wine to Pennsylvania residents, per LCB spokesperson Elizabeth Brassell.

A majority of wine sold this way came from the West Coast. Out of around 1,100 direct wine shippers currently listed in the LCB license database, a full 675 of them hail from California, the most of any state. Another 63 are in Washington, and Oregon accounts for 59 more. Pennsylvania has 104 wineries that can ship to you directly. There’s also a sprinkling of producers from various other states, including Virginia, New Mexico, Florida, Texas, Massachusetts, Maryland, New Jersey and Illinois.

(In the past, some small wineries were allowed to ship directly to consumers, but one case per month and only wines the LCB didn’t already sell. Now that restriction is gone, and people can order up to 36 cases a year, three times as much as before.)

The direct-shipped wine sold under the new model — which comprised 1.1 million “units” total last year — was neither higher or lower than anticipated, said Brassell, “because we didn’t necessarily have any expectations.” The board did expect some kind of impact to its bottom line, since ostensibly every bottle of wine ordered from a producer is one the LCB doesn’t get to sell.

Indeed, the LCB’s retail wine sales took a tiny dip last year, down 0.3 percent to $848.9 million. But even this small drop is not necessarily attributable to the Direct Wine Shipper license.

Because the other, more noted change to state liquor laws in 2016 was the new permit that allowed grocery stores to sell wine. Which explains why what the LCB terms “sales to licensees” — i.e. grocery stores and all the bars and restaurants that serve wine — were up nearly 40 percent last year, to the tune of $193.6 million. In total, the LCB’s wine sales in fiscal year 2016-2017 increased by $49.6 million.

So direct wine shipping hasn’t yet had a negative effect on LCB revenue. (Direct-to-consumer wine sales are taxed by the state, but the money goes directly to the General Fund, not into liquor board coffers. The LCB does collect the $250 annual license renewal fee.)

But it could become a factor — per a Wine Business Monthly survey, wine club membership grew 30 percent across the nation last year, and isn’t likely to stop.

Brassell couldn’t say whether she considers wine clubs a threat to the LCB’s longterm health.

“The marketplace is changing,” Brassell said. “As all of the ingredients to the big recipe of change have gone into the pot, it’s tough to draw them back out one by one.”

If all this makes you want to join a wine club, here’s some advice on chosing one from Philly experts.