Survey Results Biased: But Direct Wine Sales are Growing!
With more and more people using the internet to find and buy wine, it isn’t hard to see the opportunity presented by direct to consumer sales. This, coupled with relaxed state regulations, is making this channel a legitimate force in the wine industry.
Recently, VinQuest released their annual survey “to measure the size and dynamics of the U.S. consumer direct sales channel.” They surveyed 3500 + bonded wineries in the United States; with 230 actually participating. Paul Mabray feels that their sample size isn’t large enough to be statistically significant; but doesn’t give the numbers behind his reasoning.
With 6.5% participation of wineries, it seems like enough to render relatively accurate results (assuming random selection of participants). After consulting Statistics: Edition 3, by Freedman, Pisani and Purves (who was my Stats 2 Prof. at UC Berkeley), “If a large number of those selected for the sample do not in fact respond to the questionnaire or the interview, non-response bias is likely” page 336, Paragraph 1.
Non-response bias can kill the legitimacy of survey. If a statistics professor looked at VinQuest’s data, they would immediately dismiss the results. However, since their data is not being submitted to the court of law (or statistical journal), there are trends that can be accepted and examined.
Here are some of the major points found by VinQuest’s survey;
- Total direct to consumer sales by U.S. wineries in 2006: $2.4 Billion
- Value of wine shipped directly to U.S. consumers in 2006: $1 Billion
- 2006 wine club sales at U.S. wineries: $598 Million: 66% Increase
- 2006 online sales at U.S. wineries: $197 Million: 45% Increase
- 2006 tasting room sales at U.S. wineries: $1.3 Billion: 18% Decrease
- 2006 event-driven sales at U.S. wineries: $100 Million: 30% Decrease
One statistic I take issue with is “2006 tasting room sales at U.S. wineries: $1.3 Billion: 18% Decrease.” VinQuest’s study said “Visitor counts and sales per guest were down in many key U.S. wine regions, leading to lower tasting room and event sales in 2006.” What exactly is a “key U.S. wine region”?
If you are going to publish results that are intended to be taken seriously, you have to fully disclose your methods and results. Selective reporting of results is a huge red flag; and is grounds for dismissing the entire study.
However, taken at face value, these results are promising. The online wine industry is growing, and as state regulations begin to loosen up, this trend will continue the way its going. This is good for both winery and consumer.
Options for consumers will grow; beyond what their local grocery store offers. Wineries will not be forced to dump their wine at half price to wholesalers. And the collective knowledge of the public’s perception of wine will increase with growing exposure to more wineries and regions. It seems to be a win, win, win.
Written by: Ryan Fujiu on Wednesday, April 04 2007
diamondgirl said:
Yeah, I've heard people talking about this and was wondering about these things. I don't work in the wine industry, but it seems a bit fishy. I wonder what's really going on?
Posted 503 days ago.
ryan said:
Its hard to take their results seriously when they are selectively reporting information and have an obvious agenda (they are a consumer direct company). Its one thing to disclose that information, but looking at the executive summary, they did nothing of the sort. Maybe the disclosure is on the full report; I wonder if they have anything to say about the situation.
Posted 503 days ago.
eljefe said:
This one has been bugging me and I think you hit the nail on the head regarding the "non-response bias". I do think 235 out of a population of 3500 is enough PROVIDED those 235 were sampled randomly. Instead they "self selected". So I think all you can really do with this "data" is engage in "if this is true, what could it mean?" conjectures... Like: "TR sales are down 18%". Perhaps sales are down only in TRs that have the time to mess with surveys, while the others are too busy selling wine...;-) Or maybe it means that consumers are tired of the "key wine regions" and are looking for something new...?
Posted 503 days ago.