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5 Key Analytics for Wineries Seeking Growth this year

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After coming off of a flat year last year, a lot of wineries and businesses focused on selling wine will be looking at ways to increase sales in the new year. In line with that goal, I wanted to put together some key metrics I’ve found that really give a snapshot of the business which I’ve used to help diagnose why a winery or wine business is not profitable and not growing.

These metrics are only a snapshot in time and will never truly tell the full picture or directly point to why a winery is not profitable. But by wholistically looking at each of these metrics, you can assess different areas of the business that need to change to improve the business, or you’ll simply be doing the same things over and over again expecting different results, aka the definition of insanity.

After consulting with multiple wineries and wine businesses over the last several years, I’ve also found that the biggest challenge to winery growth is a proactive, engaged, and adaptable business owner/partners or executive team that truly wants to do the work to grow the business.

Simply by taking action and assessing your business on these five metrics, you’re already taking the necessary steps to get your business headed in the right direction this year, so here we go:


5 Key Analytics for Wineries Seeking Growth in 2024

Analytics #1: Monthly Cash Flow

The number one metric to judge the health of a business is monthly cash flow. If you can’t sit down and calculate your monthly cash flow, your business is either too complicated, you don’t have your bookkeeping set up right, or you don’t have clarity on where all of your cash goes every month. Cash is king when growing a business. Its a risk mitigation tool and growth accelerant. Monthly cash flow will tell you if your business if profitable in the long run or not and whether it is a viable business model, or if something needs to change such as increase income or cutting expenses.

Now that we got that out of the way, let’s look at analytics that can predict income side balance sheets.


Analytic #2: Wine Club Growth and Churn Rate

As we analyze our income sheet, the size of the wine club is one of our greatest assets, because it is a subscription that productions predictable, sustainable income on a consistent business. Not every winery or wine business has a wine club or is it the largest piece of the business for all wineries, but for wineries that are focused on growing their direct to consumer sales, it is a great metric.

As you analyze your wine club, two key metrics should stand out to you. How many new members you net every month, meaning taking the number of wine club members you gain in a month and subtracting out the number of wine club members you lose which will give you a net score of (+) or (-) x number of wine club members a month. As you look at this number it should tell you a few things, such as if you are gaining a lot of members every month, but losing nearly the same amount every month, that should tell you your wine club conversion system is great, but there may be something off with customer loyalty or service in your club which is causing people to leave.

The reason why this metric is so great, once we have our churn rate we can calculate out over the next year how many wine club members we expect to have at the start of the next business cycle, allowing us to forecast and budget for the year.


Analytic #3: Wine Club Conversion Rate

Now that we understand the health of our wine club better, let’s look at wine club conversion rate. As its been established for direct to consumer focused wineries that wine club growth is key, the wine club conversion rate both online and in the tasting room is the next key metric.


Wine club conversion rate allows your to analyze why people join and why they don’t join your business’s wine club.


This is a key piece of data because if we can’t get people into the wine club, we won’t grow, and it may point to a larger issue in the business such as an unfriendly employee who annoys customers or untrained staff who simply don’t know how to sell your wine club to patrons.


Analytic #4: Total Monthly Wine Orders and Tastings

Another great metric to watch is Total Monthly wine orders and tastings. This metrics is great for measuring foot traffic and seeing if the number of people coming in every month is actually going up, not down. It is also important to compare alongside the other metrics above, because this number can be misleading and not give you a full picture of things like your wine club or profitability.

Once you know your monthly wine orders, you want to calculate the value of each of those orders, which is next.


Analytic #5: Average Wine Order Value

To calculate your average wine order value, simply divide the total value of gross sales that month by the number of orders. This is should give you a rough number that can tell you the value of a customer that walks into the door every day. This number is important because we want to measure how much wine we are able to sell to each individual customer and know what they are worth to us. It also allows us to watch and monitor our sales process, because is this number starts to go down, then we need to work on sales training with staff or find out why customers are spending less.

Analytics that didn’t make the list:

Marketing Insights and Data

Is marketing important in growing a business? Absolutely. Do vanity metrics like instagram follows and photo likes equate to sales? Absolutely not.

I love marketing, and love working with businesses on their marketing, but in my experience I have found that if a business has a profitability problem, its usually not because of bad marketing or low marketing analytics

There usually is another reason why the business isn’t growing.

Gross Revenue

As they say, “Revenue is Vanity, Profit is Sanity.” Gross revenue is good to watch to see how the business is growing on the income side, but as a business grows its gross revenue, typically expenses also increase to support the new income streams, such as payroll and professional services. Which is why you should look at gross revenue right next to monthly cash flow to make sure you are actually scaling your business and not giving up all of your hard earned wine sales income to random and uneccesary expense lines.

Number of Employees

Have you ever met that business owner that loves to brag about how many employees they have? I think creating jobs for others is one of life’s greatest joys, but if you can’t sustain that payroll, why hire that additional employee in the first place? As Mike Michalowicz states in his accountant-shattering book Profit First, pay yourself first, then take care of all of your expenses. And if you don’t have any money left over to pay payroll, you have a problem, that is probably related to one of the analytics up above.

How to Implement these Analytics into your Business

These analytics are a great guide and way to diagnose your wine business in this year. But they shouldn’t replace sound financial advice from a financial expert or Chief Financial Officer. As you look at these analytics, make sure to ask yourself the biggest question with regards to each of the numbers, “WHY?"

Why is our sales number low? Why is the wine club growing and our monthly cash flow not growing?

Analyzing our business allows us to be strategic and identify potential risks and opportunities to grow our brand and deliver amazing wines to more wine lovers every year.


Ready to take the next step for your wine or hospitality brand?