XML 32 R21.htm IDEA: XBRL DOCUMENT v3.23.1
SEGMENT REPORTING
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
SEGMENT REPORTING

NOTE 15 – SEGMENT REPORTING

 

The Company has identified two operating segments, Direct Sales and Distributor Sales, based upon their different distribution channels, margins and selling strategies. Direct Sales include retail sales in the tasting rooms, wine club sales, internet sales, on-site events, kitchen and catering sales and other sales made directly to the consumer without the use of an intermediary, including sales of bulk wine or grapes. Distributor Sales include all sales through a third party where prices are given at a wholesale rate.

The two segments reflect how the Company’s operations are evaluated by senior management and the structure of its internal financial reporting. The Company evaluates performance based on the gross profit of the respective business segments. Selling expenses that can be directly attributable to the segment, including depreciation of segment specific assets, are included, however, centralized selling expenses and general and administrative expenses are not allocated between operating segments. Therefore, net income information for the respective segments is not available. Discrete financial information related to segment assets, other than segment specific depreciation associated with selling, is not available and that information continues to be aggregated.

 

The following table outlines the sales, cost of sales, gross margin, directly attributable selling expenses, and contribution margin of the segments for the years ended December 31, 2022 and 2021. Sales figures are net of related excise taxes.

 

   Twelve Months Ended December 31, 
   Direct Sales   Distributor Sales   Unallocated   Total 
   2022   2021   2022   2021   2022   2021   2022   2021 
Sales, net  $15,732,142   $13,272,659   $18,201,939   $18,514,205   $-   $-   $33,934,081   $31,786,864 
Cost of sales   4,710,457    3,470,963    10,409,528    9,650,228    -    -    15,119,985    13,121,191 
Gross margin   11,021,685    9,801,696    7,792,411    8,863,977    -    -    18,814,096    18,665,673 
Selling expenses   10,690,806    6,929,882    2,020,713    1,914,207    928,771    759,634    13,640,290    9,603,723 
Contribution margin  $330,879   $2,871,814   $5,771,698   $6,949,770                     
Percent of sales   46.4%   41.8%   53.6%   58.2%                    
General and administrative expenses                       5,720,224    5,371,931    5,720,224    5,371,931 
Income (loss) from operations                                $(546,418)  $3,690,019 

 

Direct sales include $97,652 and $103,471 of bulk wine and grape sales in the years ended December 31, 2022 and 2021, respectively.

 

Net direct-to-consumer sales, including bulk wine, miscellaneous sales, and grape sales, represented approximately 46.4% and 41.8% of total net revenue for 2022 and 2021, respectively.

 

Net sales through distributors represented approximately 53.6% and 58.2% of total net revenue for 2022 and 2021, respectively.