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SEGMENT REPORTING
 3 Months Ended
Mar. 31, 2024
Segment Reporting [Abstract]  
SEGMENT REPORTING

6) 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 (loss) 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 three months ended March 31, 2024 and 2023. Sales figures are net of related excise taxes.

 

   Three Months Ended March 31, 
   Direct Sales   Distributor Sales   Unallocated   Total 
   2024   2023   2024   2023   2024   2023   2024   2023 
Sales, net  $4,286,156   $4,071,649   $4,516,924   $4,237,291   $-   $-   $8,803,080   $8,308,940 
Cost of Sales   1,295,145    1,289,933    2,235,213    2,540,544    -    -    3,530,358    3,830,477 
Gross Profit   2,991,011    2,781,716    2,281,711    1,696,747    -    -    5,272,722    4,478,463 
Selling and Marketing Expenses   3,263,381    3,214,501    504,424    531,741    259,977    237,338    4,027,782    3,983,580 
Contribution Margin  $(272,370)  $(432,785)  $1,777,287   $1,165,006                     
Percent of Sales   48.7%   49.0%   51.3%   51.0%                    
General and Administration Expenses                       1,847,517    1,469,833    1,847,517    1,469,833 
Loss from Operations                                $(602,577)  $(974,950)

 

Direct sales include zero bulk wine sales in the three months ended March 31, 2024 compared to $10,000 bulk wine sales in the three months ended March 31, 2023.