Wine Sales Predicted to Grow Between 10 to 14 Percent
HELENA, Calif. – January 18, 2017 –Silicon Valley Bank (SVB)released its annual State
of the Wine Industry Report today.
The 16th annual State of the Wine Industry report combines SVB’s expertise
in the U.S. wine business with proprietary research to deliver forecasts and
predictions for the year ahead in wine.
Highlights from the 2017 report show strong
market conditions overall and identify notable trends that may signal adjustments
in consumption patterns and segment prices:
- Wines sold between $12 and $25 will
grow in demand as will high-end luxury wines with an established brand. We
expect to see small price increases in these segments, with volume and
price drops for bottles priced under $9.
- Sales growth is
predicted between 10 to 14 percent for the premium wine segment. The confluence
of better retail conditions, strong consumer demand and good supply will
collide to deliver improving industry performance.
- Overall supply is
balanced with shortages of high-quality pinot noir and cabernet, but excesses
are evident in certain non-core varietals and for grapes destined for
- Slightly higher per capita consumption
can be expected if economic conditions continue to improve despite retiring,
wine-loyal baby boomers being replaced by less affluent millennials who
are ambivalent about their alcoholic beverage of choice.
- Winery acquisitions to remain active through
- Farm labor supply and costs will be the
dominant concerns in the wine business in 2017.
“We foresee a strong year ahead for
the wine industry, particularly in the premium wine segment, with small price
increases in the $12-25 bottle and luxury wine categories,”said Rob McMillan, founder of Silicon Valley Bank’s Wine Divisionand
author of the report. “However, critical labor issues will be the dominant
concern this year. The reality in the wine business today is that the labor
force is inadequate in every growing area, which is leading to increased costs and
more incentive to mechanize.”
Additional findings and predictions
- Import growth in lower premium price
points is expected, due to a strong and strengthening U.S. dollar, available
foreign supply, foreign in-country marketing support and willing millennials.
- Millennials are beginning to affect
the lower price range of premium sales. Their presence is most visible in the
$8 to $11.99 red blend category, but they will gradually move away from blends
and into varietal wines or imports as their incomes improve.
- Total harvest in
California for 2017 is predicted to be 3.95 million tons crushed, 7 percent
McMillan is discussing the annual report and the
state of the wine industry in a live videocast online today at 9:30 a.m.
Pacific time with Amy Hoopes, chief marketing officer and executive vice
president of global sales at Wente
Vineyards, Dan Leese, president of V2
Wine Group, and Paul Mabray, vice president of
social media and reputation management at Avero. A replay of the
discussion will be available after the event.
Read the full report here: http://www.svb.com/wine-report/
To participate in Silicon Valley
Bank’s annual Wine Conditions Survey in the future, contact the author Rob
McMillan at firstname.lastname@example.org or on Twitter @SVBWine.
About Silicon Valley Bank
For more than 30 years, Silicon Valley
Bank (SVB) has helped innovative companies and their investors move bold ideas
forward, fast. SVB provides targeted financial services and expertise through
its offices in innovation centers around the world. With commercial,
international and private banking services, SVB helps address the unique needs
of innovators. Learn more at svb.com.
Silicon Valley Bank’s Wine Division
Founded in 1994, SVB’s Wine Division
offers financial services and strategic advice to premium vineyards and
wineries. With one of the largest banking teams in the country dedicated to the
wine industry, SVB’s Wine Division has offices in Napa and Sonoma counties and
primarily serves clients in the fine wine producing regions along the West
Coast of the United States. Learn more at www.svb.com/winedivision
Silicon Valley Bank is a member of SVB
Financial Group. ©2017 SVB Financial Group. All rights reserved. Silicon Valley
Bank is a member of FDIC and Federal Reserve System. SVB>, SVB Financial
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