Predicting Higher Demand for Wine in 2021.

    The Case to be Made for a Party 

At the end of Prohibition in the U.S. the consumption of wine as measured, slowly grew until war was declared in 1941 and rationing took over everyday lives. Whiskey distilleries were repurposed to produce grain alcohol for torpedo fuel, which interestingly created unintended consequences of new cocktails for sailors and higher rum consumption in the U.S. Fifteen percent of total beer production was allocated to servicemen and while wine wasn't rationed, prices of alcohol increased during the war making it difficult to afford a bottle of anything, so wine consumption fell. 

Imagine the exuberance at the end of 1945 when WWII came to an end, completing a fifteen-year period that spanned the 1929 Market Crash exacerbated by the Dust Bowl, leading to the Great Depression, food lines, increased poverty and homelessness, and high levels of unemployment. 

On August 15th, 1945 with Japan's surrender and acceptance of the terms of the Potsdam Declaration, there was hope those unhappy times would soon be behind the country. The sacrifice of the Greatest Generation had paid off and the men and women in the military would soon be coming home! Life would eventually return to an altered normal - but a much better one full of peace and hopefulness.

As the soldiers were brought home starting in 1945 with those in the European Theatre under Operation Magic Carpet, a rolling party broke out on the homefront. It is estimated that 1946 consumption of alcohol reached pre-prohibition levels of 2 liters per capita. Wine became a beverage of interest for many of the returning service members who had experienced European wine.

SVB Annual State of the Industry Report and Videocast is Wednesday. Sign up!

 

    We're All Glad that Year is Over

2020 will go down as the year in which we answered the heretofore rhetorical question - What else can go wrong? That is the opening line from the 2021 SVB State of the Industry Report that will come out Wednesday the 13th. 

Throughout 2020 many of us experienced the same run of emotions from disbelief, fear, acceptance, determination, and occasionally even a bit of joy through one of the most difficult times in history. As we went through the year, we would think to ourselves - this has to be the worst of it. It has to get better from here? 

We all fought through a series of events, increasing our vocabulary along the way: Coronavirus, COVID, S.I.P. Orders, social distancing, Zoom meetings, herd immunity, PPE, and pandemic - which I thought only happened in bad science fiction movies before last March.

    Will 2021 Be Better than 2020?

I can say with absolute confidence that 2021 will be better than 2020, but I can also say that “normal,” when we get there, will be different from what we left. But we have lives to live and businesses to run so let's get to it! 

Despite the headwinds and distractions, there are opportunities we need to consider and take advantage of and consumers who will be looking to buy your wine. 

We need information and the right tools to be able to plan. While we have to talk about the past for context, this coming Wednesday, I hope to give everyone the benefit of a look forward.

Start with the headline slide for a teaser. Despite the gloomy events of the past year, luxury wine sales held their own, particularly when you consider this performance in context with the last recession. The last recession featured trading down. This recession has given a breath of life to trading up again! Aren't you curious why?

The Annual SVB State of the Industry Report is Arriving January 13th. Sign up for the Webinar and Report!

 

This is the opening photo from the 20th Annual SVB State of the Industry Report where we begin with a reflection; not on our industry, but on how we each as individuals adapted and prevailed during the most unique business conditions in our lifetimes. 

It's important to celebrate this victory but now that vaccines are being given and we can see an end in sight, what's next? Will business conditions return to normal? 

If we answer that question truthfully, the answer is no. That means doing nothing and hoping for a good year will produce poor outcomes. Change is needed and will require all wine businesses to apply the learnings from 2020 and evolve to find the unique prescription for your individual winey's success.