tag:blogger.com,1999:blog-9417318307050312302024-03-18T21:37:26.225-07:00SVB on WineThe Business of US Fine WineRob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.comBlogger200125tag:blogger.com,1999:blog-941731830705031230.post-68922053956811701002024-03-18T21:31:00.000-07:002024-03-18T21:36:54.153-07:00Should SVB continue to produce the Annual DTC report?<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgM2TeO-clEvbVoeNcRDktGL_Mp29GSTmCJDVesQy53x2TEgXmfGLipQNYdVrudzc1fUIXsk_I-22bC_Q7qEg0PRRaGoezxrG2cK09LwIlPDNTXyu-67KaBZk1c6HCzH6J5jkFtHNXcMiq3jZbMqR-RiqHJNkJUhBW337q6_79aOS31Du9v7tmwcQIHp9M/s1044/image001.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="725" data-original-width="1044" height="278" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgM2TeO-clEvbVoeNcRDktGL_Mp29GSTmCJDVesQy53x2TEgXmfGLipQNYdVrudzc1fUIXsk_I-22bC_Q7qEg0PRRaGoezxrG2cK09LwIlPDNTXyu-67KaBZk1c6HCzH6J5jkFtHNXcMiq3jZbMqR-RiqHJNkJUhBW337q6_79aOS31Du9v7tmwcQIHp9M/w400-h278/image001.png" width="400" /></a></div><br /><p style="text-align: left;"><span style="color: #0e101a; font-family: arial;"><b>This is my annual attempt to plead for your help, without which we can't produce the 13th Annual Direct-to-Consumer Report. </b></span></p><p style="text-align: left;"><span style="color: #0e101a; font-family: arial;">If there was ever a time when actionable information and insights were needed, this is the time. But we are close to a crisis point being unable to get s sufficient survey responses. </span></p><p style="text-align: left;"><span style="font-family: arial;"><span style="mso-fareast-font-family: "Times New Roman";"><span style="color: #0e101a;">The SVB Annual Direct-to-Consumer Survey has been open for two weeks and is
</span><b><span style="color: #b45f06;">scheduled to close this Friday, March 22nd.</span></b><span style="color: #0e101a;"> As of this writing, we have 165
responses with just a few days remaining. That's</span></span><span style="color: #0e101a; mso-fareast-font-family: "Times New Roman";"> far from the 500 we need to produce good results. (Click the top chart to see your region's performance thus far.)</span></span></p><p style="text-align: center;"><span style="font-family: arial;"><span style="color: #0e101a; mso-fareast-font-family: "Times New Roman";"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPgZB6Y0Cg4oSUrjceI-8pH5QuGQOf_zZ4WAXnJS6UrOw2Cu8vGoRGeM244X5mpL4DRb1xAKn5wzi6wa-pIJZv9bLhyphenhyphen71DCS_59EjUFz38zhZ4iaa4CQ3-Q6TRSEMg2-IW_J8qIE02IAg/s1600/Pagebreak+Temp.png" style="font-family: "Times New Roman"; margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="71" data-original-width="600" height="37" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPgZB6Y0Cg4oSUrjceI-8pH5QuGQOf_zZ4WAXnJS6UrOw2Cu8vGoRGeM244X5mpL4DRb1xAKn5wzi6wa-pIJZv9bLhyphenhyphen71DCS_59EjUFz38zhZ4iaa4CQ3-Q6TRSEMg2-IW_J8qIE02IAg/s320/Pagebreak+Temp.png" width="320" /></a></span></span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in; text-align: left;"><span style="color: #0e101a; font-family: arial; mso-fareast-font-family: "Times New Roman";">The survey has just 29 questions. It should take 10 to 15 minutes to complete, even less if you are prepared. Many complete the survey in under five minutes. If you want to see the questions in advance,
you can <a href="https://www.svb.com/globalassets/library/uploadedfiles/wine/2024-direct-to-consumer-survey.pdf" target="_blank"><span style="color: #4a6ee0;">download and print them here.</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in; text-align: left;"><span style="font-family: arial;"><span style="color: #0e101a;">In May, all survey participants will receive
high-level analysis, benchmarks, and complete sanitized respondent data,
anonymized of all personal and business-identifying information. Nobody</span><b style="color: #0e101a;"> else
gets this data, and it can't be purchased.</b></span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in; text-align: left;"><span style="color: #0e101a; font-family: arial;">Silicon Valley Bank goes to great lengths and costs to provide this report to the industry gratis. Still, it's a partnership
with you: Without survey responses, we can't produce this industry resource.</span></p><p class="MsoNormal" style="line-height: normal; margin-bottom: 0in; text-align: left;"><span style="font-family: arial;"><span style="color: #0e101a;">So please spread the word on your social channels and make this a
personal goal. Your choice </span><span style="color: #0e101a;">to participate or not is a vote for us to continue with this initiative or phase it out.</span></span></p><p class="MsoNormal" style="line-height: normal; margin-bottom: 0in; text-align: center;"><span style="color: #0e101a; font-family: "Times New Roman", serif; font-size: 12pt;"></span></p><div class="separator" style="clear: both; text-align: center;"><span style="color: #0e101a; font-family: "Times New Roman", serif; font-size: 12pt;"><div class="separator" style="clear: both; text-align: center;"><a href="https://svb.co1.qualtrics.com/jfe/form/SV_a5ZfcHgbOEJj0l8?source=ROBSBLOG" style="font-family: "Times New Roman"; font-size: medium;" target="_blank"><img alt="" border="0" data-original-height="54" data-original-width="173" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg553ml06a9AvwbwGjJ4bAE_BIBfR3yHJ0ilpH_0MiVXbUHM49KFSZWkDhAX7RA-qQRO3puWTGoeoZgBZOFYHRUzgL_1cDAF9tmKyc0_2b_23dh38udSLV7qKd9DT266_vSmiL7QkjHRqg/s1600/Take+the+Survey+Temp.jpg" /></a></div></span></div><span style="color: #0e101a; font-family: "Times New Roman", serif; font-size: 12pt;"><br /></span><p></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0in;"><span style="color: #0e101a; font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: "Times New Roman";"> </span></p>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.comNapa, CA, USA38.2975381 -122.2868659.9873042638211516 -157.443115 66.607771936178835 -87.130615tag:blogger.com,1999:blog-941731830705031230.post-41594638099324988182024-03-11T08:24:00.000-07:002024-03-11T11:28:57.420-07:00What are you doing to improve club signups away from the tasting room?<p style="text-align: center;"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjEUzY0uQXNl_9_lckKgLNTdAOYvfR_4WwgeVM4OWG-fB42QyYM6L6mFSpxTojzNiDsIN8D4wvH-yYsXGAnTCJiMsO6RIG2RqlMU78GdwjgiiTHxcgxvR6IlDv1vFPUuJ0jJsthfmS07kzuA420Z5nYbdJYW0QGGbajm2LH1Fengmko1t0E_vH1rx3khiI/s4061/Moving%20Target.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="4061" data-original-width="3505" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjEUzY0uQXNl_9_lckKgLNTdAOYvfR_4WwgeVM4OWG-fB42QyYM6L6mFSpxTojzNiDsIN8D4wvH-yYsXGAnTCJiMsO6RIG2RqlMU78GdwjgiiTHxcgxvR6IlDv1vFPUuJ0jJsthfmS07kzuA420Z5nYbdJYW0QGGbajm2LH1Fengmko1t0E_vH1rx3khiI/s320/Moving%20Target.png" width="276" /></a></div><div><br /></div><div><span style="color: #b45f06; font-size: medium;"><b>The Target is Moving Again</b></span></div><div><br /></div><div>Some of the questions we've answered over the years through the SVB annual direct-to-consumer survey have been critical to the industry's success, such as whether standing or seated tastings are more effective, or going back over a decade ago, what the lifetime value of a direct-to-consumer customer is. </div><div><br /></div><div>The latter question was asked at a time when we were moving from an over-dependence on three-tier sales and evolving with the freedoms extended with the Granholm decision. Today, we find ourselves at a new point of evolution, so answers are critical to success.</div><div><br /></div><div>With two consecutive years of lower tasting room visitation impacting club memberships, <b><span style="color: #b45f06;">wouldn't you be interested in knowing what your neighbors are doing to improve club signups that don't come through the tasting room?</span></b> That's one of the questions we are posing this year.</div><div><br /></div><div>Please do your part and contribute to this annual industry partnership with me. Without your participation, I can't produce the information that can help the industry. </div><div><br /></div><div><b><span style="color: #cc0000;"><a href="https://svb.co1.qualtrics.com/jfe/form/SV_a5ZfcHgbOEJj0l8?source=ROBSBLOG" target="_blank">The 2024 DtC survey is now open and will close </a>on March 22nd.</span></b></div><div><div style="clear: both;"><br /></div><div style="clear: both;">In May, all respondents who complete the survey will receive high-level analysis, benchmarks, and the complete sanitized respondent data, anonymized of all personal and business identifying information. Nobody else gets this data, and it can't be purchased. At the end of May, we will release a videocast to the industry and, along with other industry experts, discuss the findings. </div><div style="clear: both;"><br /></div><div style="clear: both;">This year, the survey should take you fifteen to twenty minutes to complete and even less if you are a little prepared. If you would like to see the questions in advance, you can <a href="https://www.svb.com/globalassets/library/uploadedfiles/wine/2024-direct-to-consumer-survey.pdf" target="_blank">download and print them here.</a></div><p>Are you ready to participate in the survey this year?</p><div class="separator" style="clear: both; text-align: center;"><a href="https://svb.co1.qualtrics.com/jfe/form/SV_a5ZfcHgbOEJj0l8?source=ROBSBLOG" target="_blank"><img alt="" border="0" data-original-height="54" data-original-width="173" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg553ml06a9AvwbwGjJ4bAE_BIBfR3yHJ0ilpH_0MiVXbUHM49KFSZWkDhAX7RA-qQRO3puWTGoeoZgBZOFYHRUzgL_1cDAF9tmKyc0_2b_23dh38udSLV7qKd9DT266_vSmiL7QkjHRqg/s1600/Take+the+Survey+Temp.jpg" /></a></div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPgZB6Y0Cg4oSUrjceI-8pH5QuGQOf_zZ4WAXnJS6UrOw2Cu8vGoRGeM244X5mpL4DRb1xAKn5wzi6wa-pIJZv9bLhyphenhyphen71DCS_59EjUFz38zhZ4iaa4CQ3-Q6TRSEMg2-IW_J8qIE02IAg/s1600/Pagebreak+Temp.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="71" data-original-width="600" height="37" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPgZB6Y0Cg4oSUrjceI-8pH5QuGQOf_zZ4WAXnJS6UrOw2Cu8vGoRGeM244X5mpL4DRb1xAKn5wzi6wa-pIJZv9bLhyphenhyphen71DCS_59EjUFz38zhZ4iaa4CQ3-Q6TRSEMg2-IW_J8qIE02IAg/s320/Pagebreak+Temp.png" width="320" /></a></div></div>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.com0tag:blogger.com,1999:blog-941731830705031230.post-64734642490293630042024-01-21T14:38:00.000-08:002024-01-22T15:19:40.257-08:00The 2024 SVB State of the Industry Report & replay is available for download<p> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEga9k9J3DpEvtG_2DPCREOXuNGd6VNHiNnwb3rsJTplHEfFhO12ZBZeyGuPfBv5n1lEOxH0QMRQwDUyxfYEZiGhA3RIbzg-EfLSr5O39-kdYcmf7DKCOFK8oQeQWzR2hHSGhv0jtDx0krqtemF06PhnoZtftB-Qw6KeWHcmOtjTC6Uw_BY7PMQA52vgMYU/s853/2024-SOTI-wholesale-alcohol%20gif%20image.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="480" data-original-width="853" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEga9k9J3DpEvtG_2DPCREOXuNGd6VNHiNnwb3rsJTplHEfFhO12ZBZeyGuPfBv5n1lEOxH0QMRQwDUyxfYEZiGhA3RIbzg-EfLSr5O39-kdYcmf7DKCOFK8oQeQWzR2hHSGhv0jtDx0krqtemF06PhnoZtftB-Qw6KeWHcmOtjTC6Uw_BY7PMQA52vgMYU/w400-h225/2024-SOTI-wholesale-alcohol%20gif%20image.gif" width="400" /></a></div><p></p><p class="MsoNormal">Nearly 3,000 attendees from dozens of the wine-producing
countries of the world tuned in on January 18<sup>th</sup> to hear from Rob
McMillan, EVP & Wine Division Founder, Crimson Wine Group CEO Jennifer
Locke, industry innovator Paul Mabray, and Enolytics SVP of Professional
Services Ed Thralls as they discussed the trends and findings identified in
SVB’s 23rd annual State of the US Wine Report. </p><p class="MsoNormal"><span class="normaltextrun"><b><span face=""Calibri",sans-serif" style="font-size: 11pt;">Watch the Replay</span></b></span><span data-contrast="auto" style="-webkit-tap-highlight-color: transparent; -webkit-user-drag: none; font-variant-ligatures: none; user-select: text;" xml:lang="EN-US"><span style="-webkit-tap-highlight-color: transparent; -webkit-user-drag: none; user-select: text;"><span class="normaltextrun"><span face=""Calibri",sans-serif" style="font-size: 11pt;">:</span><span style="-webkit-tap-highlight-color: transparent; -webkit-user-drag: none; user-select: text;"> </span></span></span></span><a href="https://www.youtube.com/watch?v=ldCMNtcG-Bc"><span style="color: black; mso-style-textfill-fill-alpha: 100.0%; mso-style-textfill-fill-color: black;">SVB State of the Wine Industry - 2024 Virtual Event (youtube.com)</span></a></p><p class="MsoNormal"><o:p></o:p></p><p class="MsoNormal"><span data-contrast="auto" style="-webkit-tap-highlight-color: transparent; -webkit-user-drag: none; font-variant-ligatures: none; user-select: text;" xml:lang="EN-US"><span data-contrast="auto" style="-webkit-tap-highlight-color: transparent; -webkit-user-drag: none; user-select: text;" xml:lang="EN-US"><span data-ccp-props="{"201341983":0,"335559739":0,"335559740":240}" style="-webkit-tap-highlight-color: transparent; -webkit-user-drag: none; user-select: text;"> </span></span></span></p><p class="MsoNormal"><span data-contrast="auto" style="-webkit-tap-highlight-color: transparent; -webkit-user-drag: none; font-variant-ligatures: none; user-select: text; white-space-collapse: preserve;" xml:lang="EN-US"><span style="-webkit-tap-highlight-color: transparent; -webkit-user-drag: none; user-select: text;"><span class="normaltextrun"><b><span face=""Calibri",sans-serif" style="font-size: 11pt;">Read the Report Here: </span></b></span></span></span><span data-contrast="auto" style="-webkit-tap-highlight-color: transparent; -webkit-user-drag: none; font-variant-ligatures: none; user-select: text; white-space-collapse: preserve;" xml:lang="EN-US"><a href="https://www.svb.com/trends-insights/reports/wine-report/" style="-webkit-tap-highlight-color: transparent; -webkit-user-drag: none; user-select: text;" target="_blank"><span class="normaltextrun"><span data-ccp-charstyle="Hyperlink" style="-webkit-tap-highlight-color: transparent; -webkit-user-drag: none; user-select: text;"><span style="color: #0563c1;"><span data-contrast="none" style="-webkit-tap-highlight-color: transparent; -webkit-user-drag: none; user-select: text;" xml:lang="EN-US">State of the US Wine Industry Report 2024 | Silicon Valley Bank (svb.com)</span></span></span></span></a><span class="eop"></span><span data-contrast="auto" style="-webkit-tap-highlight-color: transparent; -webkit-user-drag: none; user-select: text;" xml:lang="EN-US"><span data-ccp-props="{"201341983":0,"335559739":0,"335559740":240}" style="-webkit-tap-highlight-color: transparent; -webkit-user-drag: none; user-select: text;"> </span></span></span></p><p class="MsoNormal" style="margin-bottom: 0in;"></p><h3 style="text-align: left;"><b><span style="font-size: 12pt; line-height: 107%;"><span style="color: #b45f06;">Recognizing the Need for
Change </span></span></b></h3><p></p><p class="MsoNormal" style="margin-bottom: 0in;">The key findings indicate that the
alcohol beverage market across the board is in a period of change, driven by
evolving consumer dynamics, including the aging of older wine-focused boomers,
who are being replaced by a new set of primary consumers who drink across
categories, drink less wine, and consume less alcohol. </p><p class="MsoNormal" style="margin-bottom: 0in;"><o:p></o:p></p><p class="MsoNormal" style="margin-bottom: 0in;"></p><blockquote><i>“With the current messaging about
alcohol as it relates to health and wellness, premium wine is well suited to
meet the prevailing guidance around benefits and moderation,” said Jennifer.
“We don’t have to reinvent what we are making; we have to retell our story and
tell it collectively.” </i></blockquote><p></p><p class="MsoNormal" style="margin-bottom: 0in;"><o:p></o:p></p><p class="MsoNormal" style="margin-bottom: 0in;"><o:p> </o:p><b><span style="font-size: 12pt; line-height: 107%;">Key Takeaways</span></b></p><p class="MsoNormal" style="margin-bottom: 0in;">Premium wineries experienced mixed
success during the past year. The value of premium wine is still growing, but
we anticipate volume sales will finish lower this year. The industry will need
to find collaborative solutions to link wine attributes with the segmented
values of newer consumers to increase demand while at the same time finding
efficiencies in sales, marketing, and production to retain margins.</p><p class="MsoNormal" style="margin-bottom: 0in;"> </p><h3 style="margin-bottom: 0in; text-align: left;"><b><span style="font-size: 12pt; line-height: 107%;"><span style="color: #b45f06;">Minor headwinds contributed
to the mixed outcomes at premium wineries. </span></span></b></h3><p class="MsoNormal" style="margin-bottom: 0in;"></p><blockquote>
Direct-to-consumer volume sales were lower in 2023. Tasting room
visitation dropped for the second straight year leading to lower premium sales through nine months in 2023. However, strong 2023 holiday
sales should lead to positive growth in value at year-end. </blockquote><p></p><p class="MsoNormal" style="margin-bottom: 0in;">
<b><span style="font-size: 12pt; line-height: 107%;"><span style="color: #b45f06;">Consumer demand for the
total wine category continues to decline. </span></span></b></p><p class="MsoNormal" style="margin-bottom: 0in;"></p><blockquote>
As reported over the last several years, in addition to wine, U.S. consumers
have been drinking across categories such as ready-to-drink (RTD) options,
spirits, beer, and cannabis or have been abstaining altogether. </blockquote><p></p><h3 style="margin-bottom: 0in; text-align: left;"><b><span style="font-size: 12pt; line-height: 107%;"><span style="color: #b45f06;">There is an oversupply of
planted vineyards, given current sales volumes. </span></span></b></h3><p class="MsoNormal" style="margin-bottom: 0in;"></p><blockquote>
Conditions are ripe for overproduction, which may lead to inventory excess in
more price segments, discounting, and eventually price reductions. Pressure
starting from the grower will create inventory bulges and drive higher-than-needed
inventory turns in 2024. </blockquote><o:p></o:p><p></p><div class="OutlineElement Ltr SCXW64911752 BCX0" style="-webkit-tap-highlight-color: transparent; -webkit-user-drag: none; background-color: white; clear: both; cursor: text; direction: ltr; font-family: "Segoe UI", "Segoe UI Web", Arial, Verdana, sans-serif; font-size: 12px; margin: 0px; overflow: visible; padding: 0px; position: relative; user-select: text;"><p class="Paragraph SCXW64911752 BCX0" paraeid="{7ff741d5-0259-4cdb-a9ed-ec8077e232c6}{29}" paraid="1033954792" style="-webkit-tap-highlight-color: transparent; -webkit-user-drag: none; background-color: transparent; color: windowtext; font-kerning: none; margin: 0px 0px 10.6667px; overflow-wrap: break-word; padding: 0px; user-select: text; vertical-align: baseline; white-space-collapse: preserve;"><span class="EOP SCXW64911752 BCX0" data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}" face="Calibri, Calibri_EmbeddedFont, Calibri_MSFontService, sans-serif" style="-webkit-tap-highlight-color: transparent; -webkit-user-drag: none; font-size: 11pt; line-height: 19.425px; margin: 0px; padding: 0px; user-select: text;"></span></p></div>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.comNapa, CA, USA38.2975381 -122.2868659.9873042638211516 -157.443115 66.607771936178835 -87.130615tag:blogger.com,1999:blog-941731830705031230.post-50637695577333977492024-01-15T18:09:00.000-08:002024-01-16T11:41:43.181-08:00The 2024 SVB Wine Report will be released Thursday. Last chance to Sign up!<p><br /></p><p> <b style="text-align: center;"><span style="font-family: arial; font-size: medium;"> <a href="https://events.svb.com/stateofthewineindustry2024" target="_blank">Register here</a> for the videocast, replay, and copy of this year's report.</span></b></p><p><b style="text-align: center;"><span style="font-family: arial;"><br /></span></b></p><p style="text-align: center;"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgahe6fnnfvHREHUc-rFcXrUWi3VNJt6_9lBL-CtDlFyWhgAnr5u1vwRYnC6grYQmk3qLnTzPaXfzlJ5sfeaNmKErneXJ3pbZWyiAyeXO4Lsn_ynjVJ2iejFOxT2TV8k406zQaMdvHRiXAMH1itFotUYFZO3kJU9T-v98QrO5q2aCvQbSJSfC0ZNpxKdIo" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="1062" data-original-width="1600" height="265" src="https://blogger.googleusercontent.com/img/a/AVvXsEgahe6fnnfvHREHUc-rFcXrUWi3VNJt6_9lBL-CtDlFyWhgAnr5u1vwRYnC6grYQmk3qLnTzPaXfzlJ5sfeaNmKErneXJ3pbZWyiAyeXO4Lsn_ynjVJ2iejFOxT2TV8k406zQaMdvHRiXAMH1itFotUYFZO3kJU9T-v98QrO5q2aCvQbSJSfC0ZNpxKdIo=w400-h265" width="400" /></a></div><br /><br /><p></p><p><span style="font-family: arial;">In 1992, I wrote the original SVB Wine Division Business Plan in which I said,</span></p><p><span style="font-family: arial;"></span></p><blockquote><p><span style="font-family: arial;"><i>"U.S. table wine entered a seven-year period of declining volume in the late 80s. Industry observers attributed the decrease to changing consumer attitudes concerning alcohol consumption, health concerns, drunk driving issues, and overall changing tastes as consumers drank less but better wine."</i></span></p></blockquote><p><span style="font-family: arial;">Despite that gloomy soundbite, I got bank approval to start this first-of-its-kind focused wine division. Why create this business for the bank with all the gloominess? I believed and predicted the premium wine industry was about to take off, driven by the boomer generation.</span></p><p><span style="font-family: arial;">I did pretty well with that prediction.</span></p><p><span></span></p><a name='more'></a><p></p><p><span style="font-family: arial;">If you have been reading the wine industry news lately, you probably agree that much of it is rather dower. Some of the same things I noted in the original business plan in 1992 exist today in 2024.</span></p><p><span style="font-family: arial;">I've pointed out these issues many times in the past seven-plus years and have been met with people who say that the headwinds we face are just a cycle; all we need to do is wait a couple years, and everything will fix itself just like it did in 1994.</span></p><p><span style="font-family: arial;">That kind of thinking is the killer of innovation and adaptation. You don't fix a problem you can't acknowledge. The circumstances present in 1994 that led to the wine boom in the past 30 years aren't in evidence this time. If you are struggling today, waiting to adapt could make you a statistic. </span></p><p><span style="font-family: arial;">So, are we lost? Hardly. Success is available to anyone willing to adapt.</span></p><p><span style="font-family: arial;">Looking at the headline slide, which will be presented on Thursday, you can see a chart of wholesale alcohol sales, inventory volumes, and turns. It's hard to see, but inventory in May 2023 for total alcohol reached a high point of 1.71 times sales. Said succinctly, for every dollar of alcohol sold, an additional 71 cents were added to wholesale inventory stocks. It's important to note that it's total alcohol, not just wine. But we shouldn't let ourselves off the hook. Wine in wholesale is improving, but it is still overstocked. </span></p><p><span style="font-family: arial;"><b>This is such an important data point to grasp! </b>What does it portend for the future? That's the teaser. Sign up for the 2024 presentation of the SVB State of the Wine Industry Report, where we will answer that question and many more, hopefully giving you some ideas that help your wine company thrive in an otherwise difficult market.</span></p><p><span style="font-family: arial;">Please join me along with our panel of industry leaders: Jennifer Locke, CEO, Crimson Wine Group; Paul Mabray, Wine Industry Innovator; and Ed Thralls, SVP Professional Services, Enolytics, as we discuss our observations on the current business climate, offer our take on the evolution of the wine market and share insights on what is needed for continued success in the years to come. </span></p><p><br /></p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://events.svb.com/stateofthewineindustry2024" style="margin-left: 1em; margin-right: 1em;" target="_blank"><img border="0" data-original-height="89" data-original-width="364" height="78" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUbZxG6pkA5Xr-cAAFvgJBFZ_TIjUEs_T8Wp-nrg5svbjSydBPwzHgoCUF49GjwHPK3ILeURjwBEy2WOtoXWHUDirOxCvB3fG4QmEHwCjIDFsHVHT3a1UUl3KX2ubxtpjMCBVZ14TRfcu0jJJreTtd1er2WfLZT3BmYmVbZpQUq4eY9HjCF6cahO7j/w320-h78/Sign%20Up.png" width="320" /></a></div>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.comNapa, CA, USA38.2975381 -122.2868659.9873042638211516 -157.443115 66.607771936178835 -87.130615tag:blogger.com,1999:blog-941731830705031230.post-21930059282977945932023-10-01T13:38:00.004-07:002024-02-19T11:35:29.390-08:00I Need Your Help with the 2024 State of the Industry Survey<p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://svb.co1.qualtrics.com/jfe/form/SV_beFEHhfKsJyR5Xw?source=svb-on-wine-blog" style="margin-left: 1em; margin-right: 1em;" target="_blank"><img border="0" data-original-height="576" data-original-width="1024" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdokOyKdE_YpqeXzJJ_6RMLiRG842zlQ0ZZ1Ln81gsqlcoz4PVGmkR1AD2oQyhtj-jP3mHA9enCKAyAaVLfkOses-ChWqEUanB9mVb2yB91Kqx548qZBxOwPGTrk4NT3lg6wMIDHY7Lt5bjEKE0EiZsMP4m67z6QXiMOveNfoqIrXQDdSdQtwzdkX2kNw/w400-h225/2024%20SOTI-social-banner-1024x576.jpg" width="400" /></a></div><br />It's been quite a roller coaster ride over the past six months. The banking industry has undergone many changes; my bank was no exception. Given our specific challenges, I didn't think this day would come again. So, I'm happy to report that we are today launching the 23rd annual State of the Wine Industry Survey. It is <b><a href="https://svb.co1.qualtrics.com/jfe/form/SV_beFEHhfKsJyR5Xw?source=svb-on-wine-blog" target="_blank">open now through October 22</a>.</b><p></p><div><div><a href="https://www.svb.com/globalassets/trendsandinsights/reports/2024-report-soti-survey.pdf " target="_blank">The survey this year</a> has been streamlined and shortened. Given the current state of the business, I eliminated several less relevant questions and added a section on data management from which I hope to get a baseline of where we are in our data management and use practices. From the new questions, my goal is to compile a collection of helpful resources that survey participants can utilize to help navigate the current lull in consumption.</div><span><a name='more'></a></span><div><br /></div><div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjtE5T-ZZdIXXyKB1aku8jFFezS_usk1L4Q4IoTXgmU9TMlVk9zA0oU4rk9mJsoH7EisUAg94FhYzJBUKckdWAq2VMdFYBhQgW_fWO16KsXfCM182EYqX31FwuXMdinZfqB_7NV2IRDLcCCcOph3qQ4v0LmM2FajpxwI4bJSJp_9KYNb7v40O-zC7Fcwng/s720/Generic%20Cover%20Shot%20SOTI.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="720" data-original-width="561" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjtE5T-ZZdIXXyKB1aku8jFFezS_usk1L4Q4IoTXgmU9TMlVk9zA0oU4rk9mJsoH7EisUAg94FhYzJBUKckdWAq2VMdFYBhQgW_fWO16KsXfCM182EYqX31FwuXMdinZfqB_7NV2IRDLcCCcOph3qQ4v0LmM2FajpxwI4bJSJp_9KYNb7v40O-zC7Fcwng/w156-h200/Generic%20Cover%20Shot%20SOTI.jpg" width="156" /></a></div>Producing the annual SVB State of the Wine Industry Report requires that we receive at least 500 survey responses in just under three weeks to achieve statistical significance. </div><div><span style="color: #b45f06; font-weight: bold;"><br /></span></div><div><span style="color: #b45f06; font-weight: bold;">And this is where I need your help: </span>I need your participation in the survey and your willingness to partner with me to get this request out through your social media channels. Your participation is a vote for us to continue.</div><div><br /></div><div>Yes, I know everyone is busy, so it's easy to put this ask lower on your to-do list and hope someone else will provide the data. That has placed us close to dropping below minimum response levels as recently as last year. </div><div><br /></div><div><b>What's in it for you?</b> When you participate, you receive the complete set of anonymous survey results and analysis to help you plan for 2024, which includes dozens more charts than the abridged version we share broadly.</div><div> </div><div>I appreciate your support in helping our dynamic industry learn, evolve, grow, and prosper.</div></div></div><div><br /></div><div><b>Here is a link to the survey questions to prepare [<a href="https://www.svb.com/globalassets/trendsandinsights/reports/2024-report-soti-survey.pdf " target="_blank">LINK</a>]. </b></div><div><br /></div><div><span style="color: #990000;"><b>I've left the comments section open below if you have any questions</b>.</span> If you are ready to take the survey now, please click here:</div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://svb.co1.qualtrics.com/jfe/form/SV_beFEHhfKsJyR5Xw?source=svb-on-wine-blog" style="margin-left: 1em; margin-right: 1em;" target="_blank"><img border="0" data-original-height="54" data-original-width="173" height="54" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgoyT4ukJ6iPf-mDa-nHrJmkyt5Y8366ETZkS31yvYbazzkkfmMvg315X6EehTlw7hxUeIF4QLlSzV74m9PUqFejJuRp6J6hYTvIu7lS_b-tJlkUXm6ovhYl8XpeU2pj2-E2r1ik64p5FfTM3d3qucIOV58619-S5dY6TL_BPZrw0GMvAFFPMsOdrD8VM4/s1600/Take%20the%20Survey%20Temp.jpg" width="173" /></a></div><br /><div><br /></div><div><br /></div><div><br /></div>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.comNapa, CA, USA38.2975381 -122.2868659.9873042638211516 -157.443115 66.607771936178835 -87.130615tag:blogger.com,1999:blog-941731830705031230.post-34480555899100676942023-08-20T14:09:00.003-07:002023-08-21T08:02:48.373-07:002023 SVB DTC Video Replay, and DTC Report <p></p><div class="separator" style="clear: both; text-align: center;"><iframe allowfullscreen="" class="BLOG_video_class" height="266" src="https://www.youtube.com/embed/8Cx2nEdy1qc" width="486" youtube-src-id="8Cx2nEdy1qc"></iframe></div><br />The 2023 Videocast is in the books, and what a performance from some of the smartest people in the business who do DTC all day, everyday. Thank you! <p></p><p style="text-align: left;"></p><ul style="text-align: left;"><li><a href="https://www.linkedin.com/in/susan-dematei-8871a722/" target="_blank">Susan DeMatei,</a> President of Wine Glass Marketing, </li><li><a href="https://www.linkedin.com/in/andrewwalleck/" target="_blank">Andrew Walleck</a>, COO of Wine Access, </li><li><a href="https://www.linkedin.com/in/jessica-kogan-43a455/" target="_blank">Jessica Kogan</a>, Partner of Connect the Dots Collective.</li></ul>What a remarkable collection of talent. <div><br /></div><div>Each panelist shared openly about their views, offering incredible insights and ideas to help the industry and your winery move into the next decade of the business. Some of the highlights:<span><a name='more'></a></span><div><ul style="text-align: left;"><li style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; list-style-type: disc; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">We are approaching the end of the first DTC cycle that began with the Granholm decision, and a new cycle is set to begin.</span></li><li style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; list-style-type: disc; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">While tasting fees remain high, they can be used as an incentive to attract new consumers to the category.</span></li><li style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; list-style-type: disc; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">Email marketing will continue to be a part of the DTC trade for the next decade, but SMS text marketing is low-hanging fruit for improved engagement. </span></li><li style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; list-style-type: disc; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">The investment in, and emergence of digital marketing and decision-making will separate the winners from the losers in a lower-growth phase over the next ten years.</span></li><li style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; list-style-type: disc; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">Investment in the production side of the business is accepted, but success will require investment in digital information, systems, and process.</span></li><li style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; list-style-type: disc; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">By-appointment tastings are growing, which can help with data gathering and consequently club growth. </span></li><li style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; list-style-type: disc; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">In addition to the tasting room, the industry continues to look outside of the tasting room to add members to the club and develop new sources of revenue.</span></li><li style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; list-style-type: disc; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">By 2025, there will be 150M customers buying groceries online. Is that a trend the industry can leverage and develop?</span></li><li style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; list-style-type: disc; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">Investment in Customer Development Platforms is something to consider, as the costs of acquiring new customers are dramatically lower digitally than through the tasting room.</span></li><li style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; list-style-type: disc; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">We learned from COVID that if you are using other means besides the tasting room to gather clients, data, and revenue, a drop in tasting room visitation isn't as painful.</span></li><li style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; list-style-type: disc; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">Gifting subscriptions to heirs is becoming a new trend that can extend the lifetime value of a customer's family</span></li><li style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; list-style-type: disc; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">Tips are becoming more accepted in the industry, with almost 70% of wineries now allowing them.</span></li><li style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; list-style-type: disc; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">Shipping charges are moving from free shipping, back to discounted shipping.</span></li><li style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; list-style-type: disc; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">Urban tasting rooms are finding their footing as valuable sources for new consumers and consumer data.</span></li><li style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; list-style-type: disc; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">Wineries need to consider taking frictionless payment-free methods for payment, such as Google Pay, PayPal, Venmo, etc.</span></li><li style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; list-style-type: disc; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">When considering discounts, we should understand what club members value. Perhaps they may see more value in special skus, unique access to the winery, and being known as a club member with every contact whether digital or physical. </span></li><li style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; list-style-type: disc; margin-bottom: 0pt; margin-top: 0pt;">Predictive analytics are the next phase to increase the lifetime value of club members. For instance, if a customer hasn't opened the last five emails, it could predict their declining interest.</li></ul><p></p><p style="text-align: left;">For those looking for the the <a href="https://www.svb.com/globalassets/library/uploadedfiles/wine/2023-direct-to-consumer-wine-report.pdf" target="_blank">2023 SVB Direct to Consumer Report</a>, you can find that in the hyperlink in PDF format. </p><p style="text-align: left;">For questions on the report, feel free to contact me at rmcmillan@svb.com.</p><p style="text-align: left;"><br /></p></div></div>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.comNapa, CA, USA38.2975381 -122.2868659.9873042638211516 -157.443115 66.607771936178835 -87.130615tag:blogger.com,1999:blog-941731830705031230.post-56104800572045710002023-08-06T15:10:00.004-07:002023-10-02T09:47:01.364-07:00Sign Up for the 2023 SVB Direct to Consumer Report Release & Videocast<p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjigTheAYee5Dmu3c2g_clfO1fD1IqgwSjzrQA3XSD7oWXduXLG9Mis6W8lHnG2d1Gjt4l977d4p0mUinoITysDhlI1vnvwpEe9Kiz1UA-0wxqW141zoUpF26v56Z4DpkT_OWqn5j3s8mOAYv8NsqAfFigLgJxxKw0oCpqj_xl2H6RqRG5M86RLQpVSNAc/s1909/DTC%202023%20Cover.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1080" data-original-width="1909" height="226" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjigTheAYee5Dmu3c2g_clfO1fD1IqgwSjzrQA3XSD7oWXduXLG9Mis6W8lHnG2d1Gjt4l977d4p0mUinoITysDhlI1vnvwpEe9Kiz1UA-0wxqW141zoUpF26v56Z4DpkT_OWqn5j3s8mOAYv8NsqAfFigLgJxxKw0oCpqj_xl2H6RqRG5M86RLQpVSNAc/w400-h226/DTC%202023%20Cover.png" width="400" /></a></div><br /><h3 style="text-align: left;"><span style="color: #b45f06;"><span> Much better than some might think!</span></span></h3><div><br /></div><div>Wineries selling in the premium and direct to consumer sector have experienced positive outcomes. Looking back over the past three years: </div><div><ul style="text-align: left;"><li>2020 was the toughest year for direct sales in the last ten years due to the COVID-19 pandemic. The closure of tasting rooms and restaurants made it difficult to sell premium wine. I'm glad we're past that whole mess! </li></ul><ul style="text-align: left;"><li>2021 was a huge rebound year for wineries selling direct. The rollout of vaccinations, reopening, and the early stages of travel normalization improved the market opportunity. Hospitality as a whole had a very good 2021 as you probably noticed with hotel prices soaring during the year.</li></ul><ul style="text-align: left;"><li>Compared to the best year of the decade, 2022 may not have been as good, but for those who sell DTC, business was still quite successful. By the end of 2022, the Peer Group Financial Database of Silicon Valley Bank reported that the premium segment had a sales growth of 13.8%, and three-quarters of wineries in that segment saw an increase in revenue.</li></ul><ul style="text-align: left;"><li>Narrowing down to the DTC channel, tasting room purchases increased in most wine regions. The wine club also accounted for a larger portion of sales for the average winery. Additionally, wineries producing under 5,000 cases reported that their direct-to-consumer sales continued to grow and now make up 81% of total sales. The average bottle price also saw growth, and most regions reported an increase in volume. This is especially noteworthy for the west coast, which experienced three consecutive years of light red wine yields.</li></ul><h3 style="text-align: left;"><span><span style="color: #b45f06;"> <span><a name='more'></a></span> There is More to Discuss</span></span></h3><div><div><br /></div><div>Silicon Valley Bank will be releasing it's 12th Annual DTC Survey Results: Report, and Benchmarks on Wednesday, August 16th at 9:00AM PDT. That report release will take place live via a Zoom webcast. </div><div><br /></div><div><a href="https://events.svb.com/2023svbannualdtcreportvirtualevent/Rob"><b>RSVP today</b></a> to receive priority access to the links to the live event, the 2023 Direct-to-Consumer Wine Survey Report, and the on-demand event replay. </div><div> </div><div>This year's panel will feature: </div><div><ul style="text-align: left;"><li>Rob McMillan – EVP & Founder, Silicon Valley Bank Wine Division</li><li>Jessica Kogan – Chief Growth and Experience Officer at Vintage Wine Estates </li><li>Andrew Walleck – Chief Operating Officer at Wine Access, Inc.</li><li>Susan DeMatei – President/Founder of WineGlass Marketing</li></ul></div><div><b>REGISTER TODAY</b> to join us for this highly anticipated virtual gathering.</div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://events.svb.com/2023svbannualdtcreportvirtualevent/Rob" style="margin-left: 1em; margin-right: 1em;" target="_blank"><img alt="Sign Up" border="0" data-original-height="89" data-original-width="364" height="59" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiojXRBZnrqK7ieixSID57WKpH2ukNfAcUPs38GfcxzmkViyyq2Jt99g31sAivRGNmC1_5hvaDdoAxOZS1Lf2W1maS0nP-TN_-J5aM0sjw9b3Cb6XPtZD-qxN0fBdMx9aeKjH-enIKljPjg8AKD_VRvBJiSqPIimfPC__pfl1KHfJmJupiuUVkbJfSLlnc/w243-h59/Sign%20Up.png" title="https://events.svb.com/2023svbannualdtcreportvirtualevent/Rob" width="243" /></a></div><div><br /></div></div></div>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.comNapa, CA, USA38.2975381 -122.2868659.9873042638211516 -157.443115 66.607771936178835 -87.130615tag:blogger.com,1999:blog-941731830705031230.post-1219419831862484532023-06-17T17:51:00.015-07:002023-07-09T15:50:13.849-07:00What's the next business issue facing the wine industry?<p></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgxY-Jd9uy9EXn2knq6HIjspQW6Yyjw38KMtiB2kdYFmgDlulqz7JbZuTSMZ3XmZUnBxbRQcXCYzydwIBq_Jf1zFNNu4l0EG-3mAzRZje7YZL0_bZn0UXc0J7r0-11U4OwT4uxjRIokOhQxN2lQ5bh3BKl-5ys2qmC0PLIeZ_0jKdnN8vQeyRXF9DXK/s4000/20230611_055007.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="3000" data-original-width="4000" height="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgxY-Jd9uy9EXn2knq6HIjspQW6Yyjw38KMtiB2kdYFmgDlulqz7JbZuTSMZ3XmZUnBxbRQcXCYzydwIBq_Jf1zFNNu4l0EG-3mAzRZje7YZL0_bZn0UXc0J7r0-11U4OwT4uxjRIokOhQxN2lQ5bh3BKl-5ys2qmC0PLIeZ_0jKdnN8vQeyRXF9DXK/w400-h300/20230611_055007.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Rabbit Island Sunset, Hawaii</td></tr></tbody></table><p class="MsoNormal">I enjoy looking at vacation photos, especially now that
COVID is no longer a problem. I’m presently taking a much-needed vacation where
I’m spending time admiring the stunning Waimanalo sunsets on the island of
Oahu. While I don't post many pictures on social media when I travel to Hawaii, or on cruise vacations I do enjoy learning about the history of an area and
sharing it.<o:p></o:p></p>
<p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEih1tNd6UB-Aao-g79t16LHyGz9FuRauLiGbtFfc1toTmxXnElwEF_0v7fpa_v2rD_UKyDGaNYg46R3qWc8yJHx3fD1HoDw6o2OGWgpHTjeiMQyUP_833RHHvTtlzErYu7lR6TOHD-rufmYgNx-H5vrsifgk11HIGGHJNnWDOVNDmEaU8NZJkWfd2Ix/s2016/20190918_125826.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="2016" data-original-width="1512" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEih1tNd6UB-Aao-g79t16LHyGz9FuRauLiGbtFfc1toTmxXnElwEF_0v7fpa_v2rD_UKyDGaNYg46R3qWc8yJHx3fD1HoDw6o2OGWgpHTjeiMQyUP_833RHHvTtlzErYu7lR6TOHD-rufmYgNx-H5vrsifgk11HIGGHJNnWDOVNDmEaU8NZJkWfd2Ix/w150-h200/20190918_125826.jpg" width="150" /></a></div>As I sit here with my
curious green friend, gazing at Rabbit Island in the distance, my thoughts turn
to the US Wine Business and its future. Some might find this a strange topic to
ponder while relaxing in Hawaii and I would unfortunately have to agree. But this is what I enjoy.<o:p></o:p><p></p>
<p class="MsoNormal">Many people believe that the wine industry is cyclical, and
while true particularly in grape growing, there are also distinct periods in the industry that
are characterized by unique events that don’t repeat themselves and shape the
industry. Those eras typically last from seven to 10-years.<o:p></o:p></p>
<p class="MsoNormal"><span style="color: #b45f06;"><b>THE LAST GENERATIONAL CHANGE</b></span></p><p class="MsoNormal"><span></span></p><a name='more'></a>During the 1970s, there
was a growing interest in premium wine. It was the start of consumer evolution
from the WWII era consumers who preferred beer, jug wine, and cocktail parties,
to boomers who were making their own alcohol discoveries with wine coolers, which pointed the generation toward premium wine.<p></p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqJUHVxChvGeN5XT7hvASbZkwrab4nlACmcFu6uH7hcHM0pCu-fCSUnYuzegLq3yX_AITBRjrlw5rnmy2n3YqsleYS9c_9Fu2lPfGvmlAdMurs_efwBj-WyBflOwCGF7CeEaDoU55zO1dAKc6u-Vn-MfA0_MWMmEyAPqnOeruq5OJ9rzlfnBXYuD7P/s1188/ruffino-fiasco-ad.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="1188" data-original-width="500" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqJUHVxChvGeN5XT7hvASbZkwrab4nlACmcFu6uH7hcHM0pCu-fCSUnYuzegLq3yX_AITBRjrlw5rnmy2n3YqsleYS9c_9Fu2lPfGvmlAdMurs_efwBj-WyBflOwCGF7CeEaDoU55zO1dAKc6u-Vn-MfA0_MWMmEyAPqnOeruq5OJ9rzlfnBXYuD7P/w84-h200/ruffino-fiasco-ad.jpg" width="84" /></a></div>During the 1980s, the United States dealt with high interest
rates and inflation, resulting in a strong dollar. Imported wines such as
Mateus, Lancers, Blue Nun, and Reunite benefited from the dollar strength and grew
in popularity in the US. <o:p></o:p><p></p>
<p class="MsoNormal"><b><span style="color: #b45f06;">THE LARGEST POSITIVE CHANGE WAS DUE TO PURE LUCK</span></b></p><p class="MsoNormal">Of greater concern in the 80s was the significant challenge
posed by the anti-alcohol movement, which led to a decrease in demand. The
trend reversed in the mid-90s due to a strong economy but more importantly, the
emergence of the French Paradox and the Mediterranean Diet, and Arthur
Klatsky's research on the J-shaped curve. These studies each suggested that
moderate wine consumption had health benefits. </p>
<p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5LgJLkmeq1OrW1nusC3Xxk6pTCb--wftXxs_3uh_datwyjhHDySxuCBiPNCW4Kf8_u1Jd1U28FhAulavWVoTT0ZkpXWfFp_Kg-Wlr7bbCkd9qegN8DF_d6TksdVmCN0NKEFWNDkMyGVHlrVVrhzuN59Vf_ExdLjxfRLwbLlk2I5RRyfyXZisAiXB6/s600/the%20french%20paradox.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="448" data-original-width="600" height="149" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5LgJLkmeq1OrW1nusC3Xxk6pTCb--wftXxs_3uh_datwyjhHDySxuCBiPNCW4Kf8_u1Jd1U28FhAulavWVoTT0ZkpXWfFp_Kg-Wlr7bbCkd9qegN8DF_d6TksdVmCN0NKEFWNDkMyGVHlrVVrhzuN59Vf_ExdLjxfRLwbLlk2I5RRyfyXZisAiXB6/w200-h149/the%20french%20paradox.jpg" width="200" /></a></div>In 1994, the demand for premium wine saw a sharp rise,
driven by the belief in the science supporting moderate consumption. The
anti-alcohol movement took a temporary backseat, premiumization became a thing,
and winemaking became the dominant industry issue. If you made good wine, it almost
sold itself. <b>This golden era lasted about seven years,</b> during which time
the number of wine producers mushroomed in the US.<o:p></o:p><p></p>
<p class="MsoNormal">The end of the 90s boom came quickly with the Tech Recession
and 9/11. Distributors also concluded they couldn’t sell wine from all of the
new producers who had started during the period and began moving away from
smaller wineries. With supply and demand in balance in the early 2000s, the
main competitive issue shifted from "Can you make good wine?" to
"Can you sell your wine?"<o:p></o:p></p><p class="MsoNormal"><b><span style="color: #b45f06;">THE BUSINESS GOT TOUGHER</span></b></p>
<p class="MsoNormal"><b>That period lasted about seven years,</b> while the
premium industry tried to process the depth of the shift in approach by the
distributors. Wineries started to develop new direct sales strategies. It was
an uncomfortable time, but we caught a real break when Free the Grapes helped
push a favorable ruling in Granholm v. Heald through the US Supreme Court,
allowing for the opportunity to ship wine direct to all states. <o:p></o:p></p>
<p class="MsoNormal"><b></b></p><div class="separator" style="clear: both; text-align: center;"><b><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSeASNyiTJKwfXLs5bK0rtGWqtkPXXbMhp7fbnBRKeiyJIfdfh_jpdH84WRs2xugGjHLkSJTFNFSiRdSJtm-pxl8oP4EsFH_quOtHPluVyHXk-oB4TrbzQfZMqzSxFp5YeK61BJjhswIJcck4qMCXsVHp1G0X1WEKrpTglbAIB1Xqa9MLfyb8N29mh/s5968/matthieu-joannon-ZvqoxOrIiYI-unsplash.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="5968" data-original-width="3979" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSeASNyiTJKwfXLs5bK0rtGWqtkPXXbMhp7fbnBRKeiyJIfdfh_jpdH84WRs2xugGjHLkSJTFNFSiRdSJtm-pxl8oP4EsFH_quOtHPluVyHXk-oB4TrbzQfZMqzSxFp5YeK61BJjhswIJcck4qMCXsVHp1G0X1WEKrpTglbAIB1Xqa9MLfyb8N29mh/w133-h200/matthieu-joannon-ZvqoxOrIiYI-unsplash.jpg" width="133" /></a></b></div><b>That phase ended after the 2008 recession</b>, with the
premium industry fully adopting the direct-to-consumer approach. The dominant
issue had shifted again from “Can you sell wine” to “Can you sell wine direct.”
<b>The introductory phase of direct sales continued for about eight years</b> when
the industry started to deal with slowing sales growth. <o:p></o:p><p></p>
<p class="MsoNormal">The new dominant competitive issue has once again changed,
now to the quality of management. There are still many paths to success, but it
is dependent on the management team’s ability identify and to execute a plan. With
industry sales volumes now in decline, we are starting to see winners and losers.
<b>Seven years into the most recent industry change, we find ourselves due for
another shift in the competitive issue.</b><o:p></o:p></p><p class="MsoNormal"><b><span style="color: #b45f06;">WHAT COMES NEXT?</span></b></p>
<p class="MsoNormal">What will the factors be that create success in the next
decade? It might be an improved opportunity for even modest-sized wineries to
utilize data and find actionable strategies. Maybe we will see wineries crack
the code of selling directly into more states without asking the consumer to
come to your tasting room first. Or maybe the industry will decide to combine
forces with interested parties to advertise the category?<o:p></o:p></p>
<p class="MsoNormal">We mentioned several forces that have changed the industry
over the past 50 years that aren’t cyclical. But we are at a period of time that
is an echo of the 70s and 80s with the rotation of new consumers into their prime buying
years and the exit of the prior cohort. We are also once again dealing with messages - often times biased science, from the anti-alcohol coalition. It’s unlikely we’ll
luck out with the French Paradox part deux this time. <o:p></o:p></p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUH2n35dZ0r5akDE442skVYNyadDPji0S6aWYOMKGeM0zI_gsGyJapBCs8JItOI9RJQgqNCQnzFhwI6fBJ8iR0qBpr3Ww86KDH74cIvYZv2zd8BRKhFbla7oxXgX1LVgUfnXx2oU53iYE/s536/Page+Break.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="94" data-original-width="536" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUH2n35dZ0r5akDE442skVYNyadDPji0S6aWYOMKGeM0zI_gsGyJapBCs8JItOI9RJQgqNCQnzFhwI6fBJ8iR0qBpr3Ww86KDH74cIvYZv2zd8BRKhFbla7oxXgX1LVgUfnXx2oU53iYE/s320/Page+Break.png" width="320" /></a></div><div style="text-align: center;"><br /></div><div><h3 style="clear: both; font-family: "times new roman";"><span style="color: #b45f06; font-size: large;">What's Your Opinion?</span></h3><ul><li><b style="color: #38761d; font-family: "times new roman";">What are your expectations for the next decade in the wine business?</b></li><li><b style="color: #38761d; font-family: "times new roman";">What events will shape the business?</b></li><li><span style="color: #38761d; font-family: times new roman;"><b>Do you see something coming that will spur consumer demand for wine, like the French Paradox?</b></span></li></ul><b style="color: #38761d; font-family: "times new roman";">Please join this site on the top right-hand side of the page, and offer your thoughts below. I respond to everyone.</b><br /><div abp="2638" class="separator" style="clear: both; font-family: "times new roman";"><span style="color: #38761d;"></span></div></div><p class="MsoNormal"><b style="font-family: "times new roman";"><span abp="1488" style="color: #990000;"><span abp="931" style="color: #38761d;"><u abp="3162"><span abp="1016">Please share this post on your favorite social media platform.</span></u></span></span></b> <o:p></o:p></p><br /><p></p>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.com5Waimānalo, HI 96795, USA21.3490045 -157.7157309-6.961229336178846 167.1280191 49.659238336178845 -122.55948090000001tag:blogger.com,1999:blog-941731830705031230.post-76863259217631004072023-05-25T13:38:00.018-07:002023-05-26T09:44:34.546-07:00Layoffs in Wine Country<p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiz2ZmgkpoPsCmvnYXejdm7B_cJb5yoDKMTlifhROaWIC7VAAa30Kp2T21unWZMOoTBjCkwKPp9QQ_lH3unV7OMMoVOs8FTfwBDAsnSh2MAvpz-vDv4Xkl60RazIW2n6OVn2Q7MvBf_eWbDlwy6WyVzU6oN4BWIr2uHehss1gs3grcSi60S6EteD66o/s6720/taylor-deas-melesh-fkaQ-cqU4Uo-unsplash.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="4480" data-original-width="6720" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiz2ZmgkpoPsCmvnYXejdm7B_cJb5yoDKMTlifhROaWIC7VAAa30Kp2T21unWZMOoTBjCkwKPp9QQ_lH3unV7OMMoVOs8FTfwBDAsnSh2MAvpz-vDv4Xkl60RazIW2n6OVn2Q7MvBf_eWbDlwy6WyVzU6oN4BWIr2uHehss1gs3grcSi60S6EteD66o/w400-h266/taylor-deas-melesh-fkaQ-cqU4Uo-unsplash.jpg" width="400" /></a></div><br />Following the takeover of Silicon Valley Bank by the FDIC on March 10th, I found myself needing to take a break from watching the news for several weeks. Our company had become the main subject of every news outlet, and unfortunately, it was for all the wrong reasons. The constant coverage of the "ugly news" was difficult and painful to endure. The experience only added to the already stressful situation for both employees and clients.<p style="text-align: left;">Now that things are back to normal in the wine division, we're happy to get a break from all the ugly news updates. It is starting to feel like we're settling into a new routine, but nothing lasts forever.</p><span><a name='more'></a></span><p style="text-align: left;">Wednesday, <a href="https://ca.movies.yahoo.com/raleigh-first-citizens-bank-cut-182920287.html">SVB announced that we were laying off</a> 3% of the bank's workforce. That made my phone ring again from both friends and clients - <b><span style="color: #3d85c6;"><i>How are you doing? Are you still employed? Did the wine division have any job cuts?</i></span></b></p><p><b><span style="color: #3d85c6;">The answers are: <i>great, yes, and no.</i> </span></b></p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgrBl3eqsBz-UFJKSqOdYp186KFrwAETFoa6CiEmIpLDbDaulz5lDip8kueZl6fCxTKFVUkX3LAwQwv3EqKgwsgPvz8o86jIz6AtG-ddFde6ZAIdEQ3CBTUAlhpo0Y_tQko6JyBrvg2r4ZbW25JYCcL5GEh4dVgRQTd1DjO26yOdO77E69KLK0_GFKe/s6000/tim-van-der-kuip-CPs2X8JYmS8-unsplash.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="4000" data-original-width="6000" height="133" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgrBl3eqsBz-UFJKSqOdYp186KFrwAETFoa6CiEmIpLDbDaulz5lDip8kueZl6fCxTKFVUkX3LAwQwv3EqKgwsgPvz8o86jIz6AtG-ddFde6ZAIdEQ3CBTUAlhpo0Y_tQko6JyBrvg2r4ZbW25JYCcL5GEh4dVgRQTd1DjO26yOdO77E69KLK0_GFKe/w200-h133/tim-van-der-kuip-CPs2X8JYmS8-unsplash.jpg" width="200" /></a></div>Our wine division <b><i><u>has not</u></i></b> been impacted by the recent staff changes. I assure you that our team remains unchanged, working hard, and committed to providing exceptional banking to the premium wine community.<p></p><p>It is a common practice to review roles during an acquisition to avoid redundancies, so it was hardly a surprise to us. But it is still never easy to say goodbye to colleagues.</p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjW5Pk86yHn0Ji_fQgqVj1fqCbRMSD-ufLkMyry8ulJP_cTp8aziiEPx0ipWV4-xhVAYaPWda-i_bn0j_atQck_XTTwzcTxdv14y_-2QH9V_AcPNaYKnsSzCoH9IauTXmoFxH4ux7e_tAkkdPlSTW-LcmF8V6QTd7ZV_KZo2Bi4qUM-99JWhvqWCGep/s3727/luis-cortes-DRL63jJ0L2Y-unsplash.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="3727" data-original-width="2485" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjW5Pk86yHn0Ji_fQgqVj1fqCbRMSD-ufLkMyry8ulJP_cTp8aziiEPx0ipWV4-xhVAYaPWda-i_bn0j_atQck_XTTwzcTxdv14y_-2QH9V_AcPNaYKnsSzCoH9IauTXmoFxH4ux7e_tAkkdPlSTW-LcmF8V6QTd7ZV_KZo2Bi4qUM-99JWhvqWCGep/w133-h200/luis-cortes-DRL63jJ0L2Y-unsplash.jpg" width="133" /></a></div>First Citizens Bank does not have a wine practice though, which means there were no redundancies. The elimination of jobs was done to support functions that were either unnecessary in the new organization or duplicated elsewhere.<p></p><p>I'm happy to share that the SVB wine division is alive and well. Despite the bank's crisis in March, we have successfully retained all of our employees and borrowing clients. In fact, we're currently experiencing a period of above-average growth, which may seem counter-intuitive, but it's a fact.</p><p>Stay tuned for further adventures - adventures NOT in the ugly news category!</p><p><br /></p>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-82274172960094306762023-05-14T21:15:00.016-07:002023-05-15T14:19:31.082-07:00Will there be a Silicon Valley Bank DTC Report this year? It's looking doubtful.<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_MLUssW9Yb9y3H4N4t_uyQUGCDGpupn3ao1BFxnVrG2J71BUQ9RvdDT1AZZfD9cLVggB92lKICTh4fmtlcBwSAKZBVIbQzqndXUFD_aqqPmjii9T85wWYtiNX2DAgoweXz6zcM4Nv4SC9m7plJ62_u0um--D2l8RUNY2uqJFRWALY19tIxNujHRSx/s3888/simon-berger-jCo9Wv14Q1w-unsplash.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="3888" data-original-width="3888" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_MLUssW9Yb9y3H4N4t_uyQUGCDGpupn3ao1BFxnVrG2J71BUQ9RvdDT1AZZfD9cLVggB92lKICTh4fmtlcBwSAKZBVIbQzqndXUFD_aqqPmjii9T85wWYtiNX2DAgoweXz6zcM4Nv4SC9m7plJ62_u0um--D2l8RUNY2uqJFRWALY19tIxNujHRSx/s320/simon-berger-jCo9Wv14Q1w-unsplash.jpg" width="320" /></a></div><p style="text-align: left;">Without greater participation this last week, there will be no SVB Direct to Consumer Report produced this year.</p><p style="text-align: left;"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi6YDzkln40TkoUDr0Jp6o4z2RjwUiQloGHITAHPGATpLHEdgMqeSe61LkXYbvWVOulXyCFurC7ml74alHSm_xln_XLw0aOs3taL44gy-cOna1pD15Oizp6e2v-q3AnWuaIypydPE4UbhCXRrE0o9aQR1C5_XZtN2B9plx6kBTrGYlg724ayl8vr9yJ/s3368/age-barros-rBPOfVqROzY-unsplash.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="2246" data-original-width="3368" height="133" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi6YDzkln40TkoUDr0Jp6o4z2RjwUiQloGHITAHPGATpLHEdgMqeSe61LkXYbvWVOulXyCFurC7ml74alHSm_xln_XLw0aOs3taL44gy-cOna1pD15Oizp6e2v-q3AnWuaIypydPE4UbhCXRrE0o9aQR1C5_XZtN2B9plx6kBTrGYlg724ayl8vr9yJ/w200-h133/age-barros-rBPOfVqROzY-unsplash.jpg" width="200" /></a></div>It's always difficult to get survey participants. This year the effort had a higher degree of difficulty because the bank failed. I'm sure you heard that news. <p></p><p style="text-align: left;">Three weeks later though, we were purchased by First Citizens Bank, and we are today operating as Silicon Valley Bank, a division of First Citizens Bank. </p><p style="text-align: left;">During that dark period when we were being run by the FDIC, we literally had hundreds of people encouraging us to find a way to continue producing the gratis information we've done for more than 20 years. Because of that encouragement, with the ownership question behind, we decided to produce the Direct to Consumer survey and report, a month later than usual.<b><u> It was the industry encouragement that was the deciding factor. <span></span></u></b></p><a name='more'></a><p></p><p style="text-align: left;"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi6GUGfZgOf9o2COUduhhHv2vfhqoyyji5vc3MOa1sQVfessy4EyvPkU0RJJuIIN1yQBDUV4QsY7uMQErsITfp_SY5Y-xC15ERckrgMSahj8ybyecBCFsFK2YkhmEixKgy-jgcHdUzfQJhAExRSvk41PO6TBn9Yv-EDGQEfvsRUf8xR4gvmlUQFDXQM/s5472/dayne-topkin-xdx5hIHGt4A-unsplash.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="3648" data-original-width="5472" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi6GUGfZgOf9o2COUduhhHv2vfhqoyyji5vc3MOa1sQVfessy4EyvPkU0RJJuIIN1yQBDUV4QsY7uMQErsITfp_SY5Y-xC15ERckrgMSahj8ybyecBCFsFK2YkhmEixKgy-jgcHdUzfQJhAExRSvk41PO6TBn9Yv-EDGQEfvsRUf8xR4gvmlUQFDXQM/s320/dayne-topkin-xdx5hIHGt4A-unsplash.jpg" width="320" /></a></div>For those who may be unaware, [<a href="https://www.svb.com/trends-insights/reports/dtc-wine-survey-report-2022" target="_blank">here is the information produced last year</a>.] <p></p><p><b><span style="color: #990000;">Sadly, as of Sunday evening with the survey open for nineteen days already, <u>we only have 185 total survey responses. We need closer to 600 to provide good industry analysis.</u></span></b></p><p style="text-align: center;"><b>~~~00~~~</b></p><p><span style="font-size: large;">The Annual Direct to Consumer Survey will close this next weekend on Sunday May 22nd. If we have insufficient responses which appears likely, <b>we won't be able to produce a report this year.</b></span></p><p><span style="font-size: medium;"><b><span style="color: #b45f06;">If you would like to reverse that outcome</span></b> and receive the metrics and analysis we've always provided, and support all those in the wine business, academia, and the investment community who use this information, <b>PLEASE </b><a href="https://svb.co1.qualtrics.com/jfe/form/SV_72mTyc6N6XFUbUa?source=Rob">take the survey</a> and encourage your social media contacts to do the same.</span></p><p><span style="font-size: medium;">Here is the [<a href="https://www.svb.com/globalassets/library/uploadedfiles/svb-direct-to-consumer-wine-survey-2023.pdf" target="_blank">LINK</a>] to the questions, and here is the [<a href="https://svb.co1.qualtrics.com/jfe/form/SV_72mTyc6N6XFUbUa?source=Rob" target="_blank">LINK</a>] to the survey.</span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjCruhBgKxhUrBXwnJ-qHogC_KNOlh0n3ZwgGXCbdJ2sODbxlkaXWd_e0KhMH45FYl1t6vR-G7LjL2WHxB8xLmnqLpbrQNB_9ssE0YVtG2hbsCJ39pPiR-H9K5JcW5AssTTBpUg5t-pX3d9JjAwCl3tIadVt8sGpvReRyi6uYAsbIXMk7cj1fKEFj1E/s258/SVB%20a%20division%20of%20FCB.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="203" data-original-width="258" height="157" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjCruhBgKxhUrBXwnJ-qHogC_KNOlh0n3ZwgGXCbdJ2sODbxlkaXWd_e0KhMH45FYl1t6vR-G7LjL2WHxB8xLmnqLpbrQNB_9ssE0YVtG2hbsCJ39pPiR-H9K5JcW5AssTTBpUg5t-pX3d9JjAwCl3tIadVt8sGpvReRyi6uYAsbIXMk7cj1fKEFj1E/w200-h157/SVB%20a%20division%20of%20FCB.png" width="200" /></a></div><p><br /></p>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-57593919080214886422023-05-07T19:30:00.014-07:002023-05-10T11:47:35.161-07:00The SVB 2023 Direct to Consumer Wine Survey is Open!<p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2aVNCyO1ahHKRU8wctVPbW_-OjPvvRUk4Cb7p3So77otfOFItUxhvNfvJTXYijZ0MtntvIQMggvpMD6tBQSRjZCPcspwWDHTOjXX9esnAGNb64JiQsAIQYpf3O8vOtbCmZZUUKB95u3dS4JA5F0kUSztUAXP5vQWlO4IQYOh7rb-T8CO1tE3fB6-c/s4864/qinghill-x8MZ2MoEKLE-unsplash.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="4864" data-original-width="3648" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2aVNCyO1ahHKRU8wctVPbW_-OjPvvRUk4Cb7p3So77otfOFItUxhvNfvJTXYijZ0MtntvIQMggvpMD6tBQSRjZCPcspwWDHTOjXX9esnAGNb64JiQsAIQYpf3O8vOtbCmZZUUKB95u3dS4JA5F0kUSztUAXP5vQWlO4IQYOh7rb-T8CO1tE3fB6-c/s320/qinghill-x8MZ2MoEKLE-unsplash.jpg" width="240" /></a></div>For those following closely, you will notice that I've changed the headline slide back from Rob McMillan on Wine, to the prior blog title of, SVB on Wine.<p></p><p></p><p>For most, hopefully it's obvious why I've done that. But for those who haven't followed the rollercoaster, SVB was taken over by the FDIC on March 10th. That was the end of the old SVB. </p><p>But after a couple failed auctions, most of the legacy bank's assets were sold to First Citizens Bank, who decided to run the acquired bank as a division, and retain the name of Silicon Valley Bank. So we died and have been reborn! </p><span><a name='more'></a></span><p><b>We have come full-circle. SVB's Wine Division has all the same employees doing the same jobs, and more clients than when we started. That's an amazing feat!</b></p><p>There is another thing that is back to normal, and that is that the <b><span style="color: #3d85c6;">Annual SVB Direct to Consumer Survey is OPEN</span>.</b> </p><p>The survey is closing in on 15 years now, providing a dramatic history of the changing US Wine market during that time. It's a trended history we'd like to continue for the industry and academia.</p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhGnjNmXFR_j8cZXa4fpEfGTR3jDjLehiMYiClewttgElWiXQzaxjWILzNkznImj0JZhRxUkEiUWj-lE94L1-Uo6GVfCql3OlwfIjGb-Mm774wMP8WTepHteqpH-DkcZlwGUWnfjDsI1uFZUkXHLjw5aggyI1RqSorbC9R_3ews5v20xCGB21KmdkYc/s186/Participation%202023.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="185" data-original-width="186" height="185" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhGnjNmXFR_j8cZXa4fpEfGTR3jDjLehiMYiClewttgElWiXQzaxjWILzNkznImj0JZhRxUkEiUWj-lE94L1-Uo6GVfCql3OlwfIjGb-Mm774wMP8WTepHteqpH-DkcZlwGUWnfjDsI1uFZUkXHLjw5aggyI1RqSorbC9R_3ews5v20xCGB21KmdkYc/s1600/Participation%202023.png" width="186" /></a></div><div class="separator" style="clear: both; text-align: center;"><br /></div><p></p><div style="clear: both;"><h3><span style="color: #b45f06;"><u>The 2023 Direct to Consumer Survey is Open!</u></span></h3><div><br /></div><div>Another thing that is back to normal is the need for greater participation.<span style="color: #3d85c6;"><b> <a href="https://eml.svb.com/NjEwLUtBSy0yNjYAAAGLRCm6RKaPAzRUCHrEyZ056UcYuSHQ9DsH232lrJQu9tvo2io-ACjrmtk4mxfYZ7SA2dzNDRA=" target="_blank">The survey closes May 19th and as of today (March 7th) after almost 2 weeks, we only have 120 participants</a></b><a href="https://eml.svb.com/NjEwLUtBSy0yNjYAAAGLRCm6RKaPAzRUCHrEyZ056UcYuSHQ9DsH232lrJQu9tvo2io-ACjrmtk4mxfYZ7SA2dzNDRA=" target="_blank">.</a> </span>At this point last year we had nearly 400 participants. The larger AVAs are listed above sorted by the surveys received as of March 7th.</div><div><br /></div><div><b><span style="color: #3d85c6;">How long will it take? </span></b></div></div><blockquote style="border: none; margin: 0px 0px 0px 40px; padding: 0px;"><div style="clear: both;">It will take approximately 15‐20 minutes to complete. In advance of taking the survey online, feel free to <a href="https://eml.svb.com/NjEwLUtBSy0yNjYAAAGLRCm6RHd6g6zD4sAWknh46XI4C4lMUrKLOGCY0hK13iiBKB-r1Vz1rGYfEwGO8SJ5VzGbD7Q=" target="_blank">download the questions here.</a></div></blockquote><div style="clear: both;"><br /></div><div style="clear: both;"><b><span style="color: #3d85c6;">What's in it for me?</span></b></div><blockquote style="border: none; margin: 0px 0px 0px 40px; padding: 0px;"><div style="clear: both;">As a survey participant, you’ll get the full results with analysis and benchmarks in May at no cost to you. Your answers are strictly confidential and all individual personal information will be removed. </div></blockquote><div style="text-align: left;"> </div><div style="text-align: left;"> <b style="color: #3d85c6;">Why the astonishingly low participation?</b></div><blockquote style="border: none; margin: 0px 0px 0px 40px; padding: 0px;"><div style="text-align: left;">We've had hundreds of people plead with us to continue with our industry support efforts when the FDIC owned us. That encouraged us to move ahead now. But about a dozen people tell us they received the survey notice, but didn't think we could possibly do it - thinking the invitation may be spam or phishing. </div></blockquote><blockquote style="border: none; margin: 0px 0px 0px 40px; padding: 0px;"><div style="text-align: left;">It is hard to believe with the drama of the past six weeks that we're going forward with the survey, but we truly are back to normal and hope you'll help us get to the minimum 600 responses needed to do this survey.</div></blockquote><div style="text-align: left;"> </div><div style="clear: both;"><div><b><span style="color: #3d85c6;">What's can I to to encourage more participation?</span></b></div><blockquote style="border: none; margin: 0px 0px 0px 40px; padding: 0px;">Please [<a href="https://svbwine.blogspot.com/2023/05/the-svb-2023-direct-to-consumer-wine.html" target="_blank">share the link</a>] to this blog in your social media channels and encourage participation.</blockquote><div> </div></div><p><b>Are you ready participate in the survey this year? </b><a href="https://eml.svb.com/NjEwLUtBSy0yNjYAAAGLRCm6RHd6g6zD4sAWknh46XI4C4lMUrKLOGCY0hK13iiBKB-r1Vz1rGYfEwGO8SJ5VzGbD7Q=" target="_blank"><b>Download the questions [here</b></a>], and...</p><div class="separator" style="clear: both; text-align: center;"><a href="https://eml.svb.com/NjEwLUtBSy0yNjYAAAGLRCm6RKaPAzRUCHrEyZ056UcYuSHQ9DsH232lrJQu9tvo2io-ACjrmtk4mxfYZ7SA2dzNDRA=" target="_blank"><img alt="" border="0" data-original-height="54" data-original-width="173" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg553ml06a9AvwbwGjJ4bAE_BIBfR3yHJ0ilpH_0MiVXbUHM49KFSZWkDhAX7RA-qQRO3puWTGoeoZgBZOFYHRUzgL_1cDAF9tmKyc0_2b_23dh38udSLV7qKd9DT266_vSmiL7QkjHRqg/s1600/Take+the+Survey+Temp.jpg" /></a></div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPgZB6Y0Cg4oSUrjceI-8pH5QuGQOf_zZ4WAXnJS6UrOw2Cu8vGoRGeM244X5mpL4DRb1xAKn5wzi6wa-pIJZv9bLhyphenhyphen71DCS_59EjUFz38zhZ4iaa4CQ3-Q6TRSEMg2-IW_J8qIE02IAg/s1600/Pagebreak+Temp.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="71" data-original-width="600" height="37" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPgZB6Y0Cg4oSUrjceI-8pH5QuGQOf_zZ4WAXnJS6UrOw2Cu8vGoRGeM244X5mpL4DRb1xAKn5wzi6wa-pIJZv9bLhyphenhyphen71DCS_59EjUFz38zhZ4iaa4CQ3-Q6TRSEMg2-IW_J8qIE02IAg/s320/Pagebreak+Temp.png" width="320" /></a></div>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.comNapa, CA, USA38.2975381 -122.2868659.9873042638211516 -157.443115 66.607771936178835 -87.130615tag:blogger.com,1999:blog-941731830705031230.post-1509756935829860502023-04-30T14:33:00.008-07:002023-05-24T12:07:30.994-07:00What Ended Up Happening to SVB's Wine Division?<p style="text-align: center;"> </p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEih3yn6edYL00wGZa0H00InQIml7j1HIfEIzUnbHC37ZuV7kRSVmdzu3oTd6nPAgWNZr0yUXiI6WtJYktzMYztuafrAdAyc9GeRr2iDOdj655TKAAc7w3GSgxkcC9VV6L9caOcrUw4M5DXolcw_xmmrZTJ1-r41o6whwB3ePqZ-9CqfKQ2JHXfTmKQU/s1122/Lost%20in%20a%20hedgerow.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1122" data-original-width="827" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEih3yn6edYL00wGZa0H00InQIml7j1HIfEIzUnbHC37ZuV7kRSVmdzu3oTd6nPAgWNZr0yUXiI6WtJYktzMYztuafrAdAyc9GeRr2iDOdj655TKAAc7w3GSgxkcC9VV6L9caOcrUw4M5DXolcw_xmmrZTJ1-r41o6whwB3ePqZ-9CqfKQ2JHXfTmKQU/w295-h400/Lost%20in%20a%20hedgerow.jpg" width="295" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span face="-apple-system, BlinkMacSystemFont, "San Francisco", "Helvetica Neue", Helvetica, Ubuntu, Roboto, Noto, "Segoe UI", Arial, sans-serif" style="background-color: whitesmoke; color: #111111; font-size: 13px; text-align: start; white-space: nowrap;">Photo by </span><a href="https://unsplash.com/ja/@qwitka?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText" style="background-color: whitesmoke; box-sizing: border-box; color: #111111; font-family: -apple-system, BlinkMacSystemFont, "San Francisco", "Helvetica Neue", Helvetica, Ubuntu, Roboto, Noto, "Segoe UI", Arial, sans-serif; font-size: 13px; outline: none; text-align: start; text-decoration-skip-ink: auto; transition: color 0.1s ease-in-out 0s, opacity 0.1s ease-in-out 0s; white-space: nowrap;">Maksym Kaharlytskyi</a><span face="-apple-system, BlinkMacSystemFont, "San Francisco", "Helvetica Neue", Helvetica, Ubuntu, Roboto, Noto, "Segoe UI", Arial, sans-serif" style="background-color: whitesmoke; color: #111111; font-size: 13px; text-align: start; white-space: nowrap;"> on </span><a href="https://unsplash.com/photos/1KdnEeZ-gLU?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText" style="background-color: whitesmoke; box-sizing: border-box; color: #767676; font-family: -apple-system, BlinkMacSystemFont, "San Francisco", "Helvetica Neue", Helvetica, Ubuntu, Roboto, Noto, "Segoe UI", Arial, sans-serif; font-size: 13px; text-align: start; text-decoration-skip-ink: auto; transition: color 0.1s ease-in-out 0s, opacity 0.1s ease-in-out 0s; white-space: nowrap;">Unsplash</a></td></tr></tbody></table><div class="separator" style="clear: both; text-align: center;"><blockquote><br /></blockquote></div><div style="clear: both;"><div style="text-align: left;">During the SVB meltdown last month, I wrote each of the first three weeks regarding the ordeal we were experiencing to keep interested parties apprised. There was a lot going on, and an infinite number of possible outcomes for the Wine Division. There was no assurance that the thought leadership we provide the industry would continue.</div><div style="text-align: left;"><br /></div><div style="text-align: left;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7MpTZtJ82y1rWcUQcoWaoXgXn5eREfjIwOxkXv3wze7-T2fDw2NJwOD_y8bazVzm2raHbtfuNfq4OOZyl6Liwftc1VxxV77fYfKcvvKzClKf9uhUtOQM4xXdLbeCwX1aHa6cUn-yQvclEg7vQmpjJeZotTEPB1pfI_u57c0AdplNcaz7XjmB5M6vP/s4000/Confusion.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="4000" data-original-width="2833" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7MpTZtJ82y1rWcUQcoWaoXgXn5eREfjIwOxkXv3wze7-T2fDw2NJwOD_y8bazVzm2raHbtfuNfq4OOZyl6Liwftc1VxxV77fYfKcvvKzClKf9uhUtOQM4xXdLbeCwX1aHa6cUn-yQvclEg7vQmpjJeZotTEPB1pfI_u57c0AdplNcaz7XjmB5M6vP/w142-h200/Confusion.jpg" width="142" /></a></div>When the FDIC owns you, they don't ask what you want. We could have been sold to one of the largest banks, in which case we would have been absorbed and lost our flexibility and identity. It was possible we could have been split up and sold by divisions, or if there was insufficient interest, they could have sold off loans one at a time. None of those possibilities took place. <b>What ended up happening to SVBs Wine Division?</b></div><div style="text-align: left;"><br /></div><div style="text-align: left;">I wrote <a href="http://svbwine.blogspot.com/2023/03/the-eulogy-for-svb-wine-division.html" target="_blank">the last post</a> a month ago, right after the bank was purchased by First Citizens Bank where I said: </div><div style="text-align: left;"><blockquote><i><b><span style="color: #990000;">"From everything we are seeing at this early stage, we're starting to believe we've somehow landed in the best outcome imaginable for our clients, employees and our community." </span></b></i></blockquote></div><div style="text-align: left;"></div><span><a name='more'></a></span><div style="text-align: left;"><br /></div><div style="text-align: left;">After a month under new ownership, I can confirm we did end up with the best possible outcome. We weren't purchased by a behemoth bank. The bank was left intact and not split up. There is no cross-over in business segments, and our new benefactor First Citizens Bank is running Silicon Valley Bank as a division of First Citizens. They are pragmatic and know that we are the experts in what we do and have told us to keep doing that. But since my last post, the situation has solidified and improved. There is more.</div><div style="text-align: left;"><br /></div><div style="text-align: left;"><b><i><span style="color: #990000;">I'm sure it's unprecedented in these types of circumstances, but the Wine Division of Silicon Valley Bank has retained 100% of our employees, as well as all of our borrowing clients. In fact, we've added a half-dozen significant clients over the past 6 weeks and today are at record client counts, and record loan volumes. </span></i></b></div><div style="text-align: left;"><br /></div><div style="text-align: left;">Since we don't have to change process or the way we approve things and are fully staffed without need to train new staff, we are completely operational and doing what we do. But we continue to hear wild rumors. Let me correct some:</div><h3 style="text-align: left;"><span style="color: #b45f06;"><span> </span>Rumors & Reality</span></h3><div style="text-align: left;"><ul style="text-align: left;"><li>One rumor is that <b><span style="color: #990000;">SVB failed and is gone.</span> </b><a href="https://www.cnbc.com/2023/03/27/first-citizens-bank-to-buy-silicon-valley-banks-deposits-and-loans.html" target="_blank">Silicon Valley Bank, of which the wine division is a part, was purchased by First Citizens Bank</a> (FCB) and is now operating as a division of First Citizens Bank - but under the name "Silicon Valley Bank." My business cards haven't changed and I've had two paychecks, so we must be in business!</li></ul></div><div style="text-align: left;"><ul style="text-align: left;"><li><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwHtD-EeSd1lwfCepJjpAeHmPU89SnXS1YEYwLSsV0mTvndUd-7jW0IuIo8mZcOXdPIjdtNlk4at5cFaFdL_VD_Z_DuGYzBkSn9M1Io1PDtMqueFjzLt_wiTLM0oC6nR3ASztn02F8oBIZRgpyqCwpmfVJrcZt0Xskc4IPs68gCaSMrVnpSIA72KWx/s5760/Gossip%20and%20Rumors.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="3840" data-original-width="5760" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwHtD-EeSd1lwfCepJjpAeHmPU89SnXS1YEYwLSsV0mTvndUd-7jW0IuIo8mZcOXdPIjdtNlk4at5cFaFdL_VD_Z_DuGYzBkSn9M1Io1PDtMqueFjzLt_wiTLM0oC6nR3ASztn02F8oBIZRgpyqCwpmfVJrcZt0Xskc4IPs68gCaSMrVnpSIA72KWx/s320/Gossip%20and%20Rumors.jpg" width="320" /></a></div>Another rumor is that <b style="color: #990000;">Silicon Valley Bank is in Bankruptcy. </b>That's false. SVB Financial Group (SVBFG) was the holding company for Silicon Valley Bank. The holding company <a href="https://www.pbs.org/newshour/nation/parent-of-silicon-valley-bank-files-for-bankruptcy-protection" target="_blank">did file for bankruptcy,</a> but Silicon Valley Bank where the wine division resides, is <u><b><span style="color: #b45f06;">completely separate</span></b></u> from the former holding company and entirely uninvolved in the Bankruptcy.</li></ul></div><div style="text-align: left;"><ul style="text-align: left;"><li><span style="color: #990000; font-weight: bold;">Rob McMillan left SVB. </span>That was a surprising one to me since I'm here. Once SVB was purchased by First Citizens Bank and it was clear First Citizens Bank wanted us to continue doing what we've always done, the easy choice I made was to stay where I've been for the last 32 years.</li></ul></div></div><div style="clear: both;"><div style="text-align: left;"><ul style="text-align: left;"><li>I'm always amused by rumors phrased as possibilities.<span style="color: #990000;"> </span>It pulls an unlikely rumor across the line of potential truth. That's something news companies are particularly adept at to create a stirr. The rumor a client passed to me was:<span style="color: #990000;"><b>"Someone told me that <u>it's possible</u> the SVB Wine Division will have to tighten their lending standards."</b></span> </li></ul></div></div><blockquote style="border: none; margin: 0px 0px 0px 40px; padding: 0px;"><div style="clear: both;"><div style="text-align: left;">The bank's collapse wasn't due to bad loans. The division and bank were operating well. <a href="https://www.cnbc.com/2023/03/28/svb-customers-tried-to-pull-nearly-all-deposits-in-two-days-barr-says.html" target="_blank">The issue was a run on the deposits of the bank.</a> We don't have to clean up a mess or tighten our lending standards.Since we have full staffing, there is no reason for us to slow up or alter what we do. We are actively kicking the hedgerows for new clients and having success!</div></div></blockquote><div style="clear: both;"><div style="text-align: left;"><ul style="text-align: left;"><li><b><span style="color: #990000;">The new owner of SVB isn't going to allow the thought leadership SVB is known for to continue. </span></b>That was one of the questions that needed to be answered prior to our sale to First Citizens Bank. But FCB has encouraged us to continue with our industry support efforts. </li></ul><div>It's strange that in the past several weeks we've gone from out of business, taken over by the FDIC, sold to a new owner, and after all that - we are all in our same desks doing the same jobs and called Silicon Valley Bank. While I don't recommend this experience, there are always good things to come out from failure and I'm sure I'll be sharing some of those thoughts over the next few months on this blog and in speaking engagements.</div></div></div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPgZB6Y0Cg4oSUrjceI-8pH5QuGQOf_zZ4WAXnJS6UrOw2Cu8vGoRGeM244X5mpL4DRb1xAKn5wzi6wa-pIJZv9bLhyphenhyphen71DCS_59EjUFz38zhZ4iaa4CQ3-Q6TRSEMg2-IW_J8qIE02IAg/s1600/Pagebreak+Temp.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="71" data-original-width="600" height="37" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPgZB6Y0Cg4oSUrjceI-8pH5QuGQOf_zZ4WAXnJS6UrOw2Cu8vGoRGeM244X5mpL4DRb1xAKn5wzi6wa-pIJZv9bLhyphenhyphen71DCS_59EjUFz38zhZ4iaa4CQ3-Q6TRSEMg2-IW_J8qIE02IAg/s320/Pagebreak+Temp.png" width="320" /></a></div>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-49701144856934709202023-03-30T17:09:00.016-07:002023-04-15T14:04:43.082-07:00The Eulogy for the SVB Wine Division<p style="text-align: center;"></p><br /><div class="separator" style="clear: both; text-align: center;"><iframe allowfullscreen="" class="BLOG_video_class" height="266" src="https://www.youtube.com/embed/DscJ5PFkZxQ" width="320" youtube-src-id="DscJ5PFkZxQ"></iframe></div><br /><h3 style="clear: both; text-align: left;"><span style="color: #b45f06;"><span> </span>I'm not dead yet!</span></h3><div style="text-align: left;"><br /></div><div style="text-align: left;">Fear of the unknown is a real thing. I think it's a self-protection response. Fear puts all of your senses on high alert as if a threat were imminent. In that state, and with an absence of real information, you theorize what's happening, then make up your own story of what you would do if one of the many permutations you imagine came to pass.</div><div style="text-align: left;"><br /></div><div style="text-align: left;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgi9ooDepGdc3TiJfuMIJsgomOnqmyREaFobmShD5PL5OQJxcoGiAACoPsEbKKYwIP7YbapG2dSyLmMo7SHwJSBG3fo1VjOXKQSGasj-xNXu6AvzSl68AR-kdztYQvq-PUDHZfYpdDGIrE4SlaLc50riw45idH9DTr0URePMrWuo_q3s2rMH-otfd7I/s401/The%20real%20news.png" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="191" data-original-width="401" height="95" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgi9ooDepGdc3TiJfuMIJsgomOnqmyREaFobmShD5PL5OQJxcoGiAACoPsEbKKYwIP7YbapG2dSyLmMo7SHwJSBG3fo1VjOXKQSGasj-xNXu6AvzSl68AR-kdztYQvq-PUDHZfYpdDGIrE4SlaLc50riw45idH9DTr0URePMrWuo_q3s2rMH-otfd7I/w200-h95/The%20real%20news.png" width="200" /></a></div>When the FDIC took over the bank almost three weeks ago, everyone imagined or feared the worst. It was the unknown in all its glory. </div><div style="text-align: left;"><br /></div><div style="text-align: left;">This has been uncharted territory for all of us - client and employees alike. How many have experienced a run on a bank? If you operate a business, what are you supposed to do to develop a plan? Google, where all truth is located, had "bank run" trending. There's your answer.</div><span><a name='more'></a></span><div style="text-align: left;"><br /></div><div style="text-align: left;">Early on we were living in the fog of battle and had very few answers. I was open about that at that time on this blog. Without real information, everyone on the outside was left watching the news which, more typically than not, looks for the most controversial spin that can be produced and that just increases fear and supports the social media rumor mill. But even with the ugly news cycle, from the inside, we started the recovery process.</div><div style="text-align: left;"><br /></div><h3 style="text-align: left;"><span style="color: #b45f06;"><span> </span>Well... you will be dead soon!</span></h3><div style="text-align: left;"><div class="separator" style="clear: both; text-align: center;"><br /></div></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_1Zj_DwJMwXqty1RMfOhP6FIsz2FAMdbscTWrgIAGnzA4M1aZ-GnOV3hLG5cBXrFD9G2Phvgvy_k1UHP-U3oh3IAYPpMMr1FTrlE8GfsvKqhknP47D-2c_bBLTObUQUCHYguzA68GRPTnpMcbpv3IdjPj2whEvMLHHqghPkELsDjkiziEg9PP8HUD/s1920/newspaper-1648554_1920.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1280" data-original-width="1920" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_1Zj_DwJMwXqty1RMfOhP6FIsz2FAMdbscTWrgIAGnzA4M1aZ-GnOV3hLG5cBXrFD9G2Phvgvy_k1UHP-U3oh3IAYPpMMr1FTrlE8GfsvKqhknP47D-2c_bBLTObUQUCHYguzA68GRPTnpMcbpv3IdjPj2whEvMLHHqghPkELsDjkiziEg9PP8HUD/s320/newspaper-1648554_1920.jpg" width="320" /></a></div>As it relates to the demise of my former employer, there has
been a lot written about that colossal failure: some of it was accurate, some sensationalized, some made up
out of thin-air, and some from well-intended competitors who just wanted to help
get the news out. <div><br /></div><div>The acquisition of legacy SVB by First Citizens Bank last Sunday just gave the rumor mill more to slice up. <b><span style="color: #b45f06;">But the real news is we aren't dead yet, and we aren't dying.</span></b></div><div><br /></div><div>At this point, I'm starting to believe the SVB Wine Division will be in a better spot than where we were before the FDIC stepped in. That might be hard for many to believe, but read on.</div><div><div style="text-align: left;"><p class="MsoNormal"></p></div><div style="text-align: left;"><h3 style="text-align: left;"> <span style="color: #b45f06;">Rumors</span></h3><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhi7tXiGIty5THWYBsz8IQGa-CXhLZSaMqwvve0hPgyiXG36okPDA8u9Z4-j2i3VxR7sHciZvKaBBuQzwxXuTObv_r7Sq6grVZOnGJ7YbPEByOBVLdq7vFb3e3v29kuqpWE6vyCm2f0Emuo9XTgrGJYhY4mG5FIqWbig-xoVREfRaSeCLpgct-ivCyT/s4000/Confusion.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="4000" data-original-width="2833" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhi7tXiGIty5THWYBsz8IQGa-CXhLZSaMqwvve0hPgyiXG36okPDA8u9Z4-j2i3VxR7sHciZvKaBBuQzwxXuTObv_r7Sq6grVZOnGJ7YbPEByOBVLdq7vFb3e3v29kuqpWE6vyCm2f0Emuo9XTgrGJYhY4mG5FIqWbig-xoVREfRaSeCLpgct-ivCyT/s320/Confusion.jpg" width="227" /></a></div>Let me bring you all current and clear up some rumors I've heard, because the imagination presses went into overdrive over the purchase of SVB by First Citizens Bank (FCB). Here are a few rumors that I've heard: <p></p></div><div style="text-align: left;"><ul style="text-align: left;"><li>Silicon Valley Bank will be assimilated into FCB and never be the same.</li><li>SVB and FCB have totally different cultures that will clash</li><li>The new bank is going to cut people and slash expenses. That's what always happens.</li><li>It's going to take years for SVBs Wine Division to come back, and we're not sure they can.</li><li>FCB is an East Coast Bank that knows nothing of the wine business.</li><li>All SVBs people are interviewing and will leave soon. </li><li>FCB will change all your loan terms.</li></ul>The predictions are coming from social media, anonymous people in the know, reporters creating sensationalized stories with click-bait headlines, and some of our competitors who once again, were just trying to help get the truth out.</div><div style="text-align: left;"><br /></div><div style="text-align: left;"><span>Not only are we not dead, we are alive and quickly getting back to normal.</span><span style="color: #990000; font-weight: bold;"> </span></div><div style="text-align: left;"><br /></div><h3 style="text-align: left;"><b><span style="color: #b45f06;"><span> The Wine Division is alive and growing</span></span></b></h3><div style="text-align: left;"><div class="separator" style="clear: both; font-weight: bold; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgkg61HlHfAIDQwvuwlKDLJWA5BieW3my8HcQkYeNas2gpxqYpI6WCEoVS-7gufr-yMi-yDOvx0YIZfP66OdT9XUYShudBn6SbeLfmuu6kD8iU0A0u5kAAj_pPJqhYko5OSK_E9iUugdpda9eeTnhTfzsvFV1v0uLhSQxlNfJo8V-9595JyS9QNaB4e/s266/FCB%20NA.png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="46" data-original-width="266" height="46" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgkg61HlHfAIDQwvuwlKDLJWA5BieW3my8HcQkYeNas2gpxqYpI6WCEoVS-7gufr-yMi-yDOvx0YIZfP66OdT9XUYShudBn6SbeLfmuu6kD8iU0A0u5kAAj_pPJqhYko5OSK_E9iUugdpda9eeTnhTfzsvFV1v0uLhSQxlNfJo8V-9595JyS9QNaB4e/s1600/FCB%20NA.png" width="266" /></a></div>I'll give you a little more about the acquiring bank later, but it's important to know that<span style="color: #b45f06;"> <b>there will be no eulogy for the Wine Division formerly known as SVB.</b></span></div><div style="text-align: left;"><br /></div><div style="text-align: left;">Start with the last rumor. No loan terms will change because of this acquisition. A deal is a deal.</div><div style="text-align: left;"><br /></div><div style="text-align: left;">We have 100% of our former staff retained today. No employee has left for another bank. We are all working from the same offices, at the same desks, with the same jobs as before. </div><div style="text-align: left;"><br /></div><div style="text-align: left;">All of our customers who banked with us before are still banking with us. We've even grown and added several new clients since we were taken over by the FDIC!</div><div style="text-align: left;"><br /></div><div style="text-align: left;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEge5OQdKtcLklGNSKcN7SA3pzjM_P1J0Fb4JwO6UaiObWH5j28y-LdtHbDe8trgzGb409sfUU9JsA-pz7tdJJN98SiIKuFVqCQpXV3p1s_UXxGPqVN4iK35JvEK0efZbPJPkZrnv7wwaosu6UH40biMSNJthyLX8Vo86_4e2zqehGbUo2ruyyy_TcyP/s573/SVB%20vs%20SVB%20Logos.png" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="203" data-original-width="573" height="113" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEge5OQdKtcLklGNSKcN7SA3pzjM_P1J0Fb4JwO6UaiObWH5j28y-LdtHbDe8trgzGb409sfUU9JsA-pz7tdJJN98SiIKuFVqCQpXV3p1s_UXxGPqVN4iK35JvEK0efZbPJPkZrnv7wwaosu6UH40biMSNJthyLX8Vo86_4e2zqehGbUo2ruyyy_TcyP/s320/SVB%20vs%20SVB%20Logos.png" width="320" /></a></div>This acquisition could have gone many ways. Our acquirer could have been a huge bank or hedge fund and just assimilated us. That would have made for a big change. Or the acquirer could have been a buy and slash acquirer and gutted the bank. None of those fears came to pass. </div><div style="text-align: left;"><br /></div><div style="text-align: left;">From everything we are seeing at this early stage, we're starting to believe we've somehow landed in the best outcome imaginable for our clients, employees and our community. With the torture we've each endured these past three weeks, we were due for a break!</div><div style="text-align: left;"><br /></div><div style="text-align: left;">Another real surprise for me: Our First Citizens Bank colleagues decided to keep our existing name and not change out our brand for theirs. Nearby, you will see the new logo. Can you tell the difference? It's the one on the left. You have to look at the small print. That is descriptive of FCBs plans for the Bank and Wine Division. <span style="color: #b45f06; font-weight: bold;">The SVB Wine Division will now be known as... wait for it... The SVB Wine Division!</span></div><div><br /></div><div style="text-align: left;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh35Srxtdl-R_fAKeXGMAzUGgs3S50V70cFMvDnv0SFljC4RiUkNJbK_tLVkqT2fbNvhmp7O7R48UDwLwUPII3uKXHfDGR_uY3-0BllMaBi-__Gw5tdIRGZnzCQy8DkU3g1PLsObPwUL0GA44cQRKc8cRn3CfmzLmda8pBBRa5Ap6hHsb2EQYbe6IfU/s2887/Keep%20Going.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="2360" data-original-width="2887" height="181" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh35Srxtdl-R_fAKeXGMAzUGgs3S50V70cFMvDnv0SFljC4RiUkNJbK_tLVkqT2fbNvhmp7O7R48UDwLwUPII3uKXHfDGR_uY3-0BllMaBi-__Gw5tdIRGZnzCQy8DkU3g1PLsObPwUL0GA44cQRKc8cRn3CfmzLmda8pBBRa5Ap6hHsb2EQYbe6IfU/w221-h181/Keep%20Going.jpg" width="221" /></a></div>What is going to change then? </div><div style="text-align: left;"><br /></div><div style="text-align: left;"><b>First Citizens Bank has given us a mandate: "Keep doing what you always do. You are the experts. Not us." They want us to run the business in the manner we always have.</b></div><div style="text-align: left;"><br /></div><div style="text-align: left;">They too place a high value in supporting the communities in which they operate, and are <a href="https://www.firstcitizens.com/commercial/insights" target="_blank">big believers in thought leadership</a>. </div><div style="text-align: left;"><br /></div><div style="text-align: left;">I'm fairly confident that we will be able to resume publication of the Annual State of the Industry Report. We might be able to get the Direct to Consumer survey off the ground this year but we have a tight window to figure that out. </div><div style="text-align: left;"><br /></div><div style="text-align: left;">Beyond that, we also are going to start releasing a quarterly report with financial benchmarks for the industry to use. So it looks like we will increase the thought leadership pieces we've been producing.</div><div style="text-align: left;"><br /></div><div style="text-align: left;">As we've started getting to know our new colleagues and benefactors, to a person we've all been bowled over by <a href="https://www.firstcitizens.com/about-us/our-values#" target="_blank">how similar our cultures seem to be</a>. The commitment to client care, integrity, and even their commitment to <a href="https://www.firstcitizens.com/about-us/inclusion-equity-diversity" target="_blank">Diversity Equity and Inclusion</a> stand out to me. </div><div style="text-align: left;"><br /></div><div style="text-align: left;">FCB also has a large Ag portfolio of family farms. So while they may not know wine, they know family farming. </div><div style="text-align: left;"><br /></div><div style="text-align: left;">Talking to the senior executives today, they are clearly excited about being a part of our wine industry. I'm not sure it could be a better fit. Well, they do talk funny but we can live with that. :O) </div><div style="text-align: left;"><br /></div><div style="text-align: left;">Don't take my word alone for the strength of our benefactors. If you have one minute, <a href="https://cdn.comparably.com/videos/competitors/119919.mp4" target="_blank">watch this short video and competitive analysis</a> from a third party source.</div><div style="text-align: left;"><br /></div><div style="text-align: left;"><b><br /></b></div><div style="text-align: left;"><b>~~~~~~ The comment section is now closed. Thanks for weighing in. ~~~~~~~~</b></div><p></p></div>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.com22Napa, California38.2975381 -122.2868659.9873042638211516 -157.443115 66.607771936178835 -87.130615tag:blogger.com,1999:blog-941731830705031230.post-23358556691060987582023-03-19T17:04:00.015-07:002023-04-01T11:39:09.192-07:00Living in two worlds<p style="text-align: center;"> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgzPEakrSjj48frjB763a7Q-7Mql9H2nTMHGsvvgDSSjT8umnuKwZCwHVz-P2ADjwz6ESacdhavA5MWqp3e3e1_7up2VQYePU2ifoZbBIiwkx-V0F2E3EMrQwjOAKCz1AoMp9hLqb7FRpf9xihWLfSIcziv5xnea8fPUlTR0Hi4Pj-chor1mqbsrIbC/s1253/Red%20or%20Blue%20Pill.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="577" data-original-width="1253" height="184" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgzPEakrSjj48frjB763a7Q-7Mql9H2nTMHGsvvgDSSjT8umnuKwZCwHVz-P2ADjwz6ESacdhavA5MWqp3e3e1_7up2VQYePU2ifoZbBIiwkx-V0F2E3EMrQwjOAKCz1AoMp9hLqb7FRpf9xihWLfSIcziv5xnea8fPUlTR0Hi4Pj-chor1mqbsrIbC/w400-h184/Red%20or%20Blue%20Pill.png" width="400" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><b>MORPHEUS: </b><i><span style="text-align: left;">You take the blue pill... the story ends, you wake up in your bed and believe whatever you want to believe.</span> You take the red pill, you stay in Wonderland and I show you how deep the rabbit hole goes.</i></div><p>After decades in banking, I thought I'd seen everything. But last week, with a jolt to my system, <a href="https://www.cnn.com/2023/03/13/investing/silicon-valley-bank-collapse-explained/index.html" target="_blank">I was unfortunately proven wrong</a>. This would turn out to be one of the worst weeks in my life. I kept thinking I must be dreaming this!</p><span><a name='more'></a></span><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_lifIliCkFnInFieNCUVaLYfBXNjCPKmdKU8XJV6kw8sBXGboAQxcjuEk6o1zz1spn8fkpue7bUXsznlRJlVtN2Q4fwe-v041j4gbGQfmJO-md_nl81JUtnLhtVaOTNS4v5OEFTkKp5yXUEyirPa3FmGeuAwKKYRMFKfx_fiQAwo5i4qDNXQYrAui/s1920/matrix-7464143_1920.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><br /><img border="0" data-original-height="1105" data-original-width="1920" height="115" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_lifIliCkFnInFieNCUVaLYfBXNjCPKmdKU8XJV6kw8sBXGboAQxcjuEk6o1zz1spn8fkpue7bUXsznlRJlVtN2Q4fwe-v041j4gbGQfmJO-md_nl81JUtnLhtVaOTNS4v5OEFTkKp5yXUEyirPa3FmGeuAwKKYRMFKfx_fiQAwo5i4qDNXQYrAui/w200-h115/matrix-7464143_1920.jpg" width="200" /></a></div>I'm used to working within my banking matrix with some level of control. If I needed to help a client with something, normally I could find a way. In this circumstance, that wasn't the case. I should have taken the blue pill to wake up in bed, in control, and believing what I believed. But I took the red pill and didn't like the reality that I awoke to find.<p></p><p>I was inward for that one fateful Friday when the bank was taken over. All I knew was I'd lost a substantial amount of money in the bank's stock, and the FDIC had given me a 45-day contract to work for them. That will make anyone nervous. </p><p>But the next day I grasped the truth, that this altered state of reality had impacted an ecosystem of relationships that is extended and complex - the most important of whom are our clients. This solution wouldn't be about me finding my next job. I needed to solve problems for everyone else, and my situation would sort itself out by helping others. The next day, I was blogging and engaging to open lines of dialogue.</p><span><!--more--></span><p>There's been an avalanche of news and commentary about my former employer SVB. Whether true or sensationalized, none of it has been easy for the employees or clients of the Wine Division to digest and has led to confusion within the wine industry. I can tell you what caused this crash, but I'm looking for solutions today, not assigning blame.</p><h3 style="text-align: left;"><span style="color: #b45f06;">Double vision</span></h3><div><span style="color: #b45f06;"><br /></span></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmtdI_pa54TNXLigr7H1QZmK90H724koiHS3nInLdLJyEWdHu6cqVa-nsV6w2IxHpIOsFGuhYNz_MkAiG5wkCl0dZBRnHHVcv8j0pa9sg4xMLnJkfJelPERjHTLL5-rG5FIU1NbemqDIUa9EvN-gKLl041-YnTud6F8o9Ogt9c1Dl2kATYySQCBTv0/s710/Double%20vision%20SVB.png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="355" data-original-width="710" height="160" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmtdI_pa54TNXLigr7H1QZmK90H724koiHS3nInLdLJyEWdHu6cqVa-nsV6w2IxHpIOsFGuhYNz_MkAiG5wkCl0dZBRnHHVcv8j0pa9sg4xMLnJkfJelPERjHTLL5-rG5FIU1NbemqDIUa9EvN-gKLl041-YnTud6F8o9Ogt9c1Dl2kATYySQCBTv0/s320/Double%20vision%20SVB.png" width="320" /></a></div>Finding clarity in a crisis isn't easy, but I've learned to depend on the values I've developed over decades to run my business life. For instance, when it comes to customers, I consider myself an investor and not a banker. I want to do things that are good for their business, not just loan them money and collect payments. I tell those employees I get to develop, it's about staying on the same side of the table with your customer.<p></p><p>Another tenet is transparency. Relationships are built on being clear. Because of that, I've tried to be as transparent as possible through this ordeal with everyone. I never want to surprise a client partner, and I ask the same in return. This situation didn't turn out that way. The wine division and our clients found out about this at the same time. </p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh9t0fL3R7eiodz5VU9rZMvJbPgAjzn89w4gcM0Lw1yXA7gYb0Q-uGl0BL1aREZz2pejxdDpXN2ScbDItIYyIMaTewd9dNJrEZTYVAwYtck5uwNRjPZLuWYcZycjxNnPrDeUvf5R0kbDoGp-BvUPNxvK_dq9WZTgCWjWXJ5TO4eY8wuhwXVPcLs77qz/s653/core-values.gif" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="309" data-original-width="653" height="151" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh9t0fL3R7eiodz5VU9rZMvJbPgAjzn89w4gcM0Lw1yXA7gYb0Q-uGl0BL1aREZz2pejxdDpXN2ScbDItIYyIMaTewd9dNJrEZTYVAwYtck5uwNRjPZLuWYcZycjxNnPrDeUvf5R0kbDoGp-BvUPNxvK_dq9WZTgCWjWXJ5TO4eY8wuhwXVPcLs77qz/s320/core-values.gif" width="320" /></a></div>One more value I hold: You represent your firm in your client's eyes. So acknowledge when your firm screwed up, and then do what you can to fix it. <p></p><p>The saying goes, "success has many parents, but failure is an orphan." While there's nothing I could have done to change this existing outcome, it's hollow sounding to just say <i>I'm sorry</i>. Actions will speak louder than words over the next 6 months. I feel the responsibility to help repair this mess for clients, employees, and the industry alike. <b><span style="color: #b45f06;">I feel I am making rapid progress.</span></b></p><h3 style="text-align: left;"><span style="color: #b45f06;">The Matrix revealed</span></h3><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJgQbf7w-KU5PkLogegTMfYphqg-S8hZxnP6Ot2e3H6hvanQ5sM2EzWIyHcz4H2fWGcCbJQALjYLF49tNjrk_EX3jGWTJxSvz37BZKdVIoJ1npiIhKQ1eb0EzisqiB2SPMEVPU8SZ8p2-dIwztKFEaj6yspW69iuF7f8Y601Ji-Tf4DvTlba1PMs-8/s3286/sebin-thomas-OdBFUurPHjo-unsplash.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="3286" data-original-width="2432" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJgQbf7w-KU5PkLogegTMfYphqg-S8hZxnP6Ot2e3H6hvanQ5sM2EzWIyHcz4H2fWGcCbJQALjYLF49tNjrk_EX3jGWTJxSvz37BZKdVIoJ1npiIhKQ1eb0EzisqiB2SPMEVPU8SZ8p2-dIwztKFEaj6yspW69iuF7f8Y601Ji-Tf4DvTlba1PMs-8/s320/sebin-thomas-OdBFUurPHjo-unsplash.jpg" width="237" /></a></div>As this past week inched along, events started to unfold. Sunday night, the 12th of March, the FDIC announced that they were <a href=" https://www.fdic.gov/news/press-releases/2023/pr23019.html " target="_blank">guaranteeing 100% of the deposits of SVB.</a> This was the first sign that the string of occurrences might trend in a better path. It was reported that the <a href="https://www.nbcnews.com/politics/politics-news/mccarthy-says-s-hopeful-us-officials-will-make-silicon-valley-bank-ann-rcna74550" target="_blank">FDIC was looking for a buyer</a> for the whole bank, but the hastily put-together <a href="https://www.wsj.com/articles/fdic-planning-another-svb-auction-d63c8929" target="_blank">auction wasn't successful</a>. <p></p><p>The most thorough view of the train wreck phase came from <a href="https://www.meiningers-international.com/wine/inside/silicon-valley-bank-failed-link-between-tech-wine-and-money" target="_blank">Robert Joseph from Meiningers International</a>. But at this point, I was starting to see a path ahead.</p><p>My time over the past week was split between talking to clients, responding to the press, and taking calls from various financial organizations that wanted to know if they could buy the Wine Division. </p><p>In the space of one week, <span style="color: #b45f06;"><b>our Division Manager Jed Taborski, and I took a minimum of a dozen calls from seriously interested organizations,</b></span> and we directed them to the FDIC. That tells us what we've built here has value, and that gives me confidence we will find a buyer and a solution.</p><h3 style="text-align: left;"><span style="color: #b45f06;">The Solution</span></h3><p>What will the solution look like? They are being pieced together in board rooms across the United States and Canada right now. </p><p>There appears to be movement at the FDIC after this past weekend following two unsuccessful bids for the entire bank. <a href="https://www.cnbc.com/2023/03/19/us-fdic-to-relaunch-sale-of-silicon-valley-bank.html" target="_blank">The press is saying the bank will now be broken up</a>. Those words sound scary, which is what the press does - look for scary words to drive traffic and views. It simply means the FDIC is now going to open the opportunity to purchase different divisions within the bank. <span style="color: #b45f06;"><b>F</b></span><b><span style="color: #b45f06;">rom my chair, that is exactly what the Wine Division needs - a new owner.</span></b></p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjgvPvC4031NkiR_XpU0e3anGgXK6s2kGQ5Zo6rVNt5XBc3z6znaMSzd7M91yOpCY8tj-IlqTIIZ9nXE7BhzlIDc2dlRzo_hRmPo_z8kwBentIfdOgyh3uUp1IQlTc7KbZf8gWcuYXDrWaC5j2-COsNCEFieruw3nqjdSwVglFY5nUAze__KKR-OwFa/s1454/Piecing%20together.png" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="512" data-original-width="1454" height="198" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjgvPvC4031NkiR_XpU0e3anGgXK6s2kGQ5Zo6rVNt5XBc3z6znaMSzd7M91yOpCY8tj-IlqTIIZ9nXE7BhzlIDc2dlRzo_hRmPo_z8kwBentIfdOgyh3uUp1IQlTc7KbZf8gWcuYXDrWaC5j2-COsNCEFieruw3nqjdSwVglFY5nUAze__KKR-OwFa/w417-h198/Piecing%20together.png" width="417" /></a></div><b><span style="color: #b45f06;">Based on the incoming calls this past week, I believe there are many financial organizations that will put in a bid for the wine division as a stand-alone entity, apart from other units of the former SVB. There might be a buyer of all the bank, but I like that the FDIC is encouraging all outcomes. </span></b><p></p><p>What does that mean to clients and the industry? It means we will be able to resume our focus on this business, and hopefully along with that, resume the production of thought leadership for the wine industry.</p><h3 style="text-align: left;"><span style="color: #b45f06;">Please...</span></h3><p>We have had such a strong level of support over the past week. I appreciate that immensely and I ask you to please continue to speak with your social media circles about your feelings regarding SVB and what we do to support the business. That is support for banks thinking about buying us.</p><p>I've never been through this before so my timing could be off, but I believe there will be an announcement of a formal solution within the next three weeks. And when that happens, I believe we will be in a better situation than we were before this crisis. </p><p>I know this time of waiting is uncomfortable for our friends, neighbors, family, clients, vendors, spouses, and wine industry employees,<span style="color: #b45f06;"> <b>but I ask you to hold fast with us for a few more weeks. Let this phase sort itself out. Your vote to support this group of industry professionals will benefit you and the entire wine ecosystem.</b></span></p><h3 style="text-align: left;"><b><span style="color: #b45f06;">Thank you!!!</span></b></h3>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.com0tag:blogger.com,1999:blog-941731830705031230.post-88024648419850560822023-03-11T15:42:00.009-08:002023-03-31T10:34:18.157-07:00Silicon Valley Bank: What comes next?<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFaz2NVdI-Q_z3rOLD3hURQAVbS4PAQpCA6DCdes7MgwLrFGQ5GuUJp47eoXbl0hCqryK12FwAZxHDa_3dKpmupmK_o74XanwgNkVoVDdoshZRxWKjmMvDCHa7NkzqVtlMOLP7VXjGShs35Zlz-yvtesi3lCeRFKlEsvY4hfjlTr-0WePN4Z8giUwO/s6240/pexels-shvets-production-7203956%20(2).jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="6240" data-original-width="4160" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFaz2NVdI-Q_z3rOLD3hURQAVbS4PAQpCA6DCdes7MgwLrFGQ5GuUJp47eoXbl0hCqryK12FwAZxHDa_3dKpmupmK_o74XanwgNkVoVDdoshZRxWKjmMvDCHa7NkzqVtlMOLP7VXjGShs35Zlz-yvtesi3lCeRFKlEsvY4hfjlTr-0WePN4Z8giUwO/w266-h400/pexels-shvets-production-7203956%20(2).jpg" width="266" /></a></div><p><br /></p><h3 style="text-align: left;"><span style="color: #b45f06;">Processing</span></h3><p>For those who've read this blog before, you may notice the headline slide has changed from <b>SVB on Wine,</b> to <b>Rob McMillan on Wine</b>. I know I don't need to explain that change. </p><p>This is a horrible message for me to have to write. I was asked to stay silent the past few days by SVB but now that the die is cast, I thought I should sit down and share what I know.</p><p>To start, my employer formerly known as Silicon Valley Bank, no longer exists. I'm still processing the whole thing as are most people associated with the bank. </p><p>On Friday morning, clients, employees, bank suppliers and shareholders all awoke to the same news: <a href="https://www.cnn.com/2023/03/11/business/svb-bank-collapse-explainer-timeline/index.html">SVB has been taken over by the FDIC.</a> For everyone involved, there is a range of emotions to process; fear, anxiety, anger and so much more. I'm personally cycling through all of the same emotions.</p><span><a name='more'></a></span><p><a href="https://www.cnn.com/2023/03/11/business/svb-bank-collapse-explainer-timeline/index.html" target="_blank">In the space of 48 hours</a>, SVB went from being a very <a href="https://www.nytimes.com/2023/03/11/business/dealbook/silicon-valley-bank-collapse.html">viable banking organization </a>with sound metrics by all regulatory measures, to being out of business. Investors lost billions, <a href="https://www.reuters.com/markets/us/svb-financial-collapse-repeat-pix-2023-03-11/" target="_blank">clients had their deposit accounts frozen</a>, and the FDIC halted all banking transactions to stop the panic-driven loss of cash. </p><p>How could that have happened? I never thought I'd see an old-fashioned run on the bank as portrayed in "<a href="https://www.youtube.com/watch?v=iPkJH6BT7dM" target="_blank">It's a Wonderful Life</a>," let alone find me in the middle of a collapse, but that's the reality. The situation didn't turn out like the movie. </p><p>The wine industry had nothing to do with this. This event was an unnecessary fear-based collapse that the <a href="https://docs.google.com/document/d/13h84RV5MXZpImXxelaYOcI6B5OUwjL1H4ERxW7EjTGQ/edit" target="_blank">Venture Capital industry participated in, and is having second thoughts about</a>. Six hundred thirty six VCs are trying to make their voices heard on this disturbing collapse - albeit a little late.</p><p>This incident is going to go down in infamy with <a href="https://en.wikipedia.org/wiki/Continental_Illinois">Continental Illinois</a>. That was the last bank I recall that failed over a run on deposits. While the Washington Mutual failure is the largest ever bank failure, that bank collapsed over loan problems. That is the normal path to a bank failure and you typically see the signs of that very early. Those problems didn't exist at SVB. The loan portfolio was performing well. Actually, as far as I could tell, the whole business was doing well. Today, in the blink of an eye this is the second-largest bank failure in the history of the US. It's hard to fathom. </p><h3><span style="color: #b45f06;">Clients</span></h3><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqvnUjCcZaLk7UvYGWypaA7kmjoKqfKXev9yAWj97n0aCjy_a1mg4avfUs7zxLnVtpwCi7eNfd6c08BCp-5p_iXSqxnlbhA6n2sQO17mmHLGSaB6IxCZE5iTDXG6I430ibXo4OHW4f_u8QKQdA_tfn_0KPPfZs9Gh0rqoVxHCd1GlOXYGDCAvH1ug9/s430/SVB%20logo.png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="231" data-original-width="430" height="133" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqvnUjCcZaLk7UvYGWypaA7kmjoKqfKXev9yAWj97n0aCjy_a1mg4avfUs7zxLnVtpwCi7eNfd6c08BCp-5p_iXSqxnlbhA6n2sQO17mmHLGSaB6IxCZE5iTDXG6I430ibXo4OHW4f_u8QKQdA_tfn_0KPPfZs9Gh0rqoVxHCd1GlOXYGDCAvH1ug9/w248-h133/SVB%20logo.png" width="248" /></a></div>I've taken countless calls from clients who want more information, want to better know what happened, or just want to talk to me. Most it seems want to know how I'm doing too, and I sincerely appreciate the good wishes and prayers. Some though have been irritated or angry, and I completely understand. That's OK. This isn't fair. The frustration is justified.<div><br /><div><div>For the moment, we are told by the press release from the FDIC that <a href="https://www.fdic.gov/news/press-releases/2023/pr23016.html" target="_blank">banking activities will resume no later than Monday, March 13, including on-line banking and other services.</a> Opening is a start, but that doesn't begin to solve client issues with banking. </div><div><br /></div><div><b>[Monday Update: The bank is open, processing loan advances, and fully operational, albeit a little slower than clients expect. </b><b>The depositors now have unlimited insurance from the US Government. So in a somewhat ironic turn, <a href="https://www.fdic.gov/news/press-releases/2023/pr23017.html" target="_blank">SVB now is the safest bank for deposits in the US</a>) </b></div><div><br /></div><div><br /></div><div><h3><span style="color: #b45f06;">The Industry</span></h3><p>Many have asked me about the reports that I write, particularly the State of the Industry, but also all the benchmarking data I've been able to provide for the past 20 years for free. I've received many calls and emails from people telling me how they depend on the information to feel informed and make decisions in their business. Numerous universities around the world use this information too, and some have asked me if that is going to continue. </p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMsPpadVZ10ShvFTQpAUEKo3kiGsIxyyFKx8fBO-e5oMALMYqJkV0UFNEjhfkwBDLSiyzuX-cHdge5TVEoZDFIXr3U9BHtx6PvI46i0ckhYkthS2a8xH11SgeVHOZhEt4Bs9IPEZ21r18TiPUVU8im8QZQZPBXQXZqq7gRpJKXzS4V7qfsvLadf0oV/s720/2017%20Cover%20Shot%20SOTI.png" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="720" data-original-width="561" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMsPpadVZ10ShvFTQpAUEKo3kiGsIxyyFKx8fBO-e5oMALMYqJkV0UFNEjhfkwBDLSiyzuX-cHdge5TVEoZDFIXr3U9BHtx6PvI46i0ckhYkthS2a8xH11SgeVHOZhEt4Bs9IPEZ21r18TiPUVU8im8QZQZPBXQXZqq7gRpJKXzS4V7qfsvLadf0oV/w156-h200/2017%20Cover%20Shot%20SOTI.png" width="156" /></a></div>Unless the Wine Division is working under a different brand in the next week or so, I can say with a fair degree of certainty that I won't be able to produce Direct to Consumer benchmarking information this year. That planning was already well underway with the survey release planned for the end of this month. </div><div><br /></div><div>The next area of information I've used is the bank's database of winery financial statements we call Peer Group Analysis (PGA). That information doesn't exist anywhere else. I'm not sure what will happen to that database. If the bank has a buyer, the platform will go to that buyer to decide what to do, but the likelihood is that information will be lost sadly.<p></p><p>The State of the Industry Report is of course up in the air as well. I don't traditionally start until October so there is a little more time there. Many people want to see that continue, but I'll have to see how things play out. While SVB has done these reports gratis, there is a significant cost to produce them and logistics would have to be covered - analysis, writing, formatting, design. There is a lot that goes into the production of the report.</p><p><b>[Monday Update: The outpouring of support for the work we do on behalf of the wine industry has been pretty surprising to me; not so much that people appreciate what we do, but the literally hundreds of messages I've received on the topic. </b></p><p><b>There are any number of solutions starting to crystalize, from a consortium of the industry providing funding for this activity, starting a non-profit, and some stand-alone companies who want to take on this work under their brand. Nothing can be decided at this point until after we get through the FDIC sales process. But the outpouring of support for the effort is going to be helpful in discussions with an acquirer when we discuss continuing these efforts.]</b></p><p><br /></p><h3><span style="color: #b45f06;">The Employees</span></h3><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikdRkvW2IWgYyKQeoadL641c8qGavyG3ReTnYy4gRWoWWm7DptTgxBRBO5zPXsKuz-Lz72UAVjY290tFJ4cBgXS2-cvYXeqKnTVpyetRMlnIcD5ltJ8AMN0JK1l260R2wUT1yd2WzBhgIggktXmM22zp2JzHFqlyMAlF2FhA06CAHKRS8zmg58vhgm/s1920/office-g87b78946e_1920.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1280" data-original-width="1920" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikdRkvW2IWgYyKQeoadL641c8qGavyG3ReTnYy4gRWoWWm7DptTgxBRBO5zPXsKuz-Lz72UAVjY290tFJ4cBgXS2-cvYXeqKnTVpyetRMlnIcD5ltJ8AMN0JK1l260R2wUT1yd2WzBhgIggktXmM22zp2JzHFqlyMAlF2FhA06CAHKRS8zmg58vhgm/s320/office-g87b78946e_1920.jpg" width="320" /></a></div>The employees were told Friday night March 10th by the FDIC that <a href="https://www.reuters.com/markets/us/svb-financial-collapse-repeat-pix-2023-03-11/" target="_blank">they would be offered jobs at 1.5 times their previous base salary for 45 days</a>. The implied hope is the bank will reopen under the banner of a new organization. I'm sure those discussions are underway, otherwise, there wouldn't be much need to try and keep all of the staff, but there are no guarantees there. I trust that the bank will indeed open under the FDIC ownership on Monday though.</div><div><br /></div><div><b>[Monday Update: The FDIC has confirmed we are being paid, and have our same benefits. There is no news about the Bank's sale. They have also removed the temporary employment status messaged earlier at 45 days. That's a small victory.] </b><br /><p></p><p>This bank collapse obviously impacts all the employees who in most cases were shareholders. <b>Some had their life savings wiped out, and now are dealing with a threat to their day-to-day living.</b> But as we've each been processing our own grief, everyone in the Wine Division is functioning professionally and trying and take care of our clients. We don't have all of our tools available and not having complete information is a huge frustration for everyone. </p><h3><span style="color: #b45f06;">What comes next?</span></h3><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhnVUVY1SmenMYR4HxIapS_anb0jA6zRZ3jNEOs8GS7EsMuzRFNWQxLNq3L6TJiW-LTIhuNmXjnxmmuF333Ri44vk9XSo6SgqEEEmMNVwg_hkZa_s73E7KAC7zGeFlAoV4vr3WEqHNAcIO8flWVtISmkbt37iFMFfhczs_Jw5eiSJ6Y44ndge_Am1L2/s1920/bokeh-gbb2339e5d_1920.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="855" data-original-width="1920" height="143" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhnVUVY1SmenMYR4HxIapS_anb0jA6zRZ3jNEOs8GS7EsMuzRFNWQxLNq3L6TJiW-LTIhuNmXjnxmmuF333Ri44vk9XSo6SgqEEEmMNVwg_hkZa_s73E7KAC7zGeFlAoV4vr3WEqHNAcIO8flWVtISmkbt37iFMFfhczs_Jw5eiSJ6Y44ndge_Am1L2/s320/bokeh-gbb2339e5d_1920.jpg" width="320" /></a></div>The culture here at Silicon Valley Bank was amazing and it's a real loss for everyone. I've never been around such a truly positive and creative group of men and women. We were able to do things other banks couldn't dream of, and focus on finding ways to help our clients and the industry evolve and succeed, while quietly giving back hundreds of millions for causes important to us like farmworker housing for instance.<p></p><p>If we don't find a bank buyer in short order, each employee is going to have choices to make about what comes next. Should that happen, I can say with confidence that every employee in the Wine Division of the bank is remarkable and will be a great hire for any banking institution. Where will everyone land? Some will stay in the banking business and take on different roles or industries. Some will find spots in different wine banks that will no doubt be anxious to have SVB clients.</p><p><b>[Monday Update: We've been listening to parties interested in buying the full Wine Division. Thus far there are 7 parties, three of which are banks who have reached out. We have no authority to act in these discussions, but we are listening, talking, and directing them to the FDIC.)</b></p><p>What am I going to do? I really don't know yet. I've been listening to people who are coming up with interesting options for the Division, and that's for now my focus. But, I have to listen under the circumstances. I'm going to take a little time to see if I can make a decision that will be a benefit to the industry and other of my colleagues first. If we end up being sold to a suboptimal buyer and something does pop up that benefits the industry, our employees, and our clients, that's where you'll find me next.</p><p>In the meantime, wish us all luck. Not knowing if the bank's URL will remain up, (@SVB.com) if anyone wants to DM me for anything, the way to always find me is on <a href="http://linkedin.com/in/2robmcmillan">Linkedin</a>.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMhJfphOU1oBaXNUBG_3FLOGtec4jHWu3QJMT6XwivVW_OnrBMeYH1bU8XFQDiMocIyB85cU6ESqwx_X9modoUHUGMwrUoNA5yMKkRYBgc0Ocycxb-S4sj_fAVJe4Pk_d8tiFXddY-B8I7y_rxBO6drq3ScVVLqR6uQ9yrRQ_fHY4HnB0pXhPvUX7m/s600/Pagebreak%20Temp.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="71" data-original-width="600" height="38" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMhJfphOU1oBaXNUBG_3FLOGtec4jHWu3QJMT6XwivVW_OnrBMeYH1bU8XFQDiMocIyB85cU6ESqwx_X9modoUHUGMwrUoNA5yMKkRYBgc0Ocycxb-S4sj_fAVJe4Pk_d8tiFXddY-B8I7y_rxBO6drq3ScVVLqR6uQ9yrRQ_fHY4HnB0pXhPvUX7m/s320/Pagebreak%20Temp.png" width="320" /></a></div></div></div></div>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-37270626522845374712023-01-11T20:50:00.006-08:002023-01-19T10:56:00.130-08:00The 2023 SVB Annual State of the Industry Report will be released January 18th<p style="text-align: center;"><b> <a href="https://events.svb.com/stateofthewineindustryreport2023?utm_source=robsblog" target="_blank">Register here</a> for the videocast, replay, presentation deck, and copy of this year's report.</b></p><p style="text-align: center;"><br /></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgphLgHhBBgdtL0j-Fd3Lq1iy3ZbzCCFSjfqa_CcXUYXRRJjO0EGVNDLW7NlArLJYsgZBKlkvzTQkeSuefCBc-ibFSSN_uudjnzpOhxsolKlhcVHMIr4FeGyfWHcgdiJc4ALTFZE7nZeVsRiw0XaCPoAMqAvqmJ4gzQKGPynX9lxHcxSYghFDWW-s9f/s1037/How%20was%20your%20year%202022.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="433" data-original-width="1037" height="194" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgphLgHhBBgdtL0j-Fd3Lq1iy3ZbzCCFSjfqa_CcXUYXRRJjO0EGVNDLW7NlArLJYsgZBKlkvzTQkeSuefCBc-ibFSSN_uudjnzpOhxsolKlhcVHMIr4FeGyfWHcgdiJc4ALTFZE7nZeVsRiw0XaCPoAMqAvqmJ4gzQKGPynX9lxHcxSYghFDWW-s9f/w462-h194/How%20was%20your%20year%202022.png" width="462" /></a></div><br /><p></p><p>Within the 2022 SVB State of the Wine Industry Survey run last October, we asked how 2022 went and got the following response. (See headline slide) </p><p><b><span style="color: #b45f06;">Forty-percent of respondents said that the year was one of their better years or their best year ever.</span></b> Fully sixty-five percent said it was a good year, and those results are very close to those from 2019 when we asked the same question. </p><span><a name='more'></a></span><p><br /></p><h3 style="text-align: left;"><span style="color: #b45f06;">Good News and Bad News</span></h3><p>The results from the above survey reflect the view of the smaller premium wineries, and while they had a good year as you can see from the chart, the same can't be said for the industry as a whole.</p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEihFm1Sh_DBkU6A9ABy_2gUXYtNwywf5GXP8XdH4Op1V07VWQ4VSZXlk8dJmmT-Y3BhkE_2HQ6os28wyD0fGclCWgXTANQCnyMtaWhupD0oFeTWxgI4dQnAeFCKGDRlD4JCupmKVpLcEY-Z6YWFNE9NKAef0DyO-HiPXiw20RCTsESZ1TalmSfJWpfH/s4389/Good%20news%20Bad%20news.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="4389" data-original-width="3725" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEihFm1Sh_DBkU6A9ABy_2gUXYtNwywf5GXP8XdH4Op1V07VWQ4VSZXlk8dJmmT-Y3BhkE_2HQ6os28wyD0fGclCWgXTANQCnyMtaWhupD0oFeTWxgI4dQnAeFCKGDRlD4JCupmKVpLcEY-Z6YWFNE9NKAef0DyO-HiPXiw20RCTsESZ1TalmSfJWpfH/w170-h200/Good%20news%20Bad%20news.jpg" width="170" /></a></div>2022 will be the second year in a row the wine industry will report negative sales growth by volume by my reckoning. I've been scouring the press this month, looking for an estimate of positive volume growth but haven't found one yet. The estimates I've seen range from negative 3.5% volume decline, to negative 0.6%. <span style="color: #b45f06;"><b>This is the first time there is an industry analyst consensus that the wine business has entered a period of negative volume growth.</b> </span>The last time the industry reported a volume decline was 1994, so it is a big deal.<p>Does that mean the industry is collapsing? Hardly. The wine business has been a part of rituals, family celebrations, religion, and used in social occasions for at least 8,000 years. So it's not going away. In fact the premium side of the wine business is still doing just fine with sales growth on a dollar basis up about 9% through nine months ending September 2022. </p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWBfJvdxEZORqNMo4CwrISE4YtayNeOZivXN3PEgCn4chNdPea2YMH9WM4RMWCPVYkDKaMtqc8OBkwwuP2bt2ulPIyBIuSMBJkSvNZ1Oe0Qoj-Yah7vnYsMVHbvVdAMtshK88EGsdOskYlhn6Qq6Ur5jnUdvjTtK-8kHDCqRVvPXCOqmtXfNtlebon/s4608/Warning%20Signs%20Temp.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="3072" data-original-width="4608" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWBfJvdxEZORqNMo4CwrISE4YtayNeOZivXN3PEgCn4chNdPea2YMH9WM4RMWCPVYkDKaMtqc8OBkwwuP2bt2ulPIyBIuSMBJkSvNZ1Oe0Qoj-Yah7vnYsMVHbvVdAMtshK88EGsdOskYlhn6Qq6Ur5jnUdvjTtK-8kHDCqRVvPXCOqmtXfNtlebon/s320/Warning%20Signs%20Temp.jpg" width="320" /></a></div>But we can't ignore the clear warning signs. The writing on the wall is quite legible and there are major challenges to act upon if we want to recover growth in the industry.<p></p><p>I'm particularly proud of the work done on the Annual State of the Industry Report this year. It's a report that started the middle of September 2022 and was completed on December 5th before editing and formatting. The report is one-hundred pages of charts and perspectives.</p><p>Within the new report, we discuss a full range of challenges and have an updated view on how the wine industry has progressed in attracting younger consumers to the category. <b><span style="color: #b45f06;">The news regarding younger consumer adoption of wine is a surprise to me and it's part of what will be discussed in the live videocast that will take place Wednesday, January 18th.</span></b></p><p><b>Silicon Valley Bank and I invite you to join us on Wednesday, January 18th for the live videocast release of the findings from the new 2023 State of the US Wine Industry Report. Registration for the telecast comes with a replay link for later viewing, download links to the studio presentation deck, and the full report. </b></p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://events.svb.com/stateofthewineindustryreport2023?utm_source=robsblog" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="89" data-original-width="364" height="78" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUbZxG6pkA5Xr-cAAFvgJBFZ_TIjUEs_T8Wp-nrg5svbjSydBPwzHgoCUF49GjwHPK3ILeURjwBEy2WOtoXWHUDirOxCvB3fG4QmEHwCjIDFsHVHT3a1UUl3KX2ubxtpjMCBVZ14TRfcu0jJJreTtd1er2WfLZT3BmYmVbZpQUq4eY9HjCF6cahO7j/s320/Sign%20Up.png" width="320" /></a></div><p></p>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.com2901 Tasman Dr Suite 208, Santa Clara, CA 95054, USA37.4042033 -121.979005537.397385279687896 -121.98758856884766 37.4110213203121 -121.97042243115234tag:blogger.com,1999:blog-941731830705031230.post-442339095945468152022-10-13T10:42:00.016-07:002022-10-19T17:09:46.022-07:00Industry Sentiment Index Turns Decisively Negative<div class="separator" style="clear: both; text-align: left;"><span style="font-family: verdana;"><div class="separator" style="clear: both; text-align: center;"><span style="text-align: left;"> <div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFS7h56XUjV-_xnTGL3ywIlY1lgX-EMWFmDiQoqooK1I1jLGPztxgZvq63qyUx55CoNB6SRXioQXE6wN73S9WhQzBkY9H5qSxvwojDlu2Bgarfr0Q8CyikAV6dfyC3HKbY-106pxK99vnY-ZIMQrporrzjyUom-UclwEavstVPaQOS22m_eUOWhlCZ/s745/2023%20Industry%20Sentiment%20Index%20Prelim.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="472" data-original-width="745" height="310" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFS7h56XUjV-_xnTGL3ywIlY1lgX-EMWFmDiQoqooK1I1jLGPztxgZvq63qyUx55CoNB6SRXioQXE6wN73S9WhQzBkY9H5qSxvwojDlu2Bgarfr0Q8CyikAV6dfyC3HKbY-106pxK99vnY-ZIMQrporrzjyUom-UclwEavstVPaQOS22m_eUOWhlCZ/w488-h310/2023%20Industry%20Sentiment%20Index%20Prelim.png" width="488" /></a></div></span></div></span></div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: left;">We've created a Sentiment Index and have run with the idea in our State of the Industry Report for the last 6 years, gaining some interesting insights along the way. The headline slide is an early read of how the industry participants feel presently, as well as an indicator of the relative impact of pain points and success factors. </div><span><a name='more'></a></span><div class="separator" style="clear: both; text-align: left;"><br /></div><div class="separator" style="clear: both; text-align: left;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgEHH-4kJKiS3wjWzloJqsM8VRWmZAUlN090i_Ezv4JXz2xcwTtXBi2GIZ72dI4kEaX_YxAU4DKOFKu9Fmm2F63tCOlRIRY1JVeYjvRGwNmRXh1k-5r4zzwYE_YjdhKKbsdwL-yS1UGyA1KVfEw8SQ7juu6H_ELmge6X5thbfybhlEXYtOcxrqDPC5w/s1100/Chart%20random.png" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="750" data-original-width="1100" height="136" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgEHH-4kJKiS3wjWzloJqsM8VRWmZAUlN090i_Ezv4JXz2xcwTtXBi2GIZ72dI4kEaX_YxAU4DKOFKu9Fmm2F63tCOlRIRY1JVeYjvRGwNmRXh1k-5r4zzwYE_YjdhKKbsdwL-yS1UGyA1KVfEw8SQ7juu6H_ELmge6X5thbfybhlEXYtOcxrqDPC5w/w200-h136/Chart%20random.png" width="200" /></a></div>The Net Sentiment Index as it stands today is <span style="color: #cc0000;"><b>-15.78</b></span> compared to <span style="color: #cc0000;"><b>-2.08</b></span> last year. The maximum low is negative 100 and the maximum high is positive 100. The calculation employs the Michigan Consumer Sentiment methodology and subtracts negative responses from positive responses, and ignores neutral responses. The methodology makes it difficult to have a reading above 50 in either direction. For example, if 50 people believed the economy as they define it had a positive impact on their operation, 20 believed it was neutral, and 30 believed the economy had a negative impact, the resulting index would be 20. (50-30=20) To get to 100 positive, 100% of the respondents would have to respond the economy had a positive impact on their operations. </div><div class="separator" style="clear: both; text-align: left;"><br /></div><div class="separator" style="clear: both; text-align: left;">In 2020 the index was at <span style="color: #cc0000;"><b>-42.03</b> </span>for reference. (If I recall correctly, 2020 wasn't a great year.) So moving from <span style="color: #cc0000;"><b>-2.08</b></span> down to <span style="color: #cc0000;"><b>-15.78</b></span> tells us from the results thus far,<span style="color: #b45f06;"><b> <u>the mood in the industry has turned decisively negative versus last year</u></b></span><span style="color: #cc0000;"><u>.</u></span></div><div class="separator" style="clear: both; text-align: left;"><br /></div><div class="separator" style="clear: both; text-align: left;"><div class="separator" style="clear: both; text-align: center;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMjrUhPkWzRGEa-Z_0S162F6Zw6lTmqg1dxK0M0DeZVNJQAGnv1BAeSlrFs5kOjLx5F0lUShrKFMccAUtUJXtVGiIJLTyI4wS2tCX7mRD8x3Fveb5LQOT7yKp7rOx9D_rodY1tTFK3MaP0y0lIswdncUl82OZGF3ON3GdyK6teHB5X-ABSF2Y0nlqS/s510/ecomonic%20squeeze.png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="331" data-original-width="510" height="130" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMjrUhPkWzRGEa-Z_0S162F6Zw6lTmqg1dxK0M0DeZVNJQAGnv1BAeSlrFs5kOjLx5F0lUShrKFMccAUtUJXtVGiIJLTyI4wS2tCX7mRD8x3Fveb5LQOT7yKp7rOx9D_rodY1tTFK3MaP0y0lIswdncUl82OZGF3ON3GdyK6teHB5X-ABSF2Y0nlqS/w200-h130/ecomonic%20squeeze.png" width="200" /></a></div></div><b>The largest negative impact to the index comes from the economy. The industry is clearly feeling the tightening.</b> While sales results for the high-end of the wine business are still buoyant post-recovery using the separate SVB Premium Peer Group Platform as the source, inflation that started with supply chain disruption and heavy demand of goods during lockdowns has spread to fuel, food, rent, glass, and other commodities. That plays into increased shipping costs as well. With inflation hitting all producers and few if any able to pass on those cost increases, we are seeing lower net margins in the business this year. </div><div class="separator" style="clear: both; text-align: left;"><br /></div><div class="separator" style="clear: both; text-align: left;">Increasing interest rates with no Fed slowdown on the horizon, along with a slowing China market related to COVID lockdowns, and geo-political instability particularly in Europe is dragging down world economies and the combination is leading to a very strong dollar. While a strong dollar sounds good if you say it fast, what it really means is imports get a leg-up against domestic producers and that could be a piece of the <span style="color: #cc0000;"><b>-34.64</b></span> reading for substitutes.</div><div class="separator" style="clear: both; text-align: left;"><br /></div><div class="separator" style="clear: both; text-align: left;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgUEK9Y-pPojjohepz3h5PKONaRxVeKUAwrOrwKY2URUDQKCQ8hOrtjmH3zaCg58J4a8QKnQtATuEBynW122SJFck5ZnQz2FKXvqcFyXm-jVYSLkY8wqb_W8pSmyQZ45Jr58dXiAgV9dC00jtGsE07HZXCvk83jQN1anHHU3nbVLYUDWRHNId-xwqHu/s960/Cocktail.png" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="640" data-original-width="960" height="108" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgUEK9Y-pPojjohepz3h5PKONaRxVeKUAwrOrwKY2URUDQKCQ8hOrtjmH3zaCg58J4a8QKnQtATuEBynW122SJFck5ZnQz2FKXvqcFyXm-jVYSLkY8wqb_W8pSmyQZ45Jr58dXiAgV9dC00jtGsE07HZXCvk83jQN1anHHU3nbVLYUDWRHNId-xwqHu/w161-h108/Cocktail.png" width="161" /></a></div>But substitutes are more than foreign wine. <b><span style="color: #990000;">In a total US wine business that is closing in on negative volume growth for the first time since 1994, substitutes become your neighbors winery.</span></b> But certainly cocktails and high-end spirits play a larger role in that bleak index reading. Other data we have from SipSource shows that spirits and craft cocktails started to show strong growth during reopening, while wine growth by volume turned negative when restaurants started to reopen. There is more here - such as consumers younger than 65 drinking more across categories that we will need to unpack in the report.</div><div class="separator" style="clear: both; text-align: left;"> </div><div class="separator" style="clear: both; text-align: left;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgffhrxYcJtDb4CwnMCQWzKhVIZlX4JmZJzBric0yp-1cVrV1X7Rp-m3ALBzhhxv29jWmEjElAfLBPuMqpMsi9UhJXKtEJfECx-suGwv6d68IFIg3r1yrSY6OkS5ySEzVsirCSySgBTlnSF0LIjYJhLGIoJ7psJ8WCkG0HZqTmWhm78C5g0CaH2pgAR/s718/Were%20hiring.png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="340" data-original-width="718" height="84" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgffhrxYcJtDb4CwnMCQWzKhVIZlX4JmZJzBric0yp-1cVrV1X7Rp-m3ALBzhhxv29jWmEjElAfLBPuMqpMsi9UhJXKtEJfECx-suGwv6d68IFIg3r1yrSY6OkS5ySEzVsirCSySgBTlnSF0LIjYJhLGIoJ7psJ8WCkG0HZqTmWhm78C5g0CaH2pgAR/w177-h84/Were%20hiring.png" width="177" /></a></div>Labor, which led the negative response indicators last year comes in at <span><span style="color: #cc0000;"><b>-29.82</b></span>. The relative number is a strong negative no matter how it's viewed though. </span>Labor is more expensive and quality of staffing harder to find since businesses reopened post-lockdowns, particularly in areas where the cost of housing is high. For agriculture, immigration policy also plays a role in making field labor more scarce and driving up field labor costs.</div><div class="separator" style="clear: both; text-align: left;"><br /></div><div class="separator" style="clear: both; text-align: left;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguKMde-hAUheDIKlcLHdWc6Kfbj3yKRDx7wwq1m9Xn9ElGBikogFAi9YkdVcmTOzbiFW9X7J47o6juz8nacE_a5Vr9jhdLtBKueems2ckHSDU-_XIvwrmJtF5rDPE_LnkzExaxTzDsxSC-deGJSgcMPEtFssTi3TeT-fdWrx9q9D9hhzHpK7G2SHHH/s1600/toasting.png" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="1041" data-original-width="1600" height="130" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguKMde-hAUheDIKlcLHdWc6Kfbj3yKRDx7wwq1m9Xn9ElGBikogFAi9YkdVcmTOzbiFW9X7J47o6juz8nacE_a5Vr9jhdLtBKueems2ckHSDU-_XIvwrmJtF5rDPE_LnkzExaxTzDsxSC-deGJSgcMPEtFssTi3TeT-fdWrx9q9D9hhzHpK7G2SHHH/w200-h130/toasting.png" width="200" /></a></div><b>On the positive side of the ledger, the wineries responding to the survey so far report good consumer demand with an index indicator of +18.67.</b> It is interesting to hear about all the issues in labor availability and associated cost increases, higher cost of inputs like glass and fuel and pressure from imports and other substitutes - and still see that consumer demand is good. That is one of those indicators where you have to know who is responding and in this case, it's the premium wineries above $15 bottle price who make up the larger part of the wine industry. The lower price brands wouldn't be so quick to put consumer demand at the top of their list, given the butt-kicking wine has taken against spirits with restaurant reopening.</div><div class="separator" style="clear: both; text-align: left;"><br /></div><div class="separator" style="clear: both; text-align: left;">One of the factors that makes premium wine recession-resistant is the consumer base which generally speaking is white-collar with family incomes above $100,000 annually. Particularly for the higher earners, the lock-downs created a savings rate that was unprecedented. Even today, <b><span style="color: #990000;">the top 10% of wage earners still have 2 trillion dollars of savings</span></b> ready to buy discretionary luxury goods, and those dollars have been burning holes in consumer pockets, explaining part of the positive consumer demand reading for wine.</div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: left;">We will go into more depth on this when we release the Annual SVB State of the Industry Report in middle-January.</div>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.com0tag:blogger.com,1999:blog-941731830705031230.post-15101440837518165942022-06-12T13:00:00.003-07:002022-06-13T07:21:20.352-07:00Where Is the DTC business headed?<p> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjyCn8FhwlGvk-AueywiWlxDlOb1whebJS8082Nd6Sp72PkBimqhT7Dox3OgqTQMoXsSFIu1IbOjSo756pbWYVxPdfDQK-SybdeiM4w2SWi99JzxurtudoB4p0t8esOkZH0jjOsjAFU41X1lEeKy-eIPMgir7YcNMIIELD9nMuxBDGZC3lIdtnpSuV8/s1369/Walkin%20vs%20By%20Appointment%20Temp.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="856" data-original-width="1369" height="250" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjyCn8FhwlGvk-AueywiWlxDlOb1whebJS8082Nd6Sp72PkBimqhT7Dox3OgqTQMoXsSFIu1IbOjSo756pbWYVxPdfDQK-SybdeiM4w2SWi99JzxurtudoB4p0t8esOkZH0jjOsjAFU41X1lEeKy-eIPMgir7YcNMIIELD9nMuxBDGZC3lIdtnpSuV8/w400-h250/Walkin%20vs%20By%20Appointment%20Temp.png" width="400" /></a></div><br /><p>The answer to the blog title is the point of the Annual SVB Direct to Consumer Videocast, which is taking place this coming Wednesday, June 15th. </p><p><b>You can sign up</b> to receive the SVB DtC Report, receive a link to the live presentation, and a post-conference link to the videocast replay ----> <b>[<a href="https://events.svb.com/2022dtcwinereportvirtualevent?utm_source=robs_blog" target="_blank">HERE</a>.]</b> </p><p><span></span></p><a name='more'></a>The past two years have presented us with dislocation and change that needs unbundling. With an expert live panel (below) we will take 90 minutes to discuss the current state of the Direct to Consumer Wine Business, and offer our views on what's coming next: <p></p><p></p><ul style="text-align: left;"><li>Internet sales from wineries grew by 500% when the Nation locked down in 2020. Internet sales are holding steady since the reopening. That is a permanent consumer change. </li><li>The change to by-appointment tastings for years was resisted by many in the wine community. There was always the fear that moving away from the walk-in model would reduce sales opportunities. But regional mandates required tasting room appointments through the restricted COVID business era and that by-appointment model has now proven out. The headline slide to me says that we’ll never revert to a pure walk-in model again.</li><li>Labor is a huge problem for everyone, but hospitality suffers more than most industries. What can be done to solve for higher salaries and reduced staff? What is that doing to consumer experiences?</li><li>Technology is rapidly making its way deeper into this still-cottage and slow-to-evolve industry. Club memberships before COVID were exclusively gained from tasting room interactions. Yet today, as you can see in the nearby slide, an average of 17% of new memberships are now being attracted using digital means - away from the tasting room. Larger wineries are doing the best job so what can be learned from the approach of larger wineries?</li></ul><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfGw5aQg_pOUZLbQ9qQ-2nyZGbMST8nr3n_C7MRzO0J5dQA56jRUDoDq6sqg5RdMZS4alhsfU7sUY9Kn4jt2QsFVLgQDj91j5ti6ZrkXNoBl07YHe1R6gvEUgBz9WBv26jD3gLECn3LkhRlgQU7gNIFocydYATk6e8uK5Jae9BHXANTPAW4tooMQkG/s1244/Digital%20Memberships%20Temp.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="817" data-original-width="1244" height="263" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfGw5aQg_pOUZLbQ9qQ-2nyZGbMST8nr3n_C7MRzO0J5dQA56jRUDoDq6sqg5RdMZS4alhsfU7sUY9Kn4jt2QsFVLgQDj91j5ti6ZrkXNoBl07YHe1R6gvEUgBz9WBv26jD3gLECn3LkhRlgQU7gNIFocydYATk6e8uK5Jae9BHXANTPAW4tooMQkG/w400-h263/Digital%20Memberships%20Temp.png" width="400" /></a></div><ul style="text-align: left;"><li>Average tasting room purchases have yet to return to pre-COVID measures but total DTC sales are now exceeding 2019 results.</li><li>Net growth rates in clubs averaged an impressive 44% in 2021, but that was offset by attrition of almost 20%. What practices can we employ to reduce attrition and reduce acquisition costs?</li><li>With all the hype around virtual tastings in 2020, it’s been interesting to watch the rush to the exits on that approach in 2022. Reopening the tasting rooms and drawing increased customer interaction there means there should be a move away from digital tastings, but have we gone too far in abandoning a new and successful channel?</li></ul><div><b>This videocast will be the first live studio broadcast since January 17th, 2020, and I have to say, I'm really looking forward to returning to that in-person live format.</b> </div><div><br /></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://events.svb.com/2022dtcwinereportvirtualevent?utm_source=robs_blog" style="margin-left: 1em; margin-right: 1em;" target="_blank"><img border="0" data-original-height="89" data-original-width="364" height="49" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhkbFh_1aRbt8DWD3TQXx9b2cSqi8CpNMm3ngDojpWCiREz1Bc3NDSdyiON3eAPg09oGJ1Qp3SEUv5p4WdOD6H_B1x6DAtSCwqpzDvVsE0sJSsiKPWWo72xYpURw8o6wjfLiEBk1ZxRLMdHtQ3OaSsb_AjteH5DlhlL1ihsgQY7qOsU2SJAPkaybgEr/w200-h49/Sign%20Up.png" width="200" /></a></div><br />Joining me are: </div><div><br /></div><div><b>Jessah Diaz, Marketing Manager, National Brands & DTC, Rutherford Wine Company</b></div><div><b><br /></b></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEhJks-SpCFuSN4rBT2qyNEIbM4_mPLK0xgXmACqYGoM6HpH9nVUfPt1sokYEaJdpBHFqsz8AUpddG3gMdCULDoqrk1t_zqHtItDKwVJIGGtg_TE68XdTSlqXavtEyMmtcp9lZzjTQSTkWm9QuQUnuxDFXACZBiBoRIrbP_EHWXisSEa5KO2pZ4IDP-g" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img alt="" data-original-height="272" data-original-width="267" height="200" src="https://blogger.googleusercontent.com/img/a/AVvXsEhJks-SpCFuSN4rBT2qyNEIbM4_mPLK0xgXmACqYGoM6HpH9nVUfPt1sokYEaJdpBHFqsz8AUpddG3gMdCULDoqrk1t_zqHtItDKwVJIGGtg_TE68XdTSlqXavtEyMmtcp9lZzjTQSTkWm9QuQUnuxDFXACZBiBoRIrbP_EHWXisSEa5KO2pZ4IDP-g=w197-h200" width="197" /></a></div>Jessah is the Marketing Manager of National Brands and DTC at <a href="https://rutherfordwine.com/" target="_blank">Rutherford Wine Company</a> where she's responsible for developing marketing assets and campaigns for the retail market, as well as digital assets and programming for eCommerce and DTC. Her prior experience at Pernod Ricard USA, and in wholesale distribution at Southern Glazer’s Wine & Spirits, informs her work today and provided an early start with a diverse portfolio of brands in both a DTC capacity, as well as in retail markets. Prior to working in the wine and spirits industry, she worked in the competitive and fast-paced world of sports sales, marketing, and events for the Madison Square Garden Company. Jessah is a WSET Level II graduate with Distinction, and she is currently studying for the WSET Level III.</div><div><br /></div><div><b>Paul Mabray, CEO, Pix</b> </div><div><br /></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEhB0midd8VFZCs3B0e0rGP5DRvxkLCghRLa3axIYuhYAv9meMO_nwyclRES6N6LNQZRXXyAj-fiYALMSRTMXqaydDpXhifndJZxhqkCgN7fLf4FgbVhSp2Qavy7-NsQ7gY3rrUm5SZ_9lspIUdnVYmhvw37G0X4xHsgt8mcFd2MkPkFAKyw2CDuEt1f" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img alt="" data-original-height="494" data-original-width="496" height="195" src="https://blogger.googleusercontent.com/img/a/AVvXsEhB0midd8VFZCs3B0e0rGP5DRvxkLCghRLa3axIYuhYAv9meMO_nwyclRES6N6LNQZRXXyAj-fiYALMSRTMXqaydDpXhifndJZxhqkCgN7fLf4FgbVhSp2Qavy7-NsQ7gY3rrUm5SZ_9lspIUdnVYmhvw37G0X4xHsgt8mcFd2MkPkFAKyw2CDuEt1f=w196-h195" width="196" /></a></div><div>Paul Mabray has been a powerful change agent in the wine industry for over twenty years. He has been at the forefront of all major digital trends for the wine industry, working with WineShopper.com and Wine.com when they entered the wine-digital space. He founded two companies that significantly changed the digital US wine landscape, first by introducing winery e-commerce with Inertia Beverage Group which transformed into WineDirect.com pioneering winery e-commerce, and then again by introducing social media and social customer relationship management with VinTank.com. Paul now leads the world’s first wine discovery platform, Pix (<a href="http://pix.wine">pix.wine</a>). With one of the largest online wine selections in the world, Pix helps consumers discover and efficiently purchase the wines they are searching for.</div><div><br /></div><div><div><b>Leah McNally, Senior ECommerce Manager, Ste. Michelle Wine Estates</b></div></div><div><br /></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEh71LeFqF8DWbPzAXE4kwoUerhUz1j70c2uWF4jGAuSR7mDsQzwqrJagdvd7ny5DiQcdSTXLom4zrg1ufEImQ1hODVa-rUg1_Pdfrh9QKzj_by-tTa-dw9JqtLBblyxTgEBM6AFsSJoowLw3z_ZQ11NniwNVPW3R8I28sjVmeyz_exCs11d_C3HBELa" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img alt="" data-original-height="524" data-original-width="525" height="189" src="https://blogger.googleusercontent.com/img/a/AVvXsEh71LeFqF8DWbPzAXE4kwoUerhUz1j70c2uWF4jGAuSR7mDsQzwqrJagdvd7ny5DiQcdSTXLom4zrg1ufEImQ1hODVa-rUg1_Pdfrh9QKzj_by-tTa-dw9JqtLBblyxTgEBM6AFsSJoowLw3z_ZQ11NniwNVPW3R8I28sjVmeyz_exCs11d_C3HBELa=w189-h189" width="189" /></a></div>As a sixteen-year veteran of winery DTC sales, Leah today manages the DTC eCommerce and email marketing for Ste. Michelle Wine Estates brands in Washington, Oregon, and California. She earned an MBA in Wine Business from Sonoma State University in 2011. In 2015 Leah received a Ste. Michelle Wine Estates Cheers Award in the Energizing Customers category for her contribution to outstanding results in the DTC channel. Leah enjoys serving as a mentor for women in business, especially in the creative and handmade categories, and as a small business owner selling online, at local shows, and as the host of <a href="https://vintagelandiamarket.com/" target="_blank">Vintagelandia Market in Napa</a>.</div><div><br /></div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzM9NcZyl66_EqRxRI9FSpyJx4O3q28MmD8LaojvXU4d7c0mNx4soRIpj31ClsAszhGx_ztMr5P7w8xmLVINrwmP11j-K2Kas0qDrKOItDUdrMlUzwLmVgzhXbXJfM8ItKHaMomEdJC_agiT6Z82qi0IhML-ZiI52OuGDAQpnKRC_ytNuB-RvkfEFc/s600/Pagebreak%20Temp.png" style="margin-left: 1em; margin-right: 1em;"><span style="color: #990000;"><img border="0" data-original-height="71" data-original-width="600" height="38" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzM9NcZyl66_EqRxRI9FSpyJx4O3q28MmD8LaojvXU4d7c0mNx4soRIpj31ClsAszhGx_ztMr5P7w8xmLVINrwmP11j-K2Kas0qDrKOItDUdrMlUzwLmVgzhXbXJfM8ItKHaMomEdJC_agiT6Z82qi0IhML-ZiI52OuGDAQpnKRC_ytNuB-RvkfEFc/s320/Pagebreak%20Temp.png" width="320" /></span></a></div><br /><div style="text-align: center;"><b><span style="color: #990000;">Gather your teams in a conference room around laptops, and share the presentation together. Let this event encourage a real-time discussion with your direct-to-consumer staff.</span></b></div><div style="text-align: center;"><b><span style="color: #990000;"><br /></span></b></div><div><div style="text-align: center;"><b><span style="color: #990000;">Please promote the videocast on your social media channels.</span></b></div><div style="text-align: center;"><br /></div></div><div style="text-align: center;"><br /></div></div><p style="text-align: center;"><br /></p>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.com0tag:blogger.com,1999:blog-941731830705031230.post-43922027494542969432022-03-06T15:46:00.006-08:002022-03-06T15:49:39.602-08:00Internet Sales are dramatically higher, but how do we know?<p style="text-align: right;"> </p><div style="clear: both;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEj6bHOOc6VUKk4Z4Nhgh9WyqHqX807rEjlnl92Smk33YCVbS4Wq3BDz20e9fPpGQNl-ksZeuEKM4tMrc84dPvkbPI9U91x2McEWj1Kd6EiHE7Wu6MA-VZv939XHWg1v4T8Z7TNIBF2vOtW3lIJ2W-nZAPJtthTvkePhhbD4DzFTRRTQ80ReS0O5NGH4=s866" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="866" data-original-width="812" height="452" src="https://blogger.googleusercontent.com/img/a/AVvXsEj6bHOOc6VUKk4Z4Nhgh9WyqHqX807rEjlnl92Smk33YCVbS4Wq3BDz20e9fPpGQNl-ksZeuEKM4tMrc84dPvkbPI9U91x2McEWj1Kd6EiHE7Wu6MA-VZv939XHWg1v4T8Z7TNIBF2vOtW3lIJ2W-nZAPJtthTvkePhhbD4DzFTRRTQ80ReS0O5NGH4=w423-h452" width="423" /></a></div><div class="separator" style="clear: both; text-align: center;"><br /></div><h3 style="text-align: left;"><span style="color: #b45f06;">Selling Wine in a Pandemic</span></h3><div style="text-align: center;"><br /></div><div>What an insane past few years! But doesn't it feel wonderful to be moving into spring and at the same time into the endemic phase of this crisis? With fewer mask mandates now, maybe we'll be able to smell the spring flowers! But before we linger too long on the warmer days ahead, we still have some work to do. So let me take you back to the start of this crisis in 2020 when the COVID case numbers began picking up. </div><div><br /></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEg1Qr_klYRpZ3cSu9HyyfZ310z9MGR3tGi8smpY2MO2vheEXsSKnZPArkWmen64QYCyBRBBzQtPI_q7p-SwEvLxbLAEk8jvb5uSHS6uc-BecmOxsA6uxzGKZaILoMcfJiPy7q8sNumt7XKOGR8u10R5PCobutHJa3I2xol0xPED_Qj8PDP_fN1BZZ-8=s825" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="516" data-original-width="825" height="200" src="https://blogger.googleusercontent.com/img/a/AVvXsEg1Qr_klYRpZ3cSu9HyyfZ310z9MGR3tGi8smpY2MO2vheEXsSKnZPArkWmen64QYCyBRBBzQtPI_q7p-SwEvLxbLAEk8jvb5uSHS6uc-BecmOxsA6uxzGKZaILoMcfJiPy7q8sNumt7XKOGR8u10R5PCobutHJa3I2xol0xPED_Qj8PDP_fN1BZZ-8=s320" width="320" /></a></div>At that point in time, I wrote a piece called <a href="https://svbwine.blogspot.com/2020/03/selling-wine-in-pandemic.html" target="_blank">Selling Wine in a Pandemic</a> which is one the most-read pieces I've posted. I wrote it on March 15th, 2020 - a date that is etched in my mind and probably yours if you live in California. </div><div><br /></div><div>If you don't recall, that was the date <a href="https://apnews.com/article/california-virus-outbreak-wineries-gavin-newsom-ca-state-wire-92a415c8b4ffddb7541ebd1a39bb7353?" target="_blank">Governor Newsom first issued the shelter-in-place orders</a> and closed tasting rooms, restaurants and bars. I finished writing that blog on March 15th in the morning, but by late afternoon, I had to go back and update it when news of the lock-downs came out. </div><span><a name='more'></a></span><p>I made several suggestions within that post on sales and marketing, including the following:</p><div><blockquote><i><u>Use your marketing imagination and messaging to get consumers to buy online.</u> It's a less expensive way to sell. And while you're at it, see if you can get new club signups in the process. There are many ideas to consider that may drive new behaviors including coupons, discounting, free tickets to future events, and gift cards that could be used on the next purchase. <b><span style="color: #b45f06;">Figuring out how to direct people to online sales will continue to pay off even after this situation fades from the news.</span></b></i></blockquote></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEhCKprGp_1aC4Bjmg4Fook_riKKlhV7EKgUbtWwfnNcUexVUk6amaTmY_5N_NdQS3SfnlLR4yHvueafOT4y7W0qOgNKU7LdmkRAknCnKmwtGdlPy9Ogvqfno0FmbkYsk6HViHEEZNYe3CIx7NFEBL2ClDh4SXiBWgOpH4zVlFgsLQUah7oUohmKro4k=s874" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="233" data-original-width="874" height="85" src="https://blogger.googleusercontent.com/img/a/AVvXsEhCKprGp_1aC4Bjmg4Fook_riKKlhV7EKgUbtWwfnNcUexVUk6amaTmY_5N_NdQS3SfnlLR4yHvueafOT4y7W0qOgNKU7LdmkRAknCnKmwtGdlPy9Ogvqfno0FmbkYsk6HViHEEZNYe3CIx7NFEBL2ClDh4SXiBWgOpH4zVlFgsLQUah7oUohmKro4k=s320" width="320" /></a></div>That suggestion proved to be good advice as <b><span style="color: #b45f06;">online sales that languished at 2% to 3% of total direct sales before the pandemic, exploded upward to 16.2% of direct sales at the start of 2021 (headline slide)</span>.</b> And by the end of 2021, I was able to report that average sales increased 21% over 2020, while internet sales managed to maintain their relative strength as a percent of sales.</div><div><br /></div><div><u>That means total internet sales were also dramatically up in 2021.</u> I also know that based on this newfound success, wineries are increasing their investment in e-commerce, and are discovering new strategies to pull club signups from that channel. Today, the tasting room isn't the only place to gain new club members. How do I know all of those facts?</div><div><br /></div><h4 style="text-align: left;"><span style="color: #b45f06;">Successful wineries benchmark their performance!</span></h4><div><div><br /></div>I'm able to diagnose what's happening because each year, Silicon Valley Bank partners with wineries across America to conduct a survey. We now have over a decade of data and information from which we can report nominal statistics and decipher trends.</div><div><br /></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEi8ckP4jWAvc9KCjnUGEHrofvyVfhy6q6y_pispBsK99XDAsJZvwIn6MBLuKHy-iOo56iV4qzPDiN22SYIU6I32re9Oaw3nwc4Wj71aR4-eFfsCVz2hsgtcPYQ549qPO43zZO4XS4-0vcNlg4kOd63PVsXKv3Tym-HT0rH_EqXaJ876m22OrB-kVW8Q=s558" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="350" data-original-width="558" height="201" src="https://blogger.googleusercontent.com/img/a/AVvXsEi8ckP4jWAvc9KCjnUGEHrofvyVfhy6q6y_pispBsK99XDAsJZvwIn6MBLuKHy-iOo56iV4qzPDiN22SYIU6I32re9Oaw3nwc4Wj71aR4-eFfsCVz2hsgtcPYQ549qPO43zZO4XS4-0vcNlg4kOd63PVsXKv3Tym-HT0rH_EqXaJ876m22OrB-kVW8Q=s320" width="320" /></a></div>We already know that wineries had a remarkable year of success in 2021 - particularly if not almost exclusively in the premium segment. We know the mix of wine consumers is changing with new younger consumers possessing different values and financial capacity, replacing the boomers at a rate of 10,000 each day. </div><div><u><br /></u></div><div><u>We know wineries moved to by-appointment models in the tasting room during the pandemic, and have stuck with that choice</u> (nearby slide), and that some wineries had tremendous success in 2021. But what happened within the sales channels? Where is the opportunity between online, wholesale, export, events, phone, club, and Zoom sales?</div><div><br /></div><h4 style="text-align: left;"><span style="color: #b45f06;">The 2022 Direct to Consumer Survey is Open now through March 18th</span></h4><div><br /></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEhzYLGeOyzlPUcXKHwQDaxNXaFLW-4WTgMckRPCPlHyUhnCpZSHbBscxzITg7HgUeDnOS98VX8Vh_aSKtkUf2OfxlMMIp2gBPkSS7I7gsw_LrOnLUcU2uGG99vTARAtUK5CVXrOeNLBEIF4nBp0-TchNzO00rUW49WrQXYM5iTF32DEnDrx4pvRp4mM=s1350" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="900" data-original-width="1350" height="213" src="https://blogger.googleusercontent.com/img/a/AVvXsEhzYLGeOyzlPUcXKHwQDaxNXaFLW-4WTgMckRPCPlHyUhnCpZSHbBscxzITg7HgUeDnOS98VX8Vh_aSKtkUf2OfxlMMIp2gBPkSS7I7gsw_LrOnLUcU2uGG99vTARAtUK5CVXrOeNLBEIF4nBp0-TchNzO00rUW49WrQXYM5iTF32DEnDrx4pvRp4mM=s320" width="320" /></a></div>This time of year, I get my hands dirty by surveying U.S. wineries and digging into the direct-to-consumer channel to produce benchmarks so the industry can make informed decisions and answer questions like the last one above and many more.</div><div><br /></div><div><a href="https://svb.co1.qualtrics.com/jfe/form/SV_6fArTiC5Yp8dERU?source=rmcm" target="_blank"><b><span style="color: #cc0000;">The 2022 DtC survey is now open and will close on March 18th.</span></b></a> I hope you will join the other 600 to 1,000 U.S. wineries and avail yourself of this opportunity to improve your company.</div><div><br /></div><div>In May, all respondents who complete the survey will receive high-level analysis, benchmarks, the videocast deck of slides, and the complete sanitized respondent data, anonymized of all personal and business identifying information. </div><div><br /></div><h4 style="text-align: left;"><span style="color: #b45f06;">You Can't Get The Survey Results or Presentation Slides Without Participating</span></h4><div><br /></div><div>Only survey participants will get this information. It can't be purchased. At the end of May, we will broadcast a two-part videocast to the industry and go over the new findings with other industry experts, but we will not be releasing the slides from the show - unless you participated in the survey.</div><div><div style="clear: both;"><div style="clear: both;"><br /></div><div style="clear: both;"><span><b>All of our efforts are done on a gratis basis to help the industry make decisions, but it's a partnership with you.</b></span><u> <a href="https://svbwine.blogspot.com/2019/10/is-this-last-svb-industry-survey.html" target="_blank">If we don't get survey responses, we can't produce this industry resource</a>.</u> So please make this a personal goal to participate. The choice you make regarding your participation in the survey will have an impact both on your operation and the industry as a whole.</div></div><div><br /></div><div style="clear: both;">This year the survey has between 24 and 33 questions, depending on your business model. It should take you between fifteen to twenty minutes to complete and even less if you are a little prepared. If you would like to see the questions in advance, you can <a href="https://lp.svb.com/rs/610-KAK-266/images/Annual%20Direct%20to%20Consumer%20Survey%2002%2024%202021.pdf?mkt_tok=eyJpIjoiT0RJeU1tWmhOekkzTkRKaSIsInQiOiJrWUpSbklLQXVNUHIrWEVOOWwyQmdGd2lmc2tTUTNLOHc2UEI0cWgzZDBXcW41Y3VtamYzVGNKNWVGNndCSDkxeXc3Smw3Y1o2ZCtzSFFEdGYwWTBRNDdYRkhhTzdnZVdYNThzc2h5b1FZSFkrZlBiZSswV3BIOGZCR3grQ0FJMiJ9" target="_blank">download and print them here.</a></div><p>Are you ready to participate in the survey this year?</p><p><br /></p><div class="separator" style="clear: both; text-align: center;"><a href="https://svb.co1.qualtrics.com/jfe/form/SV_6fArTiC5Yp8dERU/?source=rmcm" target="_blank"><img alt="" border="0" data-original-height="54" data-original-width="173" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg553ml06a9AvwbwGjJ4bAE_BIBfR3yHJ0ilpH_0MiVXbUHM49KFSZWkDhAX7RA-qQRO3puWTGoeoZgBZOFYHRUzgL_1cDAF9tmKyc0_2b_23dh38udSLV7qKd9DT266_vSmiL7QkjHRqg/s1600/Take+the+Survey+Temp.jpg" /></a></div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPgZB6Y0Cg4oSUrjceI-8pH5QuGQOf_zZ4WAXnJS6UrOw2Cu8vGoRGeM244X5mpL4DRb1xAKn5wzi6wa-pIJZv9bLhyphenhyphen71DCS_59EjUFz38zhZ4iaa4CQ3-Q6TRSEMg2-IW_J8qIE02IAg/s1600/Pagebreak+Temp.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="71" data-original-width="600" height="37" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPgZB6Y0Cg4oSUrjceI-8pH5QuGQOf_zZ4WAXnJS6UrOw2Cu8vGoRGeM244X5mpL4DRb1xAKn5wzi6wa-pIJZv9bLhyphenhyphen71DCS_59EjUFz38zhZ4iaa4CQ3-Q6TRSEMg2-IW_J8qIE02IAg/s320/Pagebreak+Temp.png" width="320" /></a></div><p><br /><u><span style="color: #990000;"><b>P</b></span><span style="color: #990000; font-weight: bold;">lease promote this post on your favorite social media platform</span></u><b>,</b> or even better - please forward <a href="https://svb.co1.qualtrics.com/jfe/form/SV_6fArTiC5Yp8dERU/?source=rmcm">[this link]</a> to your winery colleagues and ask them to participate. It does take everyone's effort to make this outreach a success.<br /><br />If you would like your AVA to participate, we will also send the participating AVAs free regional benchmarks for their own use, presuming we have a statistically significant sample size to analyze.</p></div></div>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.comNapa, CA 94559, USA38.22965 -122.322089411.108032041058202 -157.4783394 65.3512679589418 -87.165839399999982tag:blogger.com,1999:blog-941731830705031230.post-80771182365871528782022-02-27T17:52:00.009-08:002023-05-01T11:00:25.033-07:00There is good news to talk about!<p> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiW8UpqQrB-NSEtwYTtYDVaJq1BgJKlwYtz2CSSaVP304CPRyjgsBXmzXSCazfilsmuON5UprDBhH6_WpHXKUtTe06X2ENG3SoEPk02m7C5y031s-P6Ej1WGND6rFkmA2ts2zi_AvVn1BxLJHY4pjJgiaSEgVtffQxxQv5I1Mz4nBBHI8Vfodn85PPe=s8192" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="8192" data-original-width="5464" height="400" src="https://blogger.googleusercontent.com/img/a/AVvXsEiW8UpqQrB-NSEtwYTtYDVaJq1BgJKlwYtz2CSSaVP304CPRyjgsBXmzXSCazfilsmuON5UprDBhH6_WpHXKUtTe06X2ENG3SoEPk02m7C5y031s-P6Ej1WGND6rFkmA2ts2zi_AvVn1BxLJHY4pjJgiaSEgVtffQxxQv5I1Mz4nBBHI8Vfodn85PPe=w266-h400" width="266" /></a> </div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: inherit;">Last week I had a call from a friend in the wine business asking for a meeting to discuss the <a href="http://www.svb.com/wine-report" target="_blank">Annual SVB State of the Wine Industry Report</a>. I had no real idea what he was going to say.</span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: inherit;"><br /></span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: inherit;">When we met, he told me he appreciated what I presented in the report but didn't like the stories he'd read in the news. He thought some were overly critical and missed the positive things happening in the wine business. He asked me if I should be more positive during interviews to cast a better light on the business.</span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: inherit;"><br /></span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: inherit;">From his perspective, the industry is doing really well. That's because he sees the industry from the vantage point of a business that is hitting the cover off the ball. And to his view, a very large part of the premium wine business reported 2021 was one of, if not their best year ever!</span></div><div class="separator" style="clear: both; text-align: left;"><span><a name='more'></a></span><span style="font-family: inherit;"><br /></span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: inherit;">That is clearly good news and if you are one of those, <b>maybe some of the stories covered by the press seem too negative. Some may agree with him and believe the Report dwells too much on the challenges we face.</b> </span><span style="font-family: inherit;">Of course, I don't write the press stories and my friend acknowledged that. When you give an interview, at times it can be spun to generate a little controversy to generate clicks. </span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: inherit;"><br /></span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: inherit;">Realistically, the press doesn't report "Everything is Great!" ever. That's not news, so they can at times magnify some perspectives over others to reinforce something controversial. Personally, with some exceptions and one who reported a virtual tornado coming, </span><span style="font-family: inherit;">I think the reporting has been pretty balanced this year:</span></div><div class="separator" style="clear: both; text-align: left;"><ul style="text-align: left;"><li><a href="https://urldefense.com/v3/__https:/www.forbes.com/sites/jillbarth/2022/01/25/the-us-wine-industry-transitions-to-2022-after-a-good-year/__;!!EF1gQw!evoKCr_ixCwJSoQfKqLN9n0cQwO3D4NT3Wt48rqsu6Ujgy-uFsChh3HWJpf1$" style="font-size: 14.6667px;" target="_blank"><span style="font-family: inherit;">The US Wine Industry Transitions To 2022 After A 'Good Year'</span></a><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEjxzSO3cARvhagjQv4-tSjcfO0zrB_3UYNx8k9p3G9QXTYUTBvedG1mCy7cGPeSKHiLBufkWf_UvAOTWxsAHzC7MXuGKK3-4cpfvNS3WgVtcnj99jOC7hmLhP8vv0yc5nY01Z8GM6jaCTU4o8TDOgVk0klpzi43lTahSOo9waMzPRfi7sSRp9LTKUGW=s4000" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><span style="font-family: inherit;"><img border="0" data-original-height="4000" data-original-width="2833" height="200" src="https://blogger.googleusercontent.com/img/a/AVvXsEjxzSO3cARvhagjQv4-tSjcfO0zrB_3UYNx8k9p3G9QXTYUTBvedG1mCy7cGPeSKHiLBufkWf_UvAOTWxsAHzC7MXuGKK3-4cpfvNS3WgVtcnj99jOC7hmLhP8vv0yc5nY01Z8GM6jaCTU4o8TDOgVk0klpzi43lTahSOo9waMzPRfi7sSRp9LTKUGW=w142-h200" width="142" /></span></a></div></li><li><a href="https://www.theglobeandmail.com/life/food-and-wine/article-the-go-to-drink-for-sharing-with-friends-is-typically-wine-though/" target="_blank"><span style="font-family: inherit;">The go-to drink for sharing with friends is typically wine, though younger drinkers think differently</span></a></li><li><a href="https://www.bkwine.com/features/more/us-wine-industry-in-2021/" target="_blank"><span style="font-family: inherit;">The US wine industry in 2021 did well or great, say many, but huge challenges are coming</span></a></li><li><a href="https://www.nytimes.com/2022/02/07/dining/drinks/wine-millennials.html" target="_blank"><span style="font-family: inherit;">The Wine Business Sees a Problem: Millennials Aren’t Drinking Enough </span></a></li><li><a href="https://www.google.com/url?sa=i&url=https%3A%2F%2Ftenor.com%2Fview%2Fairplane-its-a-twister-auntie-em-uncle-henry-toto-gif-19769602&psig=AOvVaw169G_OPD1oLkm_gYiODpWv&ust=1645567869076000&source=images&cd=vfe&ved=0CAsQjRxqFwoTCOiu7pXokfYCFQAAAAAdAAAAABAU"><span style="font-family: inherit;">Auntie Em! Uncle Henry! Toto! It's a twister!</span></a></li></ul><span style="font-family: inherit;">All that said, my friend is right that many of the good thing</span>s happening in the wine industry and covered in the report weren't fully discussed in the press, so let me reinforce some of the good news from the report.</div><div class="separator" style="clear: both; text-align: left;"><br /></div><h4 style="clear: both; text-align: left;"><span style="color: #b45f06;"> </span><span style="color: #b45f06;">The Good News without the buts</span></h4><div><br /><b>The US economy continues to impress and the amount of pent-up savings sitting in the pockets of consumers is fuel for additional wine sales this year.</b> The consumer has the capacity to buy wine. They will also have the opportunity as businesses are not fully recovered in the hospitality, restaurant, and travel industries. That continuing recovery should show up in 2022 with <a href="https://www.cntraveler.com/story/destination-weddings-are-back-and-bigger-than-ever" target="_blank">increasing wine drinking occasions</a> and higher premium wine sales.</div><div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEglruwsmsDKSORjvA8qb3nuzQHhrUyLenzlLeu5BZ9c5SV318IjWXmGHMTq4o7paB4rgZlruF3a0dulTK5ULSaati1DOCoXagqp4jtqRQhiv1QD4qKPI5PjUHxH9Ibezgz9F1-ougqj105RRi_EOv3MMezomRFu7oTlEGEynliB7-LkOXIpbkw7iAvs=s1076" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="646" data-original-width="1076" height="240" src="https://blogger.googleusercontent.com/img/a/AVvXsEglruwsmsDKSORjvA8qb3nuzQHhrUyLenzlLeu5BZ9c5SV318IjWXmGHMTq4o7paB4rgZlruF3a0dulTK5ULSaati1DOCoXagqp4jtqRQhiv1QD4qKPI5PjUHxH9Ibezgz9F1-ougqj105RRi_EOv3MMezomRFu7oTlEGEynliB7-LkOXIpbkw7iAvs=w400-h240" width="400" /></a></div></div><div><br /></div><div>The oldest millennials turn forty this year and are well into their careers and wealth formation. They are also the largest current cohort by numbers. <b>The sheer
number of these consumers moving into their forties means that the wine industry's opportunity to attract more consumers should be increasing</b>, all else being equal.</div><div><br /></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEg8ddmhzW5ec-8BL05NoNu4HPPoV6iN4eIaYbw5YIcsbFs_OQ4ggNUsOousmg83RJmMRucAkPQtqQ1kCqqMV3mXWOgzx4T13l5TOO2IwKTh8GTR9Oq9cKxqU-GEJqp8I2ZQPo9d2gZJVXnNSOwmp6Xbiz5AGJyfZrUm7xWHM3WMMQ97kKYmmvbJT4oH=s5184" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="3456" data-original-width="5184" height="133" src="https://blogger.googleusercontent.com/img/a/AVvXsEg8ddmhzW5ec-8BL05NoNu4HPPoV6iN4eIaYbw5YIcsbFs_OQ4ggNUsOousmg83RJmMRucAkPQtqQ1kCqqMV3mXWOgzx4T13l5TOO2IwKTh8GTR9Oq9cKxqU-GEJqp8I2ZQPo9d2gZJVXnNSOwmp6Xbiz5AGJyfZrUm7xWHM3WMMQ97kKYmmvbJT4oH=w200-h133" width="200" /></a></div><b>Wineries discovered many new tricks during the pandemic</b> including virtual tastings, phone sales, and curbside delivery. But perhaps the largest behavioral change came about because regional health orders often required by-appointment tastings. </div><div><br /></div><div>Wineries who have been fighting by-appointment tastings for years discovered improved average checks and a better staffing model, the latter of which is a big deal at a time when good staffing comes at a premium. <b>Wineries aren't going to retreat to the full walk-in and tasting bar model.</b> Sticking with the by-appointment model will help engagement, collection of personal information, the average sale, and club conversions.</div><div><br /></div><div>As many know, I've been saying for several years the wine industry was over-reliant on the tasting room model and there was an opportunity to find new methods to take their experience to the consumer instead of depending on the consumer to come to the tasting room. The lockdown exposed the flaw but <b>presented with the challenge, the industry countered with video customer engagement (Zoom). Some of those practices discovered in the lock-down will remain, evolve, and grow.</b></div><div><br /></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEjaJp854w_AKxBw0H_RhXtp1XnFZhz1mkHeHYvxRfA725a7YU5cYeHDcUslLN7Jc8A3iNbFMar4uFR9kC62NpMMTEMy27YZp5q28A5f1ogWmDZvlKaePWquJYp9Kbt4LqyYaK61LmT2B4hOX3H-BL2YQLMPh4fOQlOiHqXWkj1wGe4Bb9Tdyzt350bz=s618" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="361" data-original-width="618" height="187" src="https://blogger.googleusercontent.com/img/a/AVvXsEjaJp854w_AKxBw0H_RhXtp1XnFZhz1mkHeHYvxRfA725a7YU5cYeHDcUslLN7Jc8A3iNbFMar4uFR9kC62NpMMTEMy27YZp5q28A5f1ogWmDZvlKaePWquJYp9Kbt4LqyYaK61LmT2B4hOX3H-BL2YQLMPh4fOQlOiHqXWkj1wGe4Bb9Tdyzt350bz=s320" width="320" /></a></div>While many consumers initially stocked up on
everyday wines at the supermarket at the beginning of the Pandemic, they also rapidly switched to
online options. </div><div><br /></div><div>The industry is continuing to make investments and improvements in the use of digital tools. <b>Online
sales continued hot in 2021, and there is room in 2022 for wineries to expand e-commerce
and integrate that with other winery initiatives.</b></div><div style="text-align: left;"><br />Consumers who drink wine continue to show that they
prefer drinking better but less wine. That creates an <b>opportunity for the premium end of the industry and that was demonstrated in spectacular fashion in 2021</b> with growth rates for premium wineries coming in at 21%.</div><div style="text-align: left;"><br /></div><h4 style="text-align: left;"><span style="color: #b45f06;">There are 'buts.'</span></h4><div style="text-align: left;"><br /></div><div style="text-align: left;">In the spirit of the post, I am going to leave out all the potholes in the road facing us. There are issues, but... I've always been a believer in the strength and resiliency of the U.S. wine business. While we may be slow to react at times, when we are presented with a clear challenge the wine business does respond. And from that angle, any of the 'buts' are just one more opportunity for success. </div><div style="text-align: left;"><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUH2n35dZ0r5akDE442skVYNyadDPji0S6aWYOMKGeM0zI_gsGyJapBCs8JItOI9RJQgqNCQnzFhwI6fBJ8iR0qBpr3Ww86KDH74cIvYZv2zd8BRKhFbla7oxXgX1LVgUfnXx2oU53iYE/s536/Page+Break.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="94" data-original-width="536" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUH2n35dZ0r5akDE442skVYNyadDPji0S6aWYOMKGeM0zI_gsGyJapBCs8JItOI9RJQgqNCQnzFhwI6fBJ8iR0qBpr3Ww86KDH74cIvYZv2zd8BRKhFbla7oxXgX1LVgUfnXx2oU53iYE/s320/Page+Break.png" width="320" /></a></div><div style="text-align: center;"><br /></div><div><div><h3 style="clear: both; font-family: "times new roman";"><span style="color: #b45f06; font-size: large;">What's Your Opinion?</span></h3><ul style="font-family: "times new roman";"><li><span style="color: #38761d;"><b>What good news did I miss?</b></span></li><li><span style="color: #38761d;"><b>Has the news coverage about the State of the Wine Report been balanced?</b></span></li><li><span style="color: #38761d;"><b>Do you believe the industry obstacles framed up in the report are issues that we should ignore, or perhaps wait a little longer before reacting?</b></span></li></ul><b style="color: #38761d; font-family: "times new roman";">Please join this site on the top right-hand side of the page, and offer your thoughts below. I respond to everyone.</b><br /><div abp="2638" class="separator" style="clear: both; font-family: "times new roman";"><span style="color: #38761d;"></span></div><div abp="2671" style="font-family: "times new roman";"><div abp="1028"><div abp="913"><div abp="2507"><b><span abp="1488" style="color: #990000;"><span abp="931" style="color: #38761d;"><u abp="3162"><span abp="1016">Please share this post on your favorite social media platform.</span></u></span></span></b></div><div abp="2507"><b><span abp="1488" style="color: #990000;"><span abp="931" style="color: #38761d;"><u abp="3162"><span abp="1016"><br /></span></u></span></span></b></div><div abp="2507"><span style="color: #38761d;"><b>Please sign up on the <a href="http://www.wineramp.org" target="_blank">WineRAMP</a> site for continuing information on a path to promote brand wine.</b></span></div></div></div></div></div></div><p></p>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-65503966210895530192022-02-13T12:57:00.018-08:002022-02-14T13:53:37.400-08:00How much did wineries make in 2021?<p><br /></p><div><div class="separator" style="clear: both;"><div abp="1150" style="border: currentcolor;"><div class="separator" style="clear: both; text-align: center;"><div class="separator" style="clear: both; text-align: left;"><div class="separator" style="clear: both;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgt4euF-MWi94o0c4ohMuDxbrs9av3AC8GFVJjFc9QQzpYzPq429a4b-mwilXiong55a_vj9xCqhWGS9MICbimo5SweI889L6BmgxdJlmoY34mPr2PGhR0BcIuuMR-vnQvt0oPmLvRd0b45UNiZMqRbiFKqZI_lffNovgrAOWUokCduALdRw6whgAmd=s1500" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1500" data-original-width="1500" height="320" src="https://blogger.googleusercontent.com/img/a/AVvXsEgt4euF-MWi94o0c4ohMuDxbrs9av3AC8GFVJjFc9QQzpYzPq429a4b-mwilXiong55a_vj9xCqhWGS9MICbimo5SweI889L6BmgxdJlmoY34mPr2PGhR0BcIuuMR-vnQvt0oPmLvRd0b45UNiZMqRbiFKqZI_lffNovgrAOWUokCduALdRw6whgAmd=s320" width="320" /></a></div><div style="text-align: justify;"><br /></div><p class="MsoNormal" style="text-align: justify;"><span style="text-align: left;">We all became unusually preoccupied in the U.S.starting somewhere around March 15th, 2020. I don't know about you, but the picture above was how I felt at that point in time. Since then, all of our thinking and behavior has evolved in a myriad of ways, and some of that evolution is permanent. </span></p><p class="MsoNormal">I'm hopeful we are nearing the end of this queird social, economic, and health experiment. After getting sucked out of our realities by the COVID tornado, I think we are finally on the glide path that will land us in Oz. I know it won't be Kansas anymore when we lift from our comatose fog. It will be something different and probably in Technicolor. But whatever it is, it's going to be better than the last two years!</p><p class="MsoNormal">Anyway, with all the distractions since 2020, I've been remiss in posting this blog. In my defense, I thought this post probably didn't matter given the other issues we were all facing. But the smoke is clearing, the vaccines and boosters are helping, Omicron is waning, so just maybe I'll be able to shake someone's hand again without running for alcohol sanitizer.</p><p class="MsoNormal">To the point of the blog though, top-level the answer to the title question is "more than you expected."</p><a name='more'></a><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEjDI50GCxll90EgPR8lECQgDZwJa9FMUSc_HMc9z-fTHEnsGfrU15eaXk2wvR10N9LPIriLXhqe0su7n5y_SPXAccX-cdpDxQvFhp_Ccioq0yJWLvtgU65OsejLZ8wCQSCISwZycsvBpG9_-pXinuD2jMYhtAqG18jXczQhhonR_mmHsEscGEKMW-qp=s1350" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="679" data-original-width="1350" height="272" src="https://blogger.googleusercontent.com/img/a/AVvXsEjDI50GCxll90EgPR8lECQgDZwJa9FMUSc_HMc9z-fTHEnsGfrU15eaXk2wvR10N9LPIriLXhqe0su7n5y_SPXAccX-cdpDxQvFhp_Ccioq0yJWLvtgU65OsejLZ8wCQSCISwZycsvBpG9_-pXinuD2jMYhtAqG18jXczQhhonR_mmHsEscGEKMW-qp=w541-h272" width="541" /></a></div><div class="separator" style="clear: both; text-align: center;"><br /></div>I have been producing this post each year for more than a decade so the industry, media, academia, and investors can get some base-level information on the performance of the majority of wineries. I'm referring to the premium producers.<p></p><p class="MsoNormal">The chart nearby is one I use in the <a href="www.svb.com\wine-report" target="_blank">State of the Industry Report</a> and in many of my speeches. It represents a benchmark of performance for the average-sized U.S. winery.</p><p class="MsoNormal">In the chart, the green bars represent gross margin (total sales minus the cost of goods sold, divided by total sales and expressed as a percentage), and the orange line is the pretax profit margin. Pretax profit margin is calculated after deducting interest and all other expenses, except tax. The blue line is the industry sales growth rate. You can back into total operating expenses if you are interested, by adding together the pretax profit margin and the gross margin, then subtracting the sum from 100%.</p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEjij_zxRdbxhaEF_cO0K3LTWitu00N1ApzhUjLah9YeUYms3T7iQaJaCa1Mk2NINPBjSZ2UMKaplbl2lti1x8OC6l_a14o1_J69bGOYm7Vk_DYVnuAdfliSL4_aEl3GW_WYGc4Kc5XjGN8sw1UxnVUFhwqe94Wn6uAbg9_lZGyE6xuqXq1JBLxMrnWm=s6720" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="4480" data-original-width="6720" height="213" src="https://blogger.googleusercontent.com/img/a/AVvXsEjij_zxRdbxhaEF_cO0K3LTWitu00N1ApzhUjLah9YeUYms3T7iQaJaCa1Mk2NINPBjSZ2UMKaplbl2lti1x8OC6l_a14o1_J69bGOYm7Vk_DYVnuAdfliSL4_aEl3GW_WYGc4Kc5XjGN8sw1UxnVUFhwqe94Wn6uAbg9_lZGyE6xuqXq1JBLxMrnWm=s320" width="320" /></a></div><p></p><h4><span style="color: #b45f06;">COVID Business Results</span></h4><p class="MsoNormal">At the time when shelter-in-place orders were issued, premium wineries had less access to off-premise channels. The direct-to-consumer channel was the best option to make up for lost sales so many owners decided the best way to get visibility was to discount wine or give away free shipping to incentivize sales. </p><p class="MsoNormal">The strategy worked as more cases were sold in 2020 to make up for lost revenue per case, so total sales growth for 2020 was essentially flat at minus 0.6 percent.</p><p class="MsoNormal">Profitability was surprisingly strong in 2020 due to staff reductions in customer-facing jobs from COVID, reduced harvest and winemaking costs from fires and smoke, and lower overhead allocations. In addition, many wineries availed themselves of Paycheck Protection Program loans in 2020, which were forgiven both in 2020 and 2021.</p><p class="MsoNormal">Like so much in the wine business, 2021 was the opposite of 2020 in terms of business conditions and results. As businesses and tasting rooms reopened, wineries were coming off a year with small crop sizes, so they stopped discounting and refocused on the tasting room and higher-end restaurants, which were restocking. More wineries moved toward seated tastings and reservations in 2021 and as a result, the average check per customer increased. Cases sold for the average winery decreased as part of a strategy by many to stretch out vintages to cover the short 2020 year.</p><div><div><h4><span style="color: #b45f06;">Sales Behavior During Recessions</span></h4></div></div><div><div style="text-align: justify;"><div style="text-align: left;"><div><div><div><br /></div></div></div></div></div></div></div></div></div></div></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEjE5nE-ZE9IYxeazgBojefMkYKkP6AiQ0eEX86_TQLPBuzmejBugQLrZZ1Xy9ffZOhft9XUa2j782wxmKRh-d0uZ7tIuLKiQWs1u1ho3T6nyc3U4RowHxTtqvwms03Fng8hHfOet0q5xH9yu6l0vkeMAFAgrQ0HhH8b0Us5gHNVkClaYW0kr0D3u_y0=s1220" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="680" data-original-width="1220" height="288" src="https://blogger.googleusercontent.com/img/a/AVvXsEjE5nE-ZE9IYxeazgBojefMkYKkP6AiQ0eEX86_TQLPBuzmejBugQLrZZ1Xy9ffZOhft9XUa2j782wxmKRh-d0uZ7tIuLKiQWs1u1ho3T6nyc3U4RowHxTtqvwms03Fng8hHfOet0q5xH9yu6l0vkeMAFAgrQ0HhH8b0Us5gHNVkClaYW0kr0D3u_y0=w517-h288" width="517" /></a></div><div><div><br /></div><div>The past two years have foisted upon each of us what I consider the most volatile business conditions since the repeal of prohibition. And like that era, there are similarities that we can draw on today with the reopening of businesses in the U.S in 2021. </div></div></div><div><div style="text-align: justify;"><div style="text-align: left;"><div><br /></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgswCSl-D-8UEV9bBI6tH1yYkuf2hEEOQWx_iyqRZw7jyyZ_Qm7BQRvUyx9RT8mLIxQuYWrqfdmWDR8ciFHbTXsJgz72-GAsx3loSOwKzcpR3O-JEBFfChk64qN2APdaiUJDAJwaJIYPOKMEZ-lRI31zaRvjxo8O-D9bctAOVmiBbxcXwVPPBigQ4Gn=s8192" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="8192" data-original-width="5497" height="320" src="https://blogger.googleusercontent.com/img/a/AVvXsEgswCSl-D-8UEV9bBI6tH1yYkuf2hEEOQWx_iyqRZw7jyyZ_Qm7BQRvUyx9RT8mLIxQuYWrqfdmWDR8ciFHbTXsJgz72-GAsx3loSOwKzcpR3O-JEBFfChk64qN2APdaiUJDAJwaJIYPOKMEZ-lRI31zaRvjxo8O-D9bctAOVmiBbxcXwVPPBigQ4Gn=s320" width="215" /></a></div><div>The nearby slide is from the SVB Peer Group Database that agglomerates reviewed and audited financial statements of premium wineries.* Within, you can see repeating patterns during recessions that should partially indicate what happens next for the wine business this year.</div><div><br /></div><div>When we experience a recession, sales growth rates fluctuate wildly with dramatic swings down when business conditions are difficult, and then equally dramatic swings up when conditions ease. </div><div><br /></div><div>It is typical at the front of recessions that fearful consumers stop buying for a short time while they collect their thoughts. While doing so, consumers become savers instead of spenders. That is what happened with wine sales during the Tech Recession and the Great Recession. </div><div><br /></div><div>With any of the demand shocks we've lived through, we've seen consumers holding tight to their money, pulling back on retail purchasing, which in turn cause wine retailers to slow their ordering. With lower wine sales, wholesalers slow their buying from wineries. Demand is still there, and when fear subsides consumers are back buying more which requires restocking the supply chain, driving up sales for a time.</div><div><br /></div><div>If prior patterns hold to form, by the end of 2022, we will see the supply chain restocked which will remove those one-time sales. Sales growth will moderate and start to trend lower toward the mean. Certainly, the huge smoke-impacted short vintage of 2020 which will be in the market during 2022 will play a role in lower volumes. But the largest impact will be losing most of the one-time benefit of restocking.</div><div><br /></div></div></div></div></div><div abp="1131" style="border: currentcolor;"><div class="separator" style="clear: both;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEhLi4mXNFTSQCAz8uJAsPL-rSEmL5ld6zLhVf0cbGaCxBo1s8vWKptwD_fFGPpPDrlAIoWYuyTbbR8GJPjSl_nrZ-9sboSSd3vFZTfAFM9T8jNi0FSsmGZOHeL38ce93sbERmWHDTfCGNA6XG8iQ1ykKvKolaL9pnd9vP2Xje6fMxJu5__OwTmYBcV5=s771" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="477" data-original-width="771" height="294" src="https://blogger.googleusercontent.com/img/a/AVvXsEhLi4mXNFTSQCAz8uJAsPL-rSEmL5ld6zLhVf0cbGaCxBo1s8vWKptwD_fFGPpPDrlAIoWYuyTbbR8GJPjSl_nrZ-9sboSSd3vFZTfAFM9T8jNi0FSsmGZOHeL38ce93sbERmWHDTfCGNA6XG8iQ1ykKvKolaL9pnd9vP2Xje6fMxJu5__OwTmYBcV5=w473-h294" width="473" /></a></div><br /><div><div>The nearby chart shows the annual average case price and average cases sold for a premium winery. While we don’t define who fits into the description of premium wineries, the chart with average cases sold and case price is a good approximation of the way we view the term. Note that average cases sold are a blend of DTC and three-tier sales, and from the same database as the other charts in this post.</div><div><br /></div><div>During the pandemic, nothing looked normal for premium wineries. In 2020, the average cases sold in our database of premium wineries increased 6.3 percent, from 38,700 cases to 41,100 cases, while the average price per case dropped 8 percent, from $262 per case to $241 per case. That once again reversed course in 2021 with higher sales dollars on lower volume.</div><div><br /></div><h4 style="text-align: left;"><span style="color: #b45f06;">Ratios</span></h4><div><br /></div><div>SVB's Peer Group Analysis platform produces ratios that we can use to benchmark for our clients. With the platform, we can really narrow down the benchmark to true peers. We can produce general ratios as well, but I've never produced those.</div><div><br /></div><div>So, for the first time, I'm presenting a limited number of ratios that are consistent with the other data on this post for academia and for those who need this kind of information for their own planning. It's a little hard to read, but you can click on the picture to get a better view.</div><div><br /></div><div style="text-align: center;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgmosi5hzoKLoD09s6xjLR68K_JPBxESYMPXCkjMuuS3D1OfXj_0f0kIlqngB9Iv1gGg5yAxwFbF1WCo1lZjR1ePEZyqf0_Pwu9FY0aaSSV6_7PP8wVjxzYwL2t02JHEL9HXRFQJinCk9DT4663vuIHHndJjMW_E1vonrC8ibkXA0CNx22pOwzo9but=s584" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="149" data-original-width="584" height="133" src="https://blogger.googleusercontent.com/img/a/AVvXsEgmosi5hzoKLoD09s6xjLR68K_JPBxESYMPXCkjMuuS3D1OfXj_0f0kIlqngB9Iv1gGg5yAxwFbF1WCo1lZjR1ePEZyqf0_Pwu9FY0aaSSV6_7PP8wVjxzYwL2t02JHEL9HXRFQJinCk9DT4663vuIHHndJjMW_E1vonrC8ibkXA0CNx22pOwzo9but=w518-h133" width="518" /></a></div><div class="separator" style="clear: both; text-align: center;"><br /></div></div></div></div></div><div><div abp="1162" style="border: currentcolor;"><div style="text-align: center;"><h4 style="border: currentcolor; text-align: left;"><span face=""verdana" , sans-serif" style="color: #b45f06;">Shoveling out Tanks</span></h4><div style="text-align: left;"><span face=""verdana" , sans-serif" style="color: #b45f06;"><br /></span></div><div style="text-align: left;"><span face=""verdana" , sans-serif" style="color: #b45f06;"><br /></span></div><div style="text-align: left;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiUNzq5GTIFo8HDWWwpVSRtj1H_idRLCo9f7z1OBbHm_SuZUWKBexDyqmntcKj3VC6RFxdcfeLtF499RXd_xjLJzcvQvadziqSSV8-yY_BpiWLPZ9XYUR4_4I39_6t_jvgpETw7eGoBJW0/s1600/Shoveling+out+tanks+Temp.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1600" data-original-width="1067" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiUNzq5GTIFo8HDWWwpVSRtj1H_idRLCo9f7z1OBbHm_SuZUWKBexDyqmntcKj3VC6RFxdcfeLtF499RXd_xjLJzcvQvadziqSSV8-yY_BpiWLPZ9XYUR4_4I39_6t_jvgpETw7eGoBJW0/s320/Shoveling+out+tanks+Temp.jpg" width="213" /></a></div><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">2021 brought a welcome reprieve for premium wineries after working through such a difficult 2020. Of course, sales growth rates of 21% aren't sustainable. </span></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;"><br /></span></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">Post-recession history tells us the kind of growth we experienced in 2021 is more of a dead cat bounce related to the refilling of the supply chain rather than a sign of improving secular wine sales. No - the industry still has many issues to confront before we can expect sustainable success and dependable growth in the years ahead.</span></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"><br /></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">I won't repeat those challenges here. They were covered in the <a href="http://www.svb.com/wine-report" target="_blank">2022 Annual State of the Industry report </a>that you should review. Suffice it to say, the hurdles coming our way are large but solvable. They can largely be included within the topic of generational change.</span></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"><br /></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">To find success in the next decade, we will have to evolve the manner in which we sell and market wine. We have to include the values of the younger consumer who are more multi-cultural than the boomers who have driven wine sales growth since 1994. We have to make our wines reflect the industry's commitment to work toward a reduced carbon footprint, social equity, and sustainability. Health also plays a role in finding solutions, during an era when the <a href="https://www.who.int/news/item/28-03-2020-who-to-accelerate-action-to-reduce-the-harmful-use-of-alcohol" target="_blank">WHO has all alcohol in its crosshairs</a>.</span></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"><br /></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">The consumer is asking for products that are plant-based, sustainable, transparent as to source, made without chemicals, and with care for the environment, but our industry ignores those values and goes about marketing the same way we did 20 years ago. </span></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"><br /></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEh94MjTI0z8DGPpfK3rDsvvshoqaMbzpCEvjhKddkh__WWYqcYlLNGmwwQos_7TiNcTmd9O6V_acQdSvVhmKKTdGlDclzOO2THPoxCUjAbFu2GNvfh9ni-g7q0ZtviIUJMCqHeEKagkYiVXP2Om9yNhZngzymPcHxKGLwEyqvzb8x3K31xpd80UIHEH=s230" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="230" data-original-width="225" height="230" src="https://blogger.googleusercontent.com/img/a/AVvXsEh94MjTI0z8DGPpfK3rDsvvshoqaMbzpCEvjhKddkh__WWYqcYlLNGmwwQos_7TiNcTmd9O6V_acQdSvVhmKKTdGlDclzOO2THPoxCUjAbFu2GNvfh9ni-g7q0ZtviIUJMCqHeEKagkYiVXP2Om9yNhZngzymPcHxKGLwEyqvzb8x3K31xpd80UIHEH" width="225" /></a></div>Isn't it ironic that our wine is largely produced in a manner that already reflects the values young consumers seek in a product, but they don't know because we don't tell them!<p></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"><br /></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">The business, like all of life now, is churning faster and those changes will require a little bravery to face, and then solve. I also am convinced when presented with a clear challenge, the wine business will respond. </span><strong style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">To do that we will need to unite in some form to turn the current long-term trends.</strong></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"><br /></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">Starting in late 2019 I started working alongside three other analysts who see precisely the same risks to the industry. We decided to begin a process to see if we could unify the industry to face these challenges. We call this initiative WineRAMP. </span></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"><br /></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">I encourage you to go to the </span><a class="editor-rtfLink" href="https://draft.blogger.com/blog/post/edit/941731830705031230/6550396621089553019#" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #4a6ee0; margin-bottom: 0pt; margin-top: 0pt;" target="_blank"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">WineRAMP.org</span></a><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;"> website and sign up for updates on our progress for change. If for no other reason, please sign up to let us know you understand there is an issue!</span></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;"><br /></span></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt; text-align: center;"><span data-preserver-spaces="true" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; margin-bottom: 0pt; margin-top: 0pt;">~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 000 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ </span></p><p style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #0e101a; margin-bottom: 0pt; margin-top: 0pt;"></p></div></div><span face=""verdana" , sans-serif"><br /></span><div><div>*This financial information is from the SVB Peer Group Analysis (PGA) database that includes reviewed and audited financial statements for wineries from 2,500 cases up to wineries in the low million case range. The information is the average of each winery's statement or ratios, and not weighted by volume.</div></div></div></div>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-66018813162006138692021-10-10T13:42:00.014-07:002021-12-15T21:01:17.313-08:002021 will be the BEST YEAR EVER for a lot of Wineries!<p> </p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEghl5NrZTIPSOXzsK_FWUvm8AbdzPIaPk63z6vXzkbapfvzOvYwRApz70roXQ0Ze7CIRU5QJSzdGaarwkYb6xYApvbl6xh7jt4f61YN23YiWZ89WNZUQoRok1c0t4AgnR8Y42Sy2J4wgKk/" style="margin-left: auto; margin-right: auto;"><img alt="" data-original-height="425" data-original-width="680" height="332" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEghl5NrZTIPSOXzsK_FWUvm8AbdzPIaPk63z6vXzkbapfvzOvYwRApz70roXQ0Ze7CIRU5QJSzdGaarwkYb6xYApvbl6xh7jt4f61YN23YiWZ89WNZUQoRok1c0t4AgnR8Y42Sy2J4wgKk/w531-h332/image.png" width="531" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">SVB Wine Conditions Survey</td></tr></tbody></table><br /><p></p><h3 style="text-align: left;"><span style="color: #b45f06;">Problems are Opportunities Waiting for Solutions</span></h3><div><div class="separator" style="clear: both; text-align: left;"><br /></div><span style="font-family: arial; font-size: medium;"><div style="text-align: center;"><b>This is the last week to participate in the <a href="https://svb.co1.qualtrics.com/jfe/form/SV_2ldSgE5rOPDGigK?source=blog" target="_blank">Annual SVB Winery Conditions Survey</a>. It will close Friday, October 15th.</b></div></span></div><div><span style="font-family: arial;"><br /></span></div><div><span style="font-family: arial;">There is no information like this available anywhere in the wine business. We take on this initiative annually at a substantial cost, but we give it all away to the industry. This data is used by Associations to apply for grants, by academia for research and in V&E classrooms, as a benchmarking tool for all wineries, and as part of the research we do to prepare the Annual SVB Wine Report. That said, it's impossible for me to provide the information without you dedicating the 15 minutes needed to complete the survey. </span></div><div><span style="font-family: arial;"><br /></span></div><div><span style="color: #990000; font-family: arial;"><b>There are always interesting surprises along the way, and this year is no exception. </b></span></div><div><span style="font-family: arial;"><br /></span></div><div><span style="font-family: arial;">As I prepare to begin the writing on the <a href="http://www.svb.com/wine-report">SVB State of the Wine Industry Report</a>, I am aware of many headwinds such as supply-chain problems, fires, smoke, the unprecedented drought, low soil moisture that will be a larger part of 2022, short supply of labor, rising input costs, water rationing, issues with property insurance, dealing with mandated vaccination policies, travel restrictions, and what will likely be declining overall volume sales for the total wine category this year. </span></div><div><span><a name='more'></a></span><span style="font-family: arial;"><br /></span></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9sFYxQSZGTbrNyqpYkhyphenhyphenRkdYlNyxL3S1J15eM-n3cpZbv0CsFa9rOLJ51Aq4zpQ8qqMG2N7n_Oim4N2hUqAiXiBZ9IW3YfaB3pz_3OleD87ndTxZplaYzifjgZ7Fn72MHuTYpCgaAc7s/" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><span style="font-family: arial;"><img alt="" data-original-height="460" data-original-width="889" height="166" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9sFYxQSZGTbrNyqpYkhyphenhyphenRkdYlNyxL3S1J15eM-n3cpZbv0CsFa9rOLJ51Aq4zpQ8qqMG2N7n_Oim4N2hUqAiXiBZ9IW3YfaB3pz_3OleD87ndTxZplaYzifjgZ7Fn72MHuTYpCgaAc7s/" width="320" /></span></a></div><b style="font-family: arial;">Many doors may be closed right now, but there is always opportunity if you know which door to open. </b><span style="font-family: arial;">T</span><span style="font-family: arial;">he wind is at our backs from several directions such as a very strong recovery economy, the reopening of tasting rooms and restaurants, a buoyant M&A environment, the easing of COVID restrictions, improving travel and tourism, better National employment statistics, 2021 GDP growth in the 6%+ range, and a stock market that has more than 50 record closes so far this year. </span></div><div><span style="font-family: arial;"><br /></span></div><div><span style="font-family: arial;">Consumers have wanted to travel this year and they have money to spend. And with international travel largely closed, stay-cations and domestic tourism have seen a positive bounce, benefitting wine country.</span></div><div><span style="font-family: arial;"><br /></span></div><div><span style="font-family: arial;">How are wineries faring with this combination of unique challenges and opportunities? Much better than you might think! <b><span style="color: #990000;">More than half of the industry reports that this will be one of their better years or even <u>their best year in history</u> </span></b>(headline slide from the current survey). That said, I know there are some regions and business models doing very well, while at the same time some that are lagging a recovery.</span></div><div><span style="font-family: arial;"><br /></span></div><h3 style="text-align: left;"><span style="color: #b45f06; font-family: arial;">Where are the Opportunities?</span></h3><div><span style="font-family: arial;"><br /></span></div><div><span style="font-family: arial;">That's an important question, right along with a forecast of the depth of any potholes ahead. To get at that information, we need to tear apart the top-level survey, then dig down and sort the data by production size, location, length of time in business, and many other variables to help us with that roadmap. We try and present that in the <a href="http://www.svb.com/wine-report" target="_blank">SVB Annual State of the Industry Report.</a></span></div><div><span style="font-family: arial;"><br /></span></div><div><span style="font-family: arial;"><b>This survey is a partnership between the industry and Silicon Valley Bank. </b>We spend hundreds of thousands of dollars producing the survey, charts, and information for respondents - then the annual report. We give it all away for free but we can't do that without your help. </span></div><div><span style="font-family: arial;"><b><span style="color: #990000;"><br /></span></b></span></div><div><span style="font-family: arial;"><b><span style="color: #990000;">We need enough responses to have a 95% confidence rating in the top-level results, but with one week to go, we don't have enough responses to do that.</span></b></span></div><div><br /></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhis0dn9OF1SEJZaImx4J4ldspAYqh3_nHGO0EDYgIz3C60OWVC8BqSzWus-wSMS_fzV_KgzfMPSr7svWY8TDBq-61QSKfYRXdHv8QjFkkV5k54TIP3Ooye2BW1vIsRMOOqEcmXFm9-Jdg/s600/Pagebreak+Temp.png" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: arial;"><img border="0" data-original-height="71" data-original-width="600" height="38" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhis0dn9OF1SEJZaImx4J4ldspAYqh3_nHGO0EDYgIz3C60OWVC8BqSzWus-wSMS_fzV_KgzfMPSr7svWY8TDBq-61QSKfYRXdHv8QjFkkV5k54TIP3Ooye2BW1vIsRMOOqEcmXFm9-Jdg/s320/Pagebreak+Temp.png" width="320" /></span></a></div><div class="separator" style="clear: both; text-align: center;"><span style="font-family: arial;"><br /></span></div><div class="separator" style="clear: both;"><h3><span style="color: #b45f06; font-family: arial;">The Survey:</span></h3><p><span style="font-family: arial;"><br /></span></p><p><span style="font-family: arial;">If you own or operate a winery, I ask you to <b><span style="font-size: medium;">please </span></b>contribute your information to the data set so our industry can get better information and guidance. </span></p><p><span style="font-family: arial;"><b>We can't produce free information like this without you doing your part!</b></span></p><p><span style="color: #990000;"><span style="font-family: arial;">Please note that for the first time, we will only be sending charts and the complete data set to those who fully participate in the survey. </span><span style="font-family: arial;"><u><span>We will no longer release charts from the survey that are discussed in the videocast to the general public</span>.</u> </span></span><span style="font-family: arial;"> </span></p><p><span style="font-family: arial;">If you want the information that is derived from the survey, you will need to spend 15 minutes answering the survey.</span></p><p><b><span style="font-family: arial;"><span>The survey will be open from September 27 through October 15. It takes about 15 minutes for most to complete, but to prepare, we’ve included [</span><a href="https://lp.svb.com/rs/610-KAK-266/images/Wine%20Division%20Survey%202022%20v5.pdf" target="_blank"><span style="font-size: medium;">this PDF</span></a><span>] as a guide. </span></span></b></p></div><div style="text-align: center;"><a href="https://svb.co1.qualtrics.com/jfe/form/SV_2ldSgE5rOPDGigK/?source=blog" style="margin-left: 1em; margin-right: 1em;" target="_blank"><span style="font-family: arial;"><img border="0" data-original-height="54" data-original-width="173" height="54" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh_dtT5gUaoYfA-mPptW4ftEaVKnhGl8j7s7lYJDwZbGCYXPP_1xBGD_skVdvwgxfcesxCdkDEw9anbs4PsRTv52Ze7l_7PMQMAb1b1DcXap64Hndv-Afef6wTCz10EHApY2TcQA3YuyGw/s0/Take+the+Survey+Temp.jpg" width="173" /></span></a></div><div style="text-align: center;"><span style="font-family: arial;"><br /></span></div><div><span style="font-family: arial;">Thank you for supporting this annual initiative that will help us all get a clearer picture of our current state and what lies in front of us.</span></div><div><span style="font-family: arial;"><br /></span></div><h3 style="text-align: left;"><span style="color: #b45f06; font-family: arial;">Participation Metrics</span></h3><div><span style="font-family: arial;">In past surveys, we've been able to exceed 1,000 wineries participating which is roughly 10% of the US Wine Industry. As of this moment on Sunday, October 10th, <span style="color: #990000; font-weight: bold;">we are only at 392 responses.</span><span> Based on the number of wineries in a region from the American Winery Guide, only the Lodi AVA has exceeded 10% participation. </span></span></div><div><span style="font-family: arial;"><br /></span></div><div><span style="font-family: arial;">We could really use your region's help for this final week, and your individual help not only in participating but in promoting the survey to your colleagues in the wine industry.</span></div><div><span style="font-family: arial;"><br /></span></div><div><span style="font-family: arial;">Again - shooting for 10% participation, here is the chart of current participation rates:</span></div><div><span style="font-family: arial;"><br /></span></div><div><span style="font-family: arial;"><div class="separator" style="clear: both; text-align: center;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjZ7XcuYZwA7a787hNIqzOGBJSPqXnUSHbhn8gu7G4-oB3GWpX0ct9A9gb0gWAbPuYXHxdW5DuaT-EqrW4zBX9dsy2i4wnpWdCYwnz2f_Ac7CvwkbQAiBYwnwSsmNzYZ4HJo81f3HHh7uA/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="380" data-original-width="646" height="278" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjZ7XcuYZwA7a787hNIqzOGBJSPqXnUSHbhn8gu7G4-oB3GWpX0ct9A9gb0gWAbPuYXHxdW5DuaT-EqrW4zBX9dsy2i4wnpWdCYwnz2f_Ac7CvwkbQAiBYwnwSsmNzYZ4HJo81f3HHh7uA/w473-h278/image.png" width="473" /></a></div><br /></div></span></div></div>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.com0tag:blogger.com,1999:blog-941731830705031230.post-90369883416970197332021-10-04T11:37:00.009-07:002021-12-15T21:03:48.545-08:00SVB Survey Early Results: Water Worries<p> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWGSvf5qE_gHBHc3CyDstgI6tuk1qQIF2mIGUd20qYTcD4C1mO8jCQtHdNLKLKX0cLrWRDnU1xc6nMPfYnhNPFGenLFxAPrecP5nSS3BguiNV43dPHSv_iu2OfrRaWfxKQBcr79CBYtto/s570/Water+Worries+Temp.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="291" data-original-width="570" height="250" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWGSvf5qE_gHBHc3CyDstgI6tuk1qQIF2mIGUd20qYTcD4C1mO8jCQtHdNLKLKX0cLrWRDnU1xc6nMPfYnhNPFGenLFxAPrecP5nSS3BguiNV43dPHSv_iu2OfrRaWfxKQBcr79CBYtto/w491-h250/Water+Worries+Temp.png" width="491" /></a></div><div class="separator" style="clear: both; text-align: center;"><br /></div><h3 style="clear: both; text-align: left;"><span style="color: #b45f06; font-family: arial;">Water Concern</span></h3><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;"><br /></span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;">The <a href="https://svbwine.blogspot.com/2021/09/the-2021-state-of-industry-survey-is.html" target="_blank">Annual SVB Winery Conditions Survey has been open for one week</a> and will close on October 15th. We currently have about 200 of the 1,000 responses we will need for thorough analysis. You can get us closer to 1,000 responses by participating this year.</span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;"><br /></span></div><div class="separator" style="clear: both; text-align: center;"><a href="https://svb.co1.qualtrics.com/jfe/form/SV_2ldSgE5rOPDGigK/?source=blog" style="margin-left: 1em; margin-right: 1em;" target="_blank"><img border="0" data-original-height="54" data-original-width="173" height="54" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh_dtT5gUaoYfA-mPptW4ftEaVKnhGl8j7s7lYJDwZbGCYXPP_1xBGD_skVdvwgxfcesxCdkDEw9anbs4PsRTv52Ze7l_7PMQMAb1b1DcXap64Hndv-Afef6wTCz10EHApY2TcQA3YuyGw/s0/Take+the+Survey+Temp.jpg" width="173" /></a></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;"><br /></span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;">Even with low initial participation, there is some preliminary information coming into focus. </span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;"><br /></span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;">Water is clearly a worry with 42% of responders expressing concern they <u>may have a serious problem in 2022</u>, while 51% are on edge but believe they should be fine (headline slide). <b><span style="color: #990000;">That leaves only about 7% feeling confident about water supply going into next year</span></b> which tells us for these responders - water is a real concern.</span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;"><br /></span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;">It will be interesting to test this in the spring when rain totals come into focus because from all I've read, we will need a flood year with heavy snowpack to see improving reservoir levels and soil moisture content in the western states. And what are the chances of having an abnormally wet year? The answer is in the word 'abnormal.'</span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;"><br /></span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;">So if the chances are high that 2022 will be a serious year for water concerns, what are people planning on doing about the problem?</span></div><div class="separator" style="clear: both; text-align: left;"><span><a name='more'></a></span><span style="font-family: arial;"><br /></span></div><h3 style="clear: both; text-align: left;"><span style="color: #b45f06; font-family: arial;">Hope is not a strategy</span></h3><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;"><br /></span></div><div class="separator" style="clear: both; text-align: left;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAMvjzT1KVBqE-EXiEj0M_NBmiV_iQROFRYE4d0jv2Db31RcBg5oiqlKqMD04ZDLPauxQ9LzaUiMlPl56d9J3lV8Zv6R-jt6Q6IMtXxyV7ZHJCFpTMhN0AHNnnJI2XXhygytHcxLnrUEE/s672/Drought+strategies+Temp.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="406" data-original-width="672" height="302" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAMvjzT1KVBqE-EXiEj0M_NBmiV_iQROFRYE4d0jv2Db31RcBg5oiqlKqMD04ZDLPauxQ9LzaUiMlPl56d9J3lV8Zv6R-jt6Q6IMtXxyV7ZHJCFpTMhN0AHNnnJI2XXhygytHcxLnrUEE/w502-h302/Drought+strategies+Temp.png" width="502" /></a></div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;">At this stage in the survey, there are broad solutions to the problem expressed with employing new technology (16%) leading the list of options (nearby chart). Interestingly, a similar percentage of respondents (15%) plan on doing nothing. Hope is good, but as I say often, 'hope is not a strategy.' </span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;"><br /></span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;">That said, about 85% are planning on making some changes to address water concerns.</span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;"><br /></span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;">In a related finding, no matter what the mitigation strategy is, what is clear from the answers thus far is there is an expectation among many that we will have lower yields - managed or natural, should we continue with drought in the western states. </span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;"><br /></span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;">Of course, the regional impact of those results could also play into grape purchase plans and supply levels, depending on the location of those responding. Virginia is not Oregon, and Oregon isn't Sonoma when it comes to water. </span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;"><br /></span></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;">We will go deeper into that question both in the survey and in the annual report based on region - if we get sufficient responses </span><span style="font-family: arial;">to drill down below top-level findings. </span><b style="font-family: arial;"><span style="color: #990000;">We will need to have significantly higher responses from all major regions if we are to produce these results.</span></b></div><div class="separator" style="clear: both; text-align: left;"><span style="font-family: arial;"><b><span style="color: #990000;"><br /></span></b></span></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhis0dn9OF1SEJZaImx4J4ldspAYqh3_nHGO0EDYgIz3C60OWVC8BqSzWus-wSMS_fzV_KgzfMPSr7svWY8TDBq-61QSKfYRXdHv8QjFkkV5k54TIP3Ooye2BW1vIsRMOOqEcmXFm9-Jdg/s600/Pagebreak+Temp.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="71" data-original-width="600" height="38" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhis0dn9OF1SEJZaImx4J4ldspAYqh3_nHGO0EDYgIz3C60OWVC8BqSzWus-wSMS_fzV_KgzfMPSr7svWY8TDBq-61QSKfYRXdHv8QjFkkV5k54TIP3Ooye2BW1vIsRMOOqEcmXFm9-Jdg/s320/Pagebreak+Temp.png" width="320" /></a></div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: left;"><h3 style="text-align: left;"><span style="color: #b45f06; font-family: arial;">The Survey:</span></h3><p><span style="font-family: arial;">If you own or operate a winery, I ask you to <b><span style="font-size: medium;">please </span></b>contribute your information to the data set so our industry can get better information and guidance. </span></p><p><span style="font-family: arial;"><b>We can't produce free information like this without you doing your part!</b></span></p><p><span style="color: #990000;"><span style="font-family: arial;">Please note that for the first time, we will only be sending charts and the complete data set to those who fully participate in the survey. </span><span style="font-family: arial;"><u><span>We will no longer release charts from the survey that are discussed in the videocast to the general public</span>.</u> </span></span><span style="font-family: arial;"> If you want the information that is derived from the survey, you will need to spend 15 minutes answering the survey.</span></p><p><b><span style="font-family: arial;">The survey will be open from September 27 through October 15. It takes about 15 minutes for most to complete, but to prepare, we’ve included [</span><a href="https://lp.svb.com/rs/610-KAK-266/images/Wine%20Division%20Survey%202022%20v5.pdf" style="font-family: arial;" target="_blank"><span style="font-size: medium;">this PDF</span></a><span style="font-family: arial;">] as a guide. </span></b></p></div><div style="text-align: center;"><a href="https://svb.co1.qualtrics.com/jfe/form/SV_2ldSgE5rOPDGigK/?source=blog" style="margin-left: 1em; margin-right: 1em;" target="_blank"><img border="0" data-original-height="54" data-original-width="173" height="54" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh_dtT5gUaoYfA-mPptW4ftEaVKnhGl8j7s7lYJDwZbGCYXPP_1xBGD_skVdvwgxfcesxCdkDEw9anbs4PsRTv52Ze7l_7PMQMAb1b1DcXap64Hndv-Afef6wTCz10EHApY2TcQA3YuyGw/s0/Take+the+Survey+Temp.jpg" width="173" /></a></div><div style="text-align: center;"><br /></div><div style="text-align: left;"><span style="font-family: arial;">Thank you for participating in the survey, and for helping the wine industry get a clearer picture of our current state and what lies in front of us.</span></div><span style="font-family: arial;"><br /></span></div><p></p>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-66337043032479758472021-07-05T15:58:00.029-07:002021-07-14T10:23:17.205-07:00Wine Demand is Turning Negative, Defying Good News<p><br /></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEilv0y-xzaXKE6rEfrRVbTcvZAlxXKl4BIojUCQxEfftR_2b1HTofZ3VvaVXyoOz_EUsaO-wjD6GT92O3TfXVY0bYPefaWsyf4p4dHEmhEtQyHqQRXKIrsJtKf-JTje8Qqyjqx7Ss5ZZ50/s2048/Women+at+picnic+with+wine.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1365" data-original-width="2048" height="309" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEilv0y-xzaXKE6rEfrRVbTcvZAlxXKl4BIojUCQxEfftR_2b1HTofZ3VvaVXyoOz_EUsaO-wjD6GT92O3TfXVY0bYPefaWsyf4p4dHEmhEtQyHqQRXKIrsJtKf-JTje8Qqyjqx7Ss5ZZ50/w465-h309/Women+at+picnic+with+wine.jpg" width="465" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Photo by <a href="https://unsplash.com/@mohaumannathoko?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText">Mohau Mannathoko</a></td></tr></tbody></table><p></p><h3 style="text-align: left;"><span style="color: #b45f06;">I don't like it but...</span></h3><p>it's true. I might have missed on a prediction that I made. </p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgxlGPpT2-0l_Xkevk__zUDSVSo2xfh7cjbtFRga6UIWgaYQRZ0SEgrSWCj9nOgFtvIL1yT38ia7k5vuZ91Wv2wj7prn5AMdYErZ-ZeiSBlySERiUtgnCZpmqQbwGHgRu2nEnfRM4G3NQY/s2048/coffe+missing+a+cup+-+mistake.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="2048" data-original-width="1638" height="308" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgxlGPpT2-0l_Xkevk__zUDSVSo2xfh7cjbtFRga6UIWgaYQRZ0SEgrSWCj9nOgFtvIL1yT38ia7k5vuZ91Wv2wj7prn5AMdYErZ-ZeiSBlySERiUtgnCZpmqQbwGHgRu2nEnfRM4G3NQY/w247-h308/coffe+missing+a+cup+-+mistake.jpg" width="247" /></a></div>Starting in January of this year, I began predicting that overall wine demand would grow through and into at least 2022. As the days passed, the better-than-expected situation with COVID vaccinations became clearer, so <a href="http://svbwine.blogspot.com/2021/03/why-am-i-so-optimistic-about-2021.html" target="_blank">I held firm to my forecast and underscored it further in a March blog post</a>. There were so many positives to support my faith in our industry's 2021 opportunity, how could I not be optimistic? <div><br /></div><div><h3 style="text-align: left;"><span style="color: #b45f06;">The Wind's At Our Back</span></h3><p>We are sitting with the highest GDP in decades. Fiscal and monetary stimulus from the government is being delivered in trainloads. Restaurant and tasting room sales are being added back to the calculus. Internet sales are at records. Frustrated and cooped-up consumers with exploding personal savings are desperate to spend it on experiences like travel and tourism. The jobs numbers are increasingly positive. And, the stock market is at record highs producing even more discretionary income. <span></span></p><a name='more'></a><p></p><h3 style="text-align: left;"><span style="color: #b45f06;">But, I Underestimated the Impact of a Simple Fact</span></h3><p></p>When looking at all of the positive factors noted above, I ignored the fact that still wine sales have been plagued by declining growth rates since 2017. Even before the Pandemic, growth was effectively zero for the category. The headwinds creating this demand issue haven't changed: <div><ol style="text-align: left;"><li>Younger frugal consumers are consuming spirits over wine.</li><li>Aging consumers that drove the growth of wine sales are cutting back.</li><li>Alcohol is losing popularity in the face of a health movement that puts even moderate consumption in a position of being a <a href="https://svbwine.blogspot.com/2020/08/the-real-threat-to-wine-sales-is-being.html" target="_blank">questionable choice</a>. </li><li>In the 'better for you' contest, wine has lost its prior status as a beverage with health attributes due to our industry's inattention.<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjNOvVkZgkK-8pxL6EbqZizDVXRACKJCjZKPCNypY2CTH4cr1q80e-DjFfubvblx13LgRcBNFf9strUF71nkJQQvglCE4uynPW9b_1WOgE240nFNIKwqi-oJCRjU__NgQZmoMVmKHpe0Qw/s2048/Thinking+male.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="1368" data-original-width="2048" height="187" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjNOvVkZgkK-8pxL6EbqZizDVXRACKJCjZKPCNypY2CTH4cr1q80e-DjFfubvblx13LgRcBNFf9strUF71nkJQQvglCE4uynPW9b_1WOgE240nFNIKwqi-oJCRjU__NgQZmoMVmKHpe0Qw/w279-h187/Thinking+male.jpg" width="279" /></a></div></li><li>Spirits have adapted their marketing effectively for a new consumer, while the wine industry has not.</li></ol><p></p><p>Even though I knew all the headwinds facing the wine industry and have extensively reported on them, I believed we would see a bounce from reopening - at minimum from existing wine consumers, if not from new consumers too. </p><p>In making my prediction of positive sales growth this year, I postulated if growth was zero at the start of 2021, growth should be something more than zero as we moved into a better economy, <span style="color: #990000;"><b>but thus far in 2021, that's not turning out.</b></span></p><h3 style="text-align: left;"><b><span style="color: #b45f06;">The Most Important Chart So Far This Year</span></b></h3><p>SipSource is a company that aggregates the wine and spirits distributors depletion data. That data is trended for both on and off-premise, removing much of the channel shifting impacts. So total depletions from distributors - at least on a volume basis are a good relative measure of trends over the prior twelve months. Sadly, it's not pretty.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj1Sgxsgw8YKh6m76bDtSITbKDaCy3jrBlxTv0vCWFTd04bV1R57ALkzNHK9h64PHNO2RirUStEfYMMwSqr9wYR7EA25olWk44dguJagwWVnVGHo3b2x2nGUe-5UPc02Brq3Uq6NV-lyhc/s1909/Sip+Source+March-21.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1075" data-original-width="1909" height="295" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj1Sgxsgw8YKh6m76bDtSITbKDaCy3jrBlxTv0vCWFTd04bV1R57ALkzNHK9h64PHNO2RirUStEfYMMwSqr9wYR7EA25olWk44dguJagwWVnVGHo3b2x2nGUe-5UPc02Brq3Uq6NV-lyhc/w525-h295/Sip+Source+March-21.png" width="525" /></a></div><div class="separator" style="clear: both; text-align: center;"><br /></div><div style="clear: both; text-align: left;">Looking at the nearby slide, notice the growth rate in wine has been lower than in spirits. That has been the case for years and isn't surprising by now. But wine and spirits were at least trending in a parallel manner through January 2021. </div><div style="clear: both; text-align: left;"><br /></div><div style="clear: both; text-align: left;">So while the lower nominal growth rate was disappointing to see versus spirits, there was nearly every reason to believe that the growth rate of both spirits and wine would move higher as we reopened, but that isn't happening as of the latest SipSource report.</div><div><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwcjZLEcWuJJs_3BokERfsR0S6DTJM2Sr-u1gUqoGHKFSBHq1NhE6WGqJ0s3DH2kcR3yGndBuwxepdsUOO8_fT2DmPcKZ6La5cmj3ZzHuMioxO9_13O4oMm27GjULCpZVkg52p0KvXLY4/s2048/sad+woman+with+wine.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1280" data-original-width="2048" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwcjZLEcWuJJs_3BokERfsR0S6DTJM2Sr-u1gUqoGHKFSBHq1NhE6WGqJ0s3DH2kcR3yGndBuwxepdsUOO8_fT2DmPcKZ6La5cmj3ZzHuMioxO9_13O4oMm27GjULCpZVkg52p0KvXLY4/s320/sad+woman+with+wine.jpg" width="320" /></a></div>The rolling party I'd predicted earlier has started, and occasions to connect and mingle over wine have increased. The growth rate of spirits took off, but <b><span style="color: #990000;">wine went in the opposite direction and started to give away market share, now trending into negative growth.</span></b> <p></p><p><span>I'm not the only analyst to notice this. </span><a href="https://www.linkedin.com/in/dale-stratton-b40b7a3/" target="_blank">Dale Stratton</a>; a highly experienced alc. beverage professional who works with SipSource, started talking about this decoupling with me about sixty days ago and has publicly shared those concerns recently in his own speaking engagement. Industry vet <a href="https://www.linkedin.com/in/danny-brager-1a72a5/" target="_blank">Danny Brager</a> and I have been sharing a few Zoom engagements lately, and I found that he arrived at the same conclusion from his research. <a href="https://www.winebusiness.com/news/?go=getArticle&dataId=247279" target="_blank">Andrew Adams provided his thoughts on the same SipSource data set on June 25th</a> in an article on Wine Business, and <a href="https://www.linkedin.com/in/jonmoramarco/" target="_blank">Jon Moramarco</a> in his videocast in mid-June looked at a different data set and still came to the same conclusion: <span style="color: #990000;"><b>W</b></span><b><span style="color: #990000;">ine is losing market share to spirits.</span></b></p></div><h3 style="clear: both; text-align: left;"><span style="color: #b45f06;">End of the Line for Wine's Category Share Growth in Alc. Bev?</span></h3><div><span style="color: #b45f06;"><br /></span></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEidA6yljxzBmaOFk1UsfeVT837HyTGJat3Z3FMu5JjbGRJcmDGcxSOD2hlpS-YHJrESsuZ1j8XvupF6Pqe7IsAsDw2bAfOzY_XydMKMKsxL37Q9ad1K0QjZ2urwTnk0KnCK5JStfWbSWJQ/s2048/Girl+facing+the+wind.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="1365" data-original-width="2048" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEidA6yljxzBmaOFk1UsfeVT837HyTGJat3Z3FMu5JjbGRJcmDGcxSOD2hlpS-YHJrESsuZ1j8XvupF6Pqe7IsAsDw2bAfOzY_XydMKMKsxL37Q9ad1K0QjZ2urwTnk0KnCK5JStfWbSWJQ/s320/Girl+facing+the+wind.jpg" width="320" /></a></div><div>Wine has been taking small share points from the beer category for decades, but we may be at a tipping point. Beer has been in a declining trend for decades but we may be joining them. </div><div><u style="font-weight: bold;"><br /></u></div><div><u style="font-weight: bold;">If the wine industry can't show increasing growth with the winds that are at our back now, we will have a real issue going forward when business conditions normalize</u><b>.</b> But I'm not ready to lose hope. There is one other possible explanation for the present short-term surprise.</div></div><div><br /></div><div>During reopening, the older consumers have been slower to come out of their bomb shelters, and rightly so given how deaths from COVID have skewed to the older population. So the divergence we see thus far with spirits gaining share, while wine rides in negative growth territory may be an indication of more youthful spirits-loving consumers starting the party, and more cautious boomer consumers taking a wait-and-see attitude. That trend could still reverse itself and maybe my earlier prediction of growth in 2021 will come out yet! One can hope.</div><div><br /></div><div>By September we should know one way or the other, but make no mistake: <b><span style="color: #990000;">Negative growth in this economy is going to be a difficult fact to face if indeed we don't claw our way back into positive growth during Q3. </span></b></div><div><b><span style="color: #990000;"><br /></span></b></div><div>Someone will undoubtedly and correctly bring up the fact that premium wine is doing better than wine priced below $11. But just note - 'better' is a relative term. The demand problem we as an industry suffer crosses all price points.</div><div><br /></div><div>If the summer ends like this, what should the industry do?</div><div><br /></div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUH2n35dZ0r5akDE442skVYNyadDPji0S6aWYOMKGeM0zI_gsGyJapBCs8JItOI9RJQgqNCQnzFhwI6fBJ8iR0qBpr3Ww86KDH74cIvYZv2zd8BRKhFbla7oxXgX1LVgUfnXx2oU53iYE/s536/Page+Break.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="94" data-original-width="536" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUH2n35dZ0r5akDE442skVYNyadDPji0S6aWYOMKGeM0zI_gsGyJapBCs8JItOI9RJQgqNCQnzFhwI6fBJ8iR0qBpr3Ww86KDH74cIvYZv2zd8BRKhFbla7oxXgX1LVgUfnXx2oU53iYE/s320/Page+Break.png" width="320" /></a></div><br /><div style="text-align: center;"><br /></div><div><div><h3 style="clear: both; font-family: "times new roman";"><span style="color: #b45f06; font-size: large;">What's Your Opinion?</span></h3><ul style="font-family: "times new roman";"><li><span style="color: #38761d;"><b>Will still wine as a category end 2021 in negative growth territory, </b></span></li><li><span style="color: #38761d;"><b>If the above is true, what should be done?</b></span></li><li><span style="color: #38761d;"><b>Why are spirits showing such strong growth in the recovery already, and not wine?</b></span></li></ul><b style="color: #38761d; font-family: "times new roman";">Please join this site on the top right-hand side of the page, and offer your thoughts below. I respond to everyone.</b><br /><div abp="2638" class="separator" style="clear: both; font-family: "times new roman";"><span style="color: #38761d;"></span></div><div abp="2671" style="font-family: "times new roman";"><div abp="1028"><div abp="913"><div abp="2507"><b><span abp="1488" style="color: #990000;"><span abp="931" style="color: #38761d;"><u abp="3162"><span abp="1016">Please share this post on your favorite social media platform</span></u>. We need to bring a spotlight to a discussion of this topic.</span></span></b></div></div></div></div></div><div style="font-family: "times new roman";"><br /></div></div><p></p></div></div>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.com27tag:blogger.com,1999:blog-941731830705031230.post-6389559079969063562021-06-06T17:35:00.008-07:002021-07-15T11:37:08.689-07:00The 2021 DTC Videocast Brings Clarity to a Changed Consumer<p></p><div class="separator" style="clear: both; text-align: center;"><iframe allowfullscreen="" class="BLOG_video_class" height="426" src="https://www.youtube.com/embed/Awl2UwvxttU" width="513" youtube-src-id="Awl2UwvxttU"></iframe></div><br /><h3 style="text-align: left;"><span style="color: #b45f06;">The Report</span></h3><p></p><p>Fifteen hundred people signed up to watch the 2021 Silicon Valley Bank Annual Direct to Consumer Videocast held on May 25th, where we released the newly formatted and constructed benchmarks and metrics from the March 2021 DTC survey. </p><p>I'd say the broadcast went well, outside of my worst nightmare coming true when my internet died in the opening and I had to switch wireless connections. No matter. I survived one more Zoom surprise. </p><p><span></span></p><a name='more'></a><p></p><p>For those unfamiliar, the Annual SVB DTC Survey runs in March of each year. Then, based on proprietary analysis - this year from 460 wineries, the report delivers the industry’s best insights into the evolution of direct-to-consumer sales tactics and success strategies. </p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjSBPyS_sz5dBgzvByOoHSlm9191_HuIaobsbdC2Mpce3f366i-NwQ6QQ4_-u4_Q0ubunNMJAToUsw67Q3b9e8oZ0ox0r3X28ryq7Ob3O0rEU05mjOqT753iA1iacR6dh9GK1faMq0rJGQ/s708/2019+State+of+The+Industry+Panel.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="390" data-original-width="708" height="110" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjSBPyS_sz5dBgzvByOoHSlm9191_HuIaobsbdC2Mpce3f366i-NwQ6QQ4_-u4_Q0ubunNMJAToUsw67Q3b9e8oZ0ox0r3X28ryq7Ob3O0rEU05mjOqT753iA1iacR6dh9GK1faMq0rJGQ/w200-h110/2019+State+of+The+Industry+Panel.jpg" width="200" /></a></div>From the emergence of new product offerings, to enhanced consumer engagement in the virtual realm, to changed tactics due to heightened health and safety regulations, much has changed in the wake of the most difficult industry conditions since prohibition. <p></p><p>Each of these topics, and many more are covered in the videocast as we rotate through the 24 presentation slides giving added color. This gratis report and videocast is a must-view and must-read for anyone engaged in the wine business.</p><h3 style="text-align: left;"><span style="color: #b45f06;">A Cautionary Note</span></h3><p>Silicon Valley Bank has been producing gratis survey insights and benchmarks for the industry for over 20 years. Our reports are fueled through a partnership and collaboration with you and your winery. The interest in the report findings is always high. But without your own winery's participation, we can't produce the robust information to share with you. <span style="color: #990000;"><b>This year, we were only 10 surveys away from dropping below a 95% confidence interval, and a few regions couldn't be split out due to statistically insignificant response rates.</b> </span></p><p><u><b>Please sign up for Silicon Valley Bank research and participation in surveys [<a href="https://www.svb.com/email-subscription-setup">here</a>].</b></u> Select the <i>"Staying Ahead of the Innovation Curve: Wine"</i> box and submit.</p><p>We hope that if you get something out of our reports, you will give back to our broader wine community by participating in our two annual surveys. The next one, our Annual State of the Wine Industry Survey, is slated for October, with the insights reported in January!</p><p>In the meantime, <b>download the newly released Direct-to-Consumer Wine Survey Report [<a href="https://www.svb.com/globalassets/library/uploadedfiles/reports/2021-direct-to-consumer-wine-survey-report_5.20.pdf">here</a>]</b> and watch the virtual event recording of our expert panel’s views on the findings at the top of the blog.</p><p style="text-align: center;"><br /></p><p><a href="https://www.svb.com/globalassets/library/uploadedfiles/reports/2021-direct-to-consumer-wine-survey-report_5.20.pdf" style="margin-left: 1em; margin-right: 1em; text-align: center;" target="_blank"><img border="0" data-original-height="277" data-original-width="1045" height="124" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJpd0vnHEY8Hiy-BHEJTtF_L4lktgXt-cBW7HpX7LqVoFsMHPRE0DVMqiIKKZrw43LR_0pdEVwxz05Vhj-vhxYQv8-GFTm9TPtE2zUoq_eGHThfsIUmfQCM5sf4YTrRNRLuQfESOs21mM/w469-h124/DTC+Temp.png" width="469" /></a></p>Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.com