Sunday, June 18, 2017

Podcast: An Industry View Through Rob McMillan's Wine Glass

I had the opportunity to visit Christian Oggenfuss and Geralyn Brostrom at the Napa Valley Wine Academy just after the release of the State of the Industry Report. We sat down to an open mic over a glass of wine and explored several of my perspectives on the business as well as the story of how the Wine Division of SVB was created, and why we started producing the State of the Industry Report.

After you get though the early part of the podcast which sounds a little like a This is Your Life show on your's truly, at about the 15:00 mark we start to get into some of the concepts discussed in the report. The questions I cover are:

  • Premiumization -
How/when, did premiumization start and where does it go next? How does the retiring boomer play into the trend.
  • Imports -
Total Imports and premium imports are growing. What do domestic producers need to look out for and how can they remain competitive? I believe you better not stand still. What you did in the past isn't going to work going forward and I offer color on that.
  • What happens with the current transition from the Boomer to the Millennial?
It's the beginning of the Luxury Drought, which is a term I will blog on in the near future <teaser>. But with respect to the North Coast of California a practical thing that has to be discussed is my concept of looking for an "on-ramp;" a luxury entry point for the young consumer. That's a critical component for success but there is a right and wrong way to think about it.
  • Why are the big wine companies focusing on red blends? -
The big wine companies have the ability to produce in scale and are ahead of the curve on this one. They "get" the young consumer and acceptance of what they are doing is proof. Do you get the young consumer?
  • Should the wine business be afraid of craft beer and spirits? -
Not really. I see both as a stepping stone for the next wine consumer, but they aren't going away any time soon.
  • What are some of the best regions to look at on the west coast for value production? -
I truly believe the East side of the Sierra's are going to prove to be a wonderful wine growing region, but I'm going to get a fight on that one from almost every side except the University of Nevada at Reno. I was into my second glass at that point, but I still believe it. I just said it out loud this time. I've been saying for more than a decade it's Oregon and Washington where we will see all of the action in the next 20 years.
  • What is the scariest thing about the industry? -
I think complacency is the biggest issue. What we've done to get us here won't get us to the next place we need to be. That's a huge challenge in a changing consumer base with lower economic growth expected in the US. You have to get predictive and way ahead of the change, because it takes years to make changes in sourcing, production, locations, the countries in which you sell, and SKUs.
  • What advice do you have for young people looking for success? -
This is where I start talking about my belief about what makes people successful in life and the spoiler alert is that I don't believe in following your passion. Oprah got it wrong. But that is the point where I started draining the end of my bottle.

Hope you enjoy the audio version here --->  Napa Valley Wine Academy Podcast with Rob McMillan.
For a little fun, the Napa Valley Wine Academy put this on-line quiz together:
Are you a wine expert? ----->  Take our quiz


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