Wednesday, October 21, 2020

What is the Industry Reporting for 2020 Results? The SVB Survey Has Early Returns [Still Open]

While the unprecedented impacts of the Pandemic and wildfires have rightfully absorbed the attention of the media and industry participants, the basic marketplace challenges I've reported in the 2020 State of the Industry Report are still alive and confronting the industry.

Data and information has never been more important than today. Changes to consumer behavior emanating from shelter in place orders, a recession, and the ruination of restaurants in America among other factors, are creating new changes for wineries, and yes - new opportunities as well if you listen and plan.

The Twentieth Silicon Valley Bank Winery Conditions Survey presents a view of business conditions sorted by region, average bottle price, time in business, and other filters, all to give participants an accurate read of the current industry, and all gratis to participants. The Survey is drawing to a close next week. If you haven't yet participated in this study, I encourage you to do so. Only participants get the complete set of anonymized data and analysis back, at no cost to participants for an investment of 15 minutes of your time. 

PLEASE - will you personally support the wine industry by committing to participate this year? 

Preliminary Information from the Survey

The facts so far support these are indeed historic times. Fifteen percent of the industry has experienced the worst business conditions in history, with 33% reporting 2020 as one of their most challenging years. Still, thirty three percent of the business reports that 2020 will be a good year for them!

Wouldn't you like to know how your region compares to the final data? Twelve percent of wineries are reporting 2020 as their best year in history! What are they doing? How are they selling? What price points are demonstrating that kind of success? Will they raise price next year? You could know those answers by participating in the survey

The above chart is the Sentiment Index that shows how the industry estimates each variable is impacting business conditions. Interestingly thus far the industry is telling us they feel positive about consumer demand. I am going to be interested to see what the final survey results show, because demand for wine can be at best described as flat from a review of other data.

What about sales channels? With all the COVID-19 shutdowns and with wineries adapting and evolving to new strategies, where are sales coming from? 

Online sales are taking a much larger position of importance for the average winery with phone also showing new support. If you took the survey, you could also answer the question based on a sort by bottle price, region, or case volume. There is a question that produces a chart that shows which strategies are most successful and will be be expanded upon in future years.

What about harvest? How are respondents reporting harvest results?

As of right now half way through the survey, yields overall are reported as weaker than normal with a full 26% reporting record low yields. That's hardly a surprise as we started the year in acute over supply, farming for lower volumes, then add in the impacts of fire and smoke on the entire west coast. Digging into the numbers will also tell you which regions did better or worse from a quality and yield standpoint - but you only get that information if you take the survey

How about demand? With the COVID impacted business conditions, are younger people making steps into being more regular wine consumers?

Early returns do indeed show that Gen Z and Millennials are making modest progress into becoming wine consumers at the expense of Boomers and Matures. * I predicted a couple of years ago Gen X would be the dominant consumer of wine by 2021 and you know what ... I might get close on that prediction! But what wines are the younger consumers interested in? We will have some answers when the survey closes.

Here is a current chart showing the survey respondents by region. You can click on the picture for a better view.

A Little Assistance Please?

We could really use help in promoting this survey to your winery constituents and colleagues. Today we have 250 responses with the survey set to close in a little more than a week. We would like to get to 1,000 so there is work to be done. 

The survey will be open October 13 and close October 30. It takes about 15 minutes for most to complete, but to prepare we’ve included this link to the questions. 

As a survey participant, we will provide you the full anonymous results, top-level analysis and relevant charts. Note that the full results are distributed ONLY to those who complete the survey.

Please forward to your winery colleagues and promote this on your social media channels. We really need a good response this year!


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