Register here for the videocast, replay, and copy of this year's report.
In 1992, I wrote the original SVB Wine Division Business Plan in which I said,
"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."
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.
I did pretty well with that prediction.
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.
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.
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.
So, are we lost? Hardly. Success is available to anyone willing to adapt.
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.
This is such an important data point to grasp! 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.
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.
