The beginning of change is understanding.
Each January in California, we are all enlightened by the Unified Wine and Grape Symposium, the DTC Wine Symposium, the Sovos ShipCompliant DTC Wine Shipping Report, and the Silicon Valley Bank State of the US Wine Industry Report. I'd like to say I attend them all, but some overlap. I do make it a point to attend the SVB State of the Wine Industry Videocast though. To allow flexibility, SVB records the video presentation of the SVB Report for replay.
This year, while the headlines have been less than ideal, I come away from January 2025 encouraged. Why? Because I knew the business would not evolve in a healthy path until the majority understood this is a secular change.
In prior years of this report, we predicted this day would come if we didn't evolve. At the end of the Introduction to the 2019 SVB State of the Industry Report, we said:
"The fundamental underpinnings that created the industry growth are changing, which means the tactics that were relied upon to ride this wave of success to this point will slowly prove flawed without business adaptation. To continue its growth in the years ahead, the US wine industry needs new direction and a changed focus."
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In-action has been the only action we've taken to attack industry issues to this point in time. And the truth is, you can't fix a problem you can't identify and accept. So, back to the question of why I'm encouraged by the recent news: It's because it feels as though we have finally reached a critical point where the facts have been accepted as reality.
Yes, there are still those who don't want to hear about the underwhelming performance of the industry for varying reasons, but we are ready to adapt now. That is a start. Let's seize the momentum!
Where do we go next?
I know for a fact that when the circumstances surrounding business success change, using the same strategy will fail.
We are in this very strange place where consumers who we need to influence tomorrow, have values that align or should align with wine. As a friend of mine once said, "For Gawd's sake. We are plant-based." We also can be locally sourced, have no added surgar, be low in carbohydrates, gluten-free, authentic... Just take a look at Slide 20 in the State of the Industry Report and think about the possibilities.
In the next 5 years, we will see the creative side of the business come forward and solve some of these issues. We will be far more successful working together versus going it alone. Yet, every wine company has to reconsider its strategies and look for growth opportunities.
It's time to break the mold and reevaluate everything we think - DTC, grape contracts, the tasting room model, micro collaborations with neighbors, the effectiveness of our social media campaigns, wholesale distribution, our efficiencies, how we use data, our messaging, where we market, how we define 'an experience' ... The list is long and includes gaining personal insight and being willing to take a position on the inflated claims of the anti-alcohol industry. And yes, I know permit holders can't make health claims. But we can do more in that area. Staying silent hasn't been a good strategy.
The possibilities are bright ahead of us because wine is what the young consumer wants. They just don't know it. So let's tell them.
