Wine: It's what the young consumer wants. They just don't know it.

 

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. 

SVB State of the Wine Industry - what comes next?

 Click on the above picture to use the QR Code, or try this link: State of the Industry 2025

How Long Will This Last?

Now it feels like it's 2025. The new year's cobwebs are clearing, and the events are starting, including the release of the Annual SVB State of the Industry Report, the DTC Wine Symposium, and next week, the Unified Wine Symposium will be in full force.

The main goal of presenting the SVB State of the Industry Report is to provide a forward view and be as transparent as possible. I understand that many in this industry don't like to hear 'doom and gloom.' Who does? But that is exactly the comment I received several times over in the 2019 report when I said:

Final SVB Annual Survey Participation Update

 

Survey Results as of 10/17 at noon

The SVB Annual State of the Wine Industry Survey closes this coming Sunday evening, October 17th. 

The great news is there has been a strong response rate this year, and we will close with a statistically significant response size above 500 total responses. The AVAs in seven regions will receive their own comps to compare performance against the other regions. 

A special thanks to Paso Robles for their record participation this year. Napa will again cross the 100-participant mark, so once again, thank you, Napa!  

I'd still love additional responses from wineries in Oregon, Washington, Lodi/Clarksburg, New York, Santa Cruz/Monterey, and Texas. With another seven to ten responses, each of the last four named regions will have sufficient responses to have their own regional comps too.

Please promote this post on your favorite social media to get the word out for the last push!

Adding your data to this annual industry event will only take about 20 minutes. 

Here are the survey questions that you can use to prepare: Link. 

Here is the survey itself: Link.

I Need Your Help with the 2024 State of the Industry Survey

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 open now through October 22.

The survey this year 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.

SVB Annual Survey Extended 3 Days

 

We are so close to meeting the participation goal in the Annual SVB Wine Industry Survey but are still about 10% short of the responses we need to produce good results. We are extending the survey for three more days so we might reach our goal.

Industry Sentiment Index Turns Decisively Negative

 

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. 

Annual wine industry survey results - one week left to participate!

There is one week remaining to participate in the Annual State of the Industry. This annual effort is an industry partnership. SVB provides all the work for free, but we have to have good participation to have useful results. 

Currently we are running about 30% behind last year's participation metrics, with all regions short of expectations. Here is a link to the questions and here is a link to the survey.

Here are some early high-level indications of results in a variety of areas:

• Financially wineries describe the 2022 year as "good year." (Not bad and not great)
• They describe their financial position as strong.
• Better than average grape quality
• Lower than average harvest yields
• The impact of the economy is described as having the largest negative impact 
• The Winery Confidence Index produced through the survey is running negative overall.
• Wineries expect to show a small bottle price increase when 2022 is wrapped up.
• Tourism is generally welcome in 'wine country' despite small vocal opposition that gets over-weight attention in the press
• Wineries are improving in the use and analysis of their own consumer data
• Tasting rooms have rebounded strongly since reopening
• There is moderate interest in acquiring new vineyards
• Four percent could not get insurance, while close to 50% saw rate increases, with a third of total respondents saying their rates increased and their coverage decreased
• Sixteen percent say the drought has reduced yields and they need to find new supply,
• Eighteen percent say they have the potential for a serious supply shortage without rain in the winter of 2022/23
• The supply chain problems have impacted most wineries, particularly for glass but across the board
• Regarding climate change, most say that "it's producing a moderate negative impact on operations causing notable fluctuations in business results but is survivable."

I'm looking forward to producing industry breakouts with better participation. At this stage that's not possible.

I have an announcement to make!

I have an announcement to make!

That's always been a phrase that makes me nervous. People don't walk into the room and grab a bullhorn to offer something trivial. What follows that remark will be something big, interesting, or important and hopefully welcome! 

This utterance might precede a happy notification that a grandchild is on the way, someone is engaged, or perhaps that your new college graduate received an offer for the job of their dreams! But it's not always that way.

Signup: 2022 SVB State of the Industry Report

In the fall of each year, I pull apart the US Wine Industry into components and then analyze what's changed, review the trends, and make predictions in the Annual SVB State of the Industry Report. 

2021 will be the BEST YEAR EVER for a lot of Wineries!

 

SVB Wine Conditions Survey

Problems are Opportunities Waiting for Solutions

This is the last week to participate in the Annual SVB Winery Conditions Survey. It will close Friday, October 15th.

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. 

There are always interesting surprises along the way, and this year is no exception. 

As I prepare to begin the writing on the SVB State of the Wine Industry Report, 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. 

Where Does Your AVA Stand Among its Peers?

 

How are we doing on the SVB Annual Winery Survey?

I get the question all the time at survey time. Let me update you.

With two weeks down and essentially one week left until the 2021 SVB Wine Conditions survey closes, we have 300 respondents. 

We need a minimum of 450 responses to provide statistically meaningful data but are hoping we have a more normal response above 600 wineries respond. That would require doubling where we sit today.

Each region with 20 responses or more will get its own regional benchmarks. There are only 5 that hit that mark now. Several AVAs who have been significant participants in the past include Lodi, Paso, Foothills, Texas, and New York, but all AVAs have a ways to go to get to historical participation rates, so please make this short exercise a priority!!

SVB Survey Early Results: Water Worries

 

Water Concern

The Annual SVB Winery Conditions Survey has been open for one week 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.

Even with low initial participation, there is some preliminary information coming into focus. 

Water is clearly a worry with 42% of responders expressing concern they may have a serious problem in 2022, while 51% are on edge but believe they should be fine (headline slide). That leaves only about 7% feeling confident about water supply going into next year which tells us for these responders - water is a real concern.

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.'

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?

SVB Annual State of the Industry Report and Videocast is Wednesday. Sign up!

 

    We're All Glad that Year is Over

2020 will go down as the year in which we answered the heretofore rhetorical question - What else can go wrong? That is the opening line from the 2021 SVB State of the Industry Report that will come out Wednesday the 13th. 

Throughout 2020 many of us experienced the same run of emotions from disbelief, fear, acceptance, determination, and occasionally even a bit of joy through one of the most difficult times in history. As we went through the year, we would think to ourselves - this has to be the worst of it. It has to get better from here? 

We all fought through a series of events, increasing our vocabulary along the way: Coronavirus, COVID, S.I.P. Orders, social distancing, Zoom meetings, herd immunity, PPE, and pandemic - which I thought only happened in bad science fiction movies before last March.

    Will 2021 Be Better than 2020?

I can say with absolute confidence that 2021 will be better than 2020, but I can also say that “normal,” when we get there, will be different from what we left. But we have lives to live and businesses to run so let's get to it! 

Despite the headwinds and distractions, there are opportunities we need to consider and take advantage of and consumers who will be looking to buy your wine. 

We need information and the right tools to be able to plan. While we have to talk about the past for context, this coming Wednesday, I hope to give everyone the benefit of a look forward.

Start with the headline slide for a teaser. Despite the gloomy events of the past year, luxury wine sales held their own, particularly when you consider this performance in context with the last recession. The last recession featured trading down. This recession has given a breath of life to trading up again! Aren't you curious why?

The Annual SVB State of the Industry Report is Arriving January 13th. Sign up for the Webinar and Report!

 

This is the opening photo from the 20th Annual SVB State of the Industry Report where we begin with a reflection; not on our industry, but on how we each as individuals adapted and prevailed during the most unique business conditions in our lifetimes. 

It's important to celebrate this victory but now that vaccines are being given and we can see an end in sight, what's next? Will business conditions return to normal? 

If we answer that question truthfully, the answer is no. That means doing nothing and hoping for a good year will produce poor outcomes. Change is needed and will require all wine businesses to apply the learnings from 2020 and evolve to find the unique prescription for your individual winey's success.

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? 

Here is a link to a PDF file of the questions to prepare, and here is a link to the survey itself.

SVB Industry Research: The New Deal

Winning A Battle

The Annual SVB Industry Survey is closed. I've never posted those words on a blog before because that has never been news. But last Friday, because of the lack of industry response, I was convinced this would be SVB's last survey and in another first, I had to let the industry know that.

I interpreted the continuing annual trend of fewer survey responses as the industry making a universal statement that our research wasn't worth spending the 13 minutes it takes on average to complete it. I can't analyze blank cells, so without a response from wineries, I can't write the Annual State of the Industry Report with the same level of analytic support. How else am I to interpret the disastrous survey response?

I knew last Friday if I couldn't get at least 200 more responses in the 4 remaining days of this 3-week survey, there was no sense in continuing, and this was going to be the last survey the bank would produce - and the good news is I would get my November and December holidays back! So the close of the survey has now apparently become news to many people, including my family. How did we end up with responses?

The SVB Survey is Now Open

Where are we headed as an industry? By now, everyone should be able to agree we are at an inflection point. We certainly have some obstacles to dodge. What are they? What is the magnitude of the problems? How long will we be dealing with oversupply? Where are the opportunities over the next five years? What should we do? 

We can help with some of those answers by getting you some benchmarks if you [take this year's survey]. 

Mid-Year State of the Wine Industry Video Update

In early May, I was interviewed by Latife Hayson on the 2019 State of the Industry Report from Napa California. The interview format allowed me to wander into many other topics and updates not covered in the original SVB Wine Report , the January panels presenting the SVB State of the Industry Videocast nor the Followup Q&A Videocast. 

I was able to take large subjects in a quick-hit format which I really enjoy. It also gave me a little time to talk about the marketing opportunities we have in the family wine community that can effectively increase sales.

Second Hour Broadcast - 2019 SVB Wine Industry Report

We're presenting a second hour of content for those who want more from the release of the Annual State of the Industry report. Register now, join us and continue the conversation!!

~~~O-O~~~

The summary statement from the Annual SVB Wine Report is the Wine Business is at a decision point. We either keep doing what we are doing today and see the category sag, or we change the way we sell and market. Why have I come to this stark conclusion?

2019 State of the Industry Report Signup

2019 SVB State of the Wine Industry

Report & Videocast

Wednesday, January 16, 2019 at 9:30 a.m. PT or 12:30 p.m. ET 

The wine business is changing. You can feel it, even if you can't quantify it. Before you plan out sales and marketing for 2019, you will want to tune-in and discover what's taking place, because there were surprises I didn't expect when I started researching this year.