Signup: SVB State of the Industry - Special Edition

  

On March 23rd, eight days after we closed tasting rooms in California, I posted a blog about crisis management where I suggested for scenario planning, June 1st would be a good guess for reopening. So I was really excited to hear that this past week that we've started the conversation about reopening tasting rooms in California and along the west coast. Perhaps my educated guess might turn out closer to correct than I deserve?

Post Lock-Down Opportunity for Wineries

The above chart from the USDA is a little cluttered, but the dotted lines show how US consumers have been moving from eating at home, and somewhere around 2011 shifted to eating away from home. Not earth-shattering observations that two-income families with complex schedules moved away from traditional family meals. But why should we care? We should care because an interesting thing has happened with wine demand in the last 7 weeks.

What is Normal in a Post COVID-19 World?

The Coronavirus Pandemic for the wine and restaurant industries has been like getting picked up in a tornado and dropped into the Wizzard of Oz movie but without the welcoming committees. It's been dizzying to see overall demand for wine improve, at the same time premium wineries are fighting for survival. 

Crisis Management for Wine Country

I'm not alone when I say that I've never been through anything like this and didn't see it coming. I had no way of imagining such a circumstance: a world-wide pandemic that closes down the US and World economies? While I've seen shelter-in-place orders for regional issues, it's beyond comprehension that this would ever take place in as many countries as we're seeing now, or in the entirety of the State of California and the growing list of other states and regions that have similar orders.

After the string of directives this past week from state, federal and local governments that pounded down our prior realities, I spent time surveying the wine industry landscape and talked to as many people as possible to gain a sense of where we stand. 

Canceled: Annual SVB Direct to Consumer Survey

You probably recognize the photo up top of Times Square. I took it this afternoon from a webcam. You might never again see it this empty - or so that's my hope.

The Decision to Cancel

Selling Wine in a Pandemic

There are times in life when we have to react to circumstances that are well outside of anything expected. A pandemic? Well, that's a circumstance with which none of us have any experience. That new aspect of our lives required us to adapt then employ behaviors that are out of the norm. For some, this is distracting, but for others, this is nothing less than debilitating.

The Annual SVB Direct to Consumer Survey is Open

Improving and evolving your direct sales strategies, marketing, and sales will be the difference between success and struggling in the coming decade as the industry's consumer target evolves under our feet as, anti-alcohol groups push their agenda and competition from beer, spirits, and foreign wine intensify. We defend ourselves by using data and evolving or approach.

For instance, how does your tasting fee compare to your region? Are you enticing consumers or scaring them away with that? Are your tasting rooms sales growing like others in your area? What are the splits between club sales and tasting room sales and are they in-line with comps. There are so many other questions that deserve attention.

Shortcut for those looking for the links: Survey Questions  Take the Survey Now ... otherwise, let me convince you a little more.

The Email You Don't Want to Get

I have a role that puts me in contact with winery owners, analysts, entrepreneurs and occasionally even people with checkmarks next to their Twitter accounts. They run the gamut. I get a couple hundred emails a day - most of them junk but more than enough to have me working 12 hour days to keep up. People are always asking my opinion, and on occasion, they want to give me their opinion.

This week I received an email from a casual acquaintance who is a wine consumer but likes to read the SVB State of the Industry Report and check in every year with me. This year his email was disturbing. Here is what he said almost verbatim. I've changed the region to 'wine country' to make it more general and added emphasis:

Final Call: Sign up for the 2020 SVB Industry Videocast and Report

I finished writing the SVB Annual State of the Industry Report in early December. There are always surprises I discover when going through the research and writing. This year the surprise was the top slide. This slide is from the Annual Industry Survey and it answers a question everyone has: How is the industry feeling about the current market?

In the 2019 report last year, the overall industry sentiment turned barely negative with one percent of the industry on average turning pessimistic. That's news in and of itself in this most optimistic of businesses. But in the 2020 report which will be released this week, a whopping 46 percent of the industry turned pessimistic. Wow! Have conditions turned that bad that fast? 

I think you have to respect the data. But I also believe identifying the risks and threats allows us to best define solutions to fight back and in the videocast on Tuesday, we will talk about some solutions.

Hopefully, you want to hear how we see the industry this year - threats and opportunities. Signing up for the videocast will give you a replay link to watch later, an early link to the report and slides produced and used during the session. [sign up here] 

2020 SVB State of the Industry Report & Videocast

I am looking forward to the release of the Annual State of the Industry Report. I finished writing about 2 weeks ago and now it's going through regulatory, legal, compliance, marketing, production, etc. You can't believe how many people contribute to the production of this.

The report will be released on January 14th. Signing up for the videocast will give you a replay link to watch later, an early link to the report, and slides produced and used during the session.  [sign up here] 

You'll have to wait to hear the conclusions but here is a teaser. 

We asked the question in the SVB survey, "How was your year." It might be surprising to know that sixty-nine percent of the industry believed 2019 was a good year, and 24% said it was their best year ever!

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?

Is this the Last SVB Industry Survey?

Images from Pixabay

I am trying to put the pieces together to arrive at a decision to continue or discontinue the Annual SVB Industry Survey, and I need your help to decide.

Almost 20 years ago I recognized there was a severe lack of good data and benchmarks, so I came up with the idea to start an industry survey. It was a novel concept for the era and was immensely successful. For the first time, small wineries had real business information to help in decision-making.

We gave the complete set of information and analysis to respondents and also used it to formulate pieces of the SVB State of the Industry Report. We've been fully underwriting the effort at substantial cost and producing results free of charge ever since. It has to be a labor of love on our part. I don't think anyone would confuse it with a for-profit initiative! But we are at a crossroads.

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]. 

Wine & Milk in Decline Due to Changing Science

I was intrigued at the above video which chronicles the advent and popularity of plant-based milk products like Almond Milk and at the same time the decline in the consumption of real milk. Milk and wine were both described as a healthy part of a normal diet at one point. So what happened? It's a little bit of Deja Vu.

Get Ready For Cancer Warnings on Wine Labels

Note: There are several links to articles embedded in the post following that give more context.

Deep within the State of the Industry Report that was released in January, I discussed the Cumulative Negative Health Message that is being spread by neo-prohibitionists. That message is resonating with consumers and wine sales are being impacted, particularly among young health-conscious consumers.

In fact, the total volume growth of wine sold through distributors in the US has turned negative in both restaurants and grocery/drug store sales in the 12-month period ending in June of this year. When was the last time that happened?

Wine Supply is Entering Unknown Territory

Grape Supply Cycles

The wine business runs in cycles when it comes to planting. Trying to guess which grapes are needed and just when they are needed is a trick, especially when it takes 5 years to get a fully mature yield. And it's impossible to predict planting decisions effectively without making some guess on demand.

We have been through excess before, but the cycles aren't always created by the same circumstance and this one is unique.