NAPA, Calif., Jan. 14, 2020 /PRNewswire/ -- Silicon Valley
Bank (SVB), the bank of the world's most innovative companies
and their investors, released its 2020 State of the Wine
Industry Report today. Now in its 19th year, this
authoritative annual report assesses current conditions in the wine
industry and provides a unique forecast for the year ahead based on
proprietary research and economic and behavioral trends.
Highlights and predictions from the 2020 survey and report:
- Acute oversupply will lead to wide-spread discounting and
present the US wine consumer with the best wine retail values in 20
years.
- The 2019 harvest will likely produce normal to
slightly-below-normal yields in California, and below-normal yields in
Oregon and Washington. The lower yields won't help with
the oversupply, however.
- The large millennial population hasn't yet begun to embrace
wine, presenting the wine industry with its largest growth
opportunity.
- 71 percent of wineries reported 2019 was a good year, and 24
percent say it was their best year in history. At the same time, an
increasing number of wineries are reporting poor financial
results.
- Winery owners' confidence in current market conditions dropped
precipitously in 2019, with 49 percent of respondents taking a
pessimistic view, compared to only one percent who were pessimistic
in 2018.
- Oversupply with diminishing volume growth in demand will lead
to vineyard removals and reduced returns for growers in most
regions.
"Today, the wine supply chain is stuffed," said Rob McMillan, founder of Silicon Valley Bank's
Wine Division and author of the report. "This oversupply,
coupled with eroding consumer demand, can only lead to discounting
of finished wine, bulk wine and grapes. US wine consumers will
discover unprecedented retail value in 2020 and should buy up."
McMillan also noted, "The key to future success for US wineries
will be in cracking the millennial code to understand that evolving
consumer profile. Today, there are winners and losers in the wine
trade. The winners are those with solid management teams who are
willing to evolve their sales and marketing strategies, execute
quickly on a plan, then evaluate success or failure to continuously
improve."
SVB will host a live videocast with Rob
McMillan to discuss the annual report and the state of the
wine industry on January 14, 2020 at
9:30 a.m. PT with Amy Hoopes, President of Wente Family Estates;
Juliana Colangelo, West Coast
Director of Colangelo & Partners; and Paul Mabray, CEO of Emetry. Register for the
live event here. A replay of the discussion will be available after
the event.
Read the full report here: svb.com/wine-report/
About Silicon Valley Bank
For more than 35 years, Silicon Valley Bank (SVB) has helped
innovative companies and their investors move bold ideas forward,
fast. SVB provides targeted financial services and expertise
through its offices in innovation centers around the world. With
commercial, international and private banking services, SVB helps
address the unique needs of innovators. Learn more at svb.com.
Silicon Valley Bank's Wine Division
Founded in 1994, SVB's Wine Division offers financial services
and strategic advice to premium vineyards and wineries. With one of
the largest banking teams in the country dedicated to the wine
industry, SVB's Wine Division has offices in Napa, Sonoma
and Portland, and primarily serves
clients in the fine wine producing regions along the West Coast of
the United States. Learn more at
svb.com/premium-wine-banking/
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SOURCE Silicon Valley Bank