State of the Wine Industry 2015 (SVB Report, Video)

Silicon Valley Bank reports that 2015 looks like a "breakout" year for the wine industry. Read the full report by SVB wine division founder Rob McMillan.

Pricing expectations among wineries
A strong economy portends increasingly expensive bottles of wine, especially in the $15-19 segment.

In addition to winery survey results from 2014, Silicon Valley Bank has also released their 2015 Wine Report.

A must-read, the 56-page report includes predictions, demand forecasts, a look at supply (planting and yields), pricing and financial performance.

In addition to being an informative read, author Rob McMillan–founder of the SVB wine division who likes “tractor pulls and walks on the beach”–writes in a loose, entertaining, pop-culture reference-filled style that perhaps makes him the John Oliver of wine. The opening of this year’s report begins with an analogy comparing the film Cast Away (Tom Hanks) to being prepared to navigate in this “evolved” world.

Scarecrow cult cab - Premiere Napa Valley
Will the strength of the U.S. dollar scare off foreign wine investors?

Here are some highlights from the State of the Wine Industry report for 2015:

— Economy: strong growth in the U.S. economy should result in increased demand for wine (lower oil prices are delivering millions of stimulus dollars to U.S. consumers, for example).

— Unprecedented yield: for the third consecutive year yields have been “heavy”.

— the top 3 regions reporting excellent harvest quality for 2014: Oregon (87%), Washington (73%), and Napa (72%).

— Red wines lead the way: “Trading up” is a clear trend, and wines priced above $20 broke out mid-2014.

— On the flip side, bottles under $9 performed poorly both on premise and off premise.

State of Wine Industry Videocast
If you work in the wine industry or like to follow wine trends this Silicon Valley Bank videocast is must-see (embedded below).

 

Baseline of the U.S. economy informing Silicon Valley Bank’s demand forecast for wine goes something like this: a favorable shift in oil prices to U.S. consumers (with negative consequences for oil-producing regions); strong U.S. dollar means cheaper imports; interest rates likely to rise (and the Fed has already hinted at the timing); U.S. employment numbers are strong; and, finally, “Millennials have yet to make a dent in the wine business.”

State of the Wine Industry Report - Silicon Valley Bank
2014 continued a streak of record, high quality wine harvests.

2015 LOOKS LIKE A BREAKOUT YEAR

Overall wine consumption increased for the 20th straight year, notes McMillan. 2015 could see that trend continue. Factors influencing the analysis (more of which can be read in the SVB State of the Wine Industry Report 2015) include overturned blue laws, improving employment, easing restrictions on DTC (direct-to-consumer) wine shipments, and consumer preferences for premium-priced wines.

WATCH: SVB State of the Wine Industry 2015

Silicon Valley Bank’s State of the Wine Industry 2015 Videocast with Rob McMillan, founder of Silicon Valley Bank’s wine division, Paul Mabray, Chief Strategy Officer of VinTank; Glenn Proctor, Partner in the Ciatti Company, and Amy Hoopes, Chief Marketing Officer/EVP Global Sales, Wente Family Estates. The panel discusses the latest trends in wine industry growth, consumer demand, pricing a

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