Silicon Valley Bank released its Annual State of the Wine Industry report in a live broadcast today, indicating accelerating sales growth in the fine wine category of 14% to 18% in 2015. The growth will be driven by a strong US economy, declining oil prices, improved employment statistics, a stronger US dollar, and a measured pace of interest rates all factors that will contribute to the double-digit growth.
Here are the highlights:
The fine wine category expects the strongest growth and is defined as $20 and above per bottle. Price creep keeps going up as consumers accept quality wine at increasingly higher price categories, said Amy Hoopes, chief marketing officer and EVP of global sales at Wente Family estates.
“We’re training Millenials to drink foreign wine,” said McMillan, citing the success of wines from Chile, New Zealand, and more recently the Rioja region of Spain. “But how do we brand American wines? We have to be able to say something more than price. American-produced wines have to mean something. We have to get our hands around this for the long-term growth of the domestic industry.”
Paul Mabray, chief strategy officer at Vintank, thinks that we are living in the most competitive market in history for wine. Yet he sees a knowledge and resource gap occurring with wineries regarding digital presence and Direct To Consumer (DTC) sales, where the top 20% of wineries outperform the bottom 80%. Even if wineries try and fail, they’re failing forward, he said. “Even if they’re not succeeding, they’re still gaining knowledge.”