Silicon Valley Bank Predicts 2020 Will Bring the Best Wine V
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