Silicon Valley Bank predicts better wine sales

The fine wine industry could sell a lot more bottles this year, thanks to improved “luxury buying behavior,” Silicon Valley Bank said in a report Monday.

The Santa Clara-based lender, which mainly serves technology firms but has many wine industry clients, said in its annual State of the Wine Industry report that sales of expensive wine would jump by eight percent to 12 percent this year. The report cited a jump in corporate entertainment and better restaurant sales.

Helping to boost sales is improvement at independent, “white tablecloth” restaurants that had been hurt the past few years by dwindling wine sales.

The report tempered its growth prediction by citing “persistent financial and economic hurdles nationally,” and said that high grape costs and trade discounts could further hurt the sector’s profit margins.

In addition, certain wineries selling bottles that cost at least $50 “will again find 2010 a difficult year,” said Rob McMillan, founder of the bank’s Wine Division and author of the report.

McMillan encouraged winery owners to move beyond previously established consumer norms.

“The new normal for your winery should not be fully defined by the fate of an economically damaged consumer, but by your own sales strategy,” he said in a statement.