US - fine wines set to gain from growth in market

The wine industry is poised to benefit from an improving economy – and fine wine sales are forecasted to grow by 11-15% year over year – concludes Silicon Valley Bank’s latest annual wine industry report.

Authored by Rob McMillan, founder of SVB’s Wine Division, the report is based on SVB’s in-depth survey of nearly 600 wine industry experts and insiders, third-party research, and SVB’s perspective as a long-time observer of the wine industry.

The report captures trends and addresses critical issues facing the U.S. wine industry, offering data and observations designed to help wine business owners and managers think critically about their strategies. Among the findings, the report states that inventory is in closer balance than many believe.

It also predicts that although affluents dominate the purchase of fine wine, improving economic conditions for restaurants and the middle class will help long term.

Although many reports single out Millenials as the driving force of the wine market, SVB stresses that growth is being led by Gen X and Boomers, not Millennials at this stage.

Overall, wine industry sales, profits and gross margins bottomed in 2009 and were up in 2010 marking the bottom for producers, says SVB, which also highlights a slowness by wineries in the adoption of customer relation management and other digital sales best practices.