All 20 of them. The annual report highlights the development of wine sales in a post-COVID world.
The , Calif. – January 13, 2021 — Silicon Valley Bank (SVB), a bank that brings together the world’s most innovative companies and their investors, today released its report on the wine industry in 2021. About 20. This authoritative annual report assesses the current state of the wine industry and provides unique predictions for the coming year based on proprietary research and economic and behavioral trends.
Highlights and predictions from the wine industry report 2021 :
- As the hospitality, tourism and entertainment industries recover, consumer demand will be strong and total sales will increase, which will increase in 2021, but may not be sustainable in 2022.
- The growth rate of wine sales in all price segments has been declining for years. The wine industry will need a national marketing body to deliver a consistent message to consumers.
- Overall, bottle prices should be maintained in both outside and direct channels as demand for spirits and specialty products will experience a temporary growth spurt in 2021.
- Premiumization, the move to more expensive wines, is near its peak, but will continue until 2021, as delayed celebrations and reduced supply have hampered the expected change.
- Retailers who already have an e-commerce strategy in place will be in an excellent position by 2021. Online sales can represent 20% of a winery’s average sales over 5 years.
- Surviving restaurants will emerge from the pandemic with financial losses and will need to invest in new revenue strategies. Wine sales in restaurants will not return to pre-crisis levels in 2021 or in the next few years.
- Out-of-state food sales will decline from last year.
- Wineries offering direct-to-consumer sales models will focus on a COVID-like sales strategy in the first half of the year and will likely end the year 2021 with strong tasting room sales.
- For 2020, we expect California to grind 3.3 million tons, the smallest crop since 2011. Yields in the Pacific Northwest, both Oregon and Washington State, will also be lower than normal.
- California’s wine supply is largely balanced after acute overproduction at the beginning of the year. With limited volume growth and an expected decline in grocery store wine sales, a large harvest in 2021 could put the industry back in a situation of overproduction.
- Retiring baby boomers will reduce their wine purchases as they age, both in terms of price and volume. Online sales to our local boomers will be a growth channel.
- The wine industry will grow in the next decade as 30.3 million Americans turn 40 in the next five years. To attract this new consumer, the wine industry must develop its messages.
2021 will be a two-phase year for the wine industry: the continuation of the COVID restriction regime in the first half of the year, followed by a gradual recovery in business and a resurgence in hospitality, travel and entertainment, made possible by the success of widespread vaccination, said Rob McMillan, founder of Silicon Valley Bank’s wine division and author of the report.
Wineries that have evolved in 2020 have been creative in their marketing channels, recognizing that the societal changes underway that will forever impact the industry will manage to meet the anticipated demand for inoculation and beyond.
The 13th. January 2021 at 9:00 AM: The SVB hosts a live video program with Rob McMillan to discuss the annual report and state of the wine industry. PT with Amy Hoopes, President of Wente Family Estates; Devin Joshua, CEO of Merryvale Vineyards; Eric McLaughlin, CEO of Metis; and Paul Mabray, CEO of Pix.wine. Sign up for the live feed here. A recording of the discussion will be available after the event.
To read the full report on the wine industry in 2021, click 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 come up with bold ideas quickly. With offices in innovation centers around the world, the SVB offers targeted financial services and expertise. As a provider of commercial, international and residential banking services, SVB helps meet the specific needs of innovators. For more information, visit svb.com.
Silicon Valley Bank Wine Division
Founded in 1994, the SVB wine division provides financial services and strategic advice to leading wineries and vineyards. With one of the largest wine banking teams in the country, SVB Wine Division has offices in Napa, Sonoma and Portland and primarily serves clients in the gourmet wine regions along the West Coast of the United States. For more information: svb.com/premium-wine-banking/
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