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Silicon Valley Bank Forecasts 4-8% Sales Growth In Wine For 2013

ST. HELENA, Calif., Jan. 15, 2013 /PRNewswire/ -- Silicon Valley Bank, a leading provider of commercial banking services to the wine industry, releases its Annual State of the Wine Industry Report in a live broadcast from SVB TV studios today. The report captures trends and addresses current issues facing the U.S. wine industry, offering unique data and observations that help wine business owners and managers think critically about their strategies.

(Photo: http://photos.prnewswire.com/prnh/20130115/MM42572-INFO)

Key findings and predictions: See infographic and video

  • The general financial condition of the wine industry continues to improve at a slow and steady pace.
  • 2012 produced the rarest of events: large yields coincident with outstanding quality across all Western US growing regions.  
  • Sales growth in fine wine is predicted to be in the range of 4-8 percent in 2013, which is a lower rate of growth than in the previous three years.
  • Wine businesses expect to increase bottle prices slightly; however, SVB believes that will prove difficult in 2013.
  • Winery gross and net profit will be negatively impacted in 2013 due to higher grape costs.
  • Inventory is balanced; yet grape planting will be restrained compared to the same point in prior cycles.
  • The purchase volume of wine grapes and grape pricing will largely be flat compared to 2012.
  • Mergers and acquisitions of vineyards and wineries will continue at a record pace in 2013.
  • Massive bulk imports will continue to dominate the lowest price point wine categories.
  • Planting in grape growing regions is and will continue to be more restrained versus prior cycles.
  • Direct-to-consumer sales will continue as the largest growth channel for most wineries.

Read the full report.

Based on its in-house expertise, ongoing research and a survey of 450 West Coast wineries, Silicon Valley Bank continues to believe the fine wine segment is early in a long-term, steady growth phase, despite ongoing headwinds, increasing pricing pressures and global economic uncertainty.

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