“Perfect storm” of Vineyard Demand Says Moss Adams Wine Industry Report

Wine-producing regions in California, Oregon, and Washington have experienced a recovery in land values since the recession according to the 2013 Wine Industry Financial Benchmarking Report just released by accounting firm Moss Adams LLP along with the Farm Credit Alliance, and Turrentine Brokerage.

“Add increased demand, increased prices for wine grapes, historically low interest rates, and tight foreign supplies, and you have a perfect storm of increased demand for vineyard acreage in key wine-growing regions,” said the report.

The 53-page report is based on data from 166 participants that ranged in size from those that produce less than 1,000 cases to those with 720,000 in annual case sales.

According to the report, “Since the recession of 2008, cased-goods sales have increased; however, over this time consumers and bulk wine and grape purchasers have altered their buying decisions. Personal consumption expenditures decreased during the recession, but as spending has risen so too have the values of retail bottle prices and the price points at which bottles are purchased.

“Domestic sales in the $10–$20 retail price category are booming,” the report continued, “primarily for leading varietals such as Cabernet Sauvignon and Pinot Noir. However, the under $10 segment still commands roughly 80% of total sales among major varietals.”

Data  for the report was collected between May 20 and August 15, 2013. Operating and financial data was generally collected for the calendar year 2012.

“Recognizing the sensitivity of the information provided to us, we kept all data strictly confidential and reported on it only in the aggregate,” said the report.

The report is free to all participants and $495 for others. A copy can be requested at this link.

A free pdf of the executive summary is available at this link.

Project leader Jeff Gutsch said, “We’d  like to thank those who took the time to complete the survey, as the information produced from the survey results obviously improves as the participation level increases. Thanks also to our co-sponsors Turrentine Brokerage and the American Ag Credit Alliance, as well as Sonoma State University for their commitment of resources.”