Wine Industry Financial Health Looking Good: Silicon Valley Bank

2014 Has been a very good year for the vast majority of wineries, according to Silicon Valley Bank’s 2014 industry survey.

The entire report can be accessed by clicking on this link.

According to the report summary:

• 82% of wineries reported overall financial health of “good” or better for 2014. This is up 7% over the previous year. This trend is expected to continue as the grapes from three strong harvests (2012,2013, and 2014) make their way into the market.
• Consensus view of 2014 shows 79% of respondents reporting having a good year or better. The Sierra Foothills, CA region reported the largest proportion of disappointment which correlates directly to issues felt during the California drought. Over 41% of respondents from that region reported feeling some issues from the drought.
• 60% of all wineries are projecting price increases per retail bottle with only 6% projecting a decrease in 2015. The majority of increases are expected to be small across all price points except the >$69 range. Wines with a price point >$69 are the most bullish with 45% reporting increases of moderate to strong.
• Wine sales continue to be dominated by the Baby Boomer generation contributing to 44% of all sales with Gen-X’ers coming in at 29%. Three year trends indicate little change amongst the generational buyers in the market today.
• Overall, 93% of wineries reported the quality of grapes harvested as good/excellent for 2014. Wineries in the Pacific Northwest further benefited from the 2014 harvest with 62% of Washington wineries and 85% of Oregon wineries reporting higher yields than average. The next closest region was Napa, CA with 43% of wineries reporting higher than average yields.
• Only 36% of California wineries reported a measurable affect from the 2014 California drought with the most significant issues being felt in the Central Valley, CA, Central Coast, CA, and Sierra Foothill, CA regions.