FOOD & RESTAURANTS

Digital Report - immediate delivery to your email.

Date of Publishing: 2023.
No. of Pages: 97.

If you run a winery, the worst place to find yourself entering a recession is with bloated inventory levels. That leads to rapid discounting. In a weak vintage year, wholesalers may even try to skip over that vintage in favor of the better vintage, as was the case with the 2000 and 2001 vintages that collided with the dot-com bubble. While every recession since the late ’80s has started with too much wine in the tanks, the good news, even with flagging overall demand for wine today, is that with three years in a row of short harvests and good-quality vintages, we have balanced cellar stocks of well-regarded vintages across the industry, so we are the best positioned we’ve ever been to successfully negotiate a recession, should that actually emerge. Those are the facts as they stand heading into 2023. But in a more intermediate-term view, there has never been a wider gulf between the success of the production side of the wine business and that of the premium side. The downward trend has been discussed in this report for many years. And while trading up is still a part of the premium space vernacular that favors the premium business today, those issues impacting lower-priced wine will eventually impact premium producers too if nothing alters the current consumer trajectory of the entire category. This is a situation our industry has to fully embrace and solve as a whole.

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Content:

1. Introduction.

2. Predictions in Review.

3. US Wine Business Predictions and Observations.

4. The Consumer and Demand.

5. Advertising and Promoting.

6. The Winery Sentiment Index.

7. Sales Trends.

8. Cumulative Negative Health Messaging.

9. Have You Ever Raised Bottle Prices?

10. Premium Winery Financial Performance.

11. Grape And Wine Supply.

12. Final Thoughts.

13. Endnotes.

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Digital Report - immediate delivery to your email.

Date of Publishing: 2021.
No. of Pages: 57.

We have been extensively researching the wine business since 1991 and making public forecasts for 20 years. Some years we properly characterize a market change. In other years, our findings might be off in timing or even wrong. The events of 2020 introduced more chaos than anyone could have predicted, but we will once again review the forecasts made last year, just to keep score.

To say 2020 was a difficult year is an understatement. While bruised, most of us are back at our craft with hopeful anticipation as we move toward a COVID-free world. While I can say with confidence that 2021 will be better, I can also say that “normal,” when we get there, will be different from what we left. There are new issues that need to be planned for. We believe this report will inform your team’s thinking about the niche you occupy within the wine business, help you anticipate potential 2021 scenarios that will require planning and guide you toward joining other successful wineries that have adapted to changed market conditions and new opportunities. We hope it will inspire you to get creative about possibilities with your strategic planning, and that engaging in that process may help you improve your chances of success in the year ahead.
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Contents:

1. Introduction.
2. 2020 predictions in review.
2.1. What we got right.
2.2. What we got partially right.
2.3. What we got wrong.
3. 2021 US wine business predictions and observations
3.1. Top-level forecast.
3.2. Supply.
3.3. Price.
3.4. Seven tailwinds.
3.5. Seven headwinds.
4. Sales channels.
4.1. Where total wine sales up or down in 2020.
4.2. Off-remise sales and changes.
4.3. On-premise sales and changes.
4.4. Direct-to-consumer sales.
4.5. Direct sales and investment.
5. Harvest and grape and wine supply.
5.1. Moving from acute oversupply to balance in months.
5.2. Finding balance through shifting channels.
5.3. Finding balance in unorthodox ways.
5.4. Formats, varietals and packaging.6. Demographics and marketing.
6.1. Consumption patterns: Millennials vs. Boomers.
7. Cumulative negative health messaging.
7.1. Neo-prohibition, the original.
7.2. Neo-prohibition, the sequel.
8. The year in review.
8.1. Surprise and shock: The first 90 days of the pandemic.
8.2. What is normal during a summer pandemic?
8.3. The four seasons - winter, spring, summer and fire.
8.4. Abdominal economic impacts of this research.
9. Conclusion.
10. Endnotes.
Figure 1. Preliminary US wine market volume 2019-2020.
Figure 2. Off-premise volume and value changes in 2020 vs. prior year.
Figure 3. Figure 3. Month-to-month average price changes of top 100 best-selling SKUs off-premise.
Figure 4. Restaurants wine depletions from distributor stock, year-over-year comparison.
Figure 5. Year-over-year changes to on-premise wine sales.
Figure 6. Winery restaurant sales as percent of total winery sales.
Figure 7. Average winery's sales channels.
Figure 8. Direct-to-consumer channel movement in 2020.
Figure 9. Growth in direct channels.
Figure 10. Sales growth rates of West Coast premium wineries.
Figure 11. E-commerce trends in alcohol.
Figure 12. E-commerce penetration.
Figure 13. Data analytics person.
Figure 14. California crush of wine grapes vs. consumption of California table wine.
Figure 15. California bulk wine inventory.
Figure. 16. California bulk wine inventory changes. 
Figure 17. Harvest yields in 2020.
Figure 18. Harvest quality in 2020.
Figure 19. Growth and market share of formats.
Figure 20. Varietal growth and share of market.
Figure 21. Long-term trend of off-premise retail sales (rolling 52 weeks).
Figure 22. US population by age (Gen Z, Millennials, Gen X, Boomers, Matures).
Figure 23. Wine consumption by cohort.
Figure 24. Consumption by cohort based on winery's average bottle price.
Figure 25. Generation differences  in wine (Millenials, Gen X, Boomers).
Figure 26. Sample snack food label.
Figure 27. Percent change in per capita ethanol consumption.
Figure 28. US unemployment rate  2019-2020.
Figure 29. Change in number of seated diners in US restaurants vs. prior year.
Figure 30. Average winery's sales channels - April 1, 2020.
Figure 31. Off-premise change in value vs. prior year.
Figure 33. Direct-to-consumer channel movement in 2020.
Figure 34. Daily new COVID-19 cases in the US.
Figure 35. Premium winery income statement averages.
Figure 36. Impact o smoke and fires.
Figure 37. Insurance coverage for significantly impacted vintners.
Figure 38. Employment 2007 - 2012.
Figure 39. Employment 2015 -2020.
Figure 40. US luxury wine sales.
Figure 41. Core retail sales except auto, seasonally adjusted.
Figure 42. Nielsen-covered outlets, grocery and drug. 

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