Issue link: http://read.dmtmag.com/i/561374
8 8 V I N E YA R D & W I N E RY M A N A G E M E N T | S e p t - O c t 2 015 w w w. v w m m e d i a . c o m According to the 2015 Winery & Grower Benchmarking Survey distributed by Moss Adams, the Farm Credit Alliance and Turrentine Brokerage, there is cautiousness behind the industry's optimism. This is due to the increased inven- tory that resulted from the large crops, as well as price-point trends showing that sales below $7-$10 per bottle are trending down. (On the upside, sales are trending up at higher price-points.) More than 300 wineries throughout the West Coast participated in the survey. low-but-steady growth in sales has members of the U.S. wine industry feeling fairly positive, even on the heels of three large-crop years. Because of California's con- secutive big yields, wineries have already financed more barrels and facility expansions, and they antici- pate even more. Vineyard planting activity in some regions, especially California's North Coast, where most of the plantable land has already been cultivated, is increas- ingly being utilized for replanting existing vineyards. BY BILL VYENIELO, STEVE FREDRICKS AND BILL RODDA + While members of the U.S. wine industry have a positive outlook for 2016, there is caution behind the optimism. + This is due to increased inventory from three consecutive large-crop years, plus a decline in wines priced at $7-$10 per bottle. + The idea of the traditional winery is changing, and many new entrants opt for a "virtual winery" model. + Large wineries continue to grow by adding smaller wineries to their books AT A GLANCE By and large, California has been able to sell its wines and increase supply, and the United States con- tinues to be the biggest target for importers. MARKETING CHALLENGES Getting to the consumer is more challenging than ever, with myriad complex options. As reported in the benchmarking survey, winer- ies have to work harder to market their wines in order to grow sales. Domestic wines priced under $7 per bottle are competing with imports, beer and spirits, dealing with unfavorable exchange rates, and fighting for space with fewer distributors. For perspective, we now have more than 8,000 wineries in the U.S. and less than 700 dis- tributors – an 11 to 1 ratio; in 1995 there were 1,800 wineries and 3,000 distributors – a 2 to 3 ratio. Wineries in today's modern world have to be more professional in their marketing and sales plans when it comes to packaging, pairing and delivering their wines. The silver lin- ing is that there are more opportuni- ties to succeed as things change. Industry survey reveals sales, marketing and consolidation trends