SVB Wine Report: The US wine industry sees some challenges in 2022

According to the latest Silicon Valley Bank Wine Report shows that although 2021 proved to be a good year for the US wine industry, several serious challenges signal uncertain times ahead.

The report points out that underlying trends remained a big concern, with the most serious being that younger consumers are not getting interesting in wine, and wine is losing market share to spirits, craft beer, RTDs and other alcoholic drinks.

“This issue has yet to be addressed or solved, and the negative consequences are increasingly evident,” Rob McMillan, EVP and Founder, Premium Wine Division warned in the report. “Wine as a product has lost the lustre it once had with the consumer 20 years ago and is probably entering a phase of negative volume growth.”

“By 2025, 27.9 million Americans will cross normal retirement age at 66, while 30.3 million will cross age 40.5. That will be too many consumers leaving their best buying years, and too many consumers entering their best buying years, to ignore,” McMillan states.

The report also points out out the homogeny and lack of transparency of many entry level wines that was failing to appeal to younger, more health-conscious potential wine drinkers, who wanted to drink less but better, while the high price of more premium offering was another deterrent.

“Premium wine producers haven’t figured out how to produce their wine for an entry-level consumer. Without an on-ramp, it’s going to be hard to grow the wine category,” McMillan further states.

Declining volume sales

Across the on and off-trade, data from SipSource shows that growth in wine compared to spirits stalled at the onset of 2021, having both shown comparable volume growth during 2020. As the report showed, when businesses reopened in January 2021, that comparable trend took a dramatic turn and while spirits finished the year in 6.1% growth, wine was down -8.9%.

Although the report highlighted a number of tailwinds, it criticized the “lack of leadership within the wine industry to counter these obvious trends and cooperate to form a marketing organization to promote the wine category”.

This points to the potential decline of restaurants as an important channel for the wine industry in the US, the report also warned.

“The restaurant industry will likely continue to decline in its importance to the wine industry as a viable sales channel due to overpricing on the menu and consumers who value other alcoholic beverages over wine,” the report said. “Restaurants may find that wine is not in demand at the prices charged and that the cost to maintain deep stocks of wine is becoming senseless.”

There was evidence that the amount of wine sold through the wholesale channel fell throughout the year despite tasting rooms, restaurants, hotels and travel resuming business. This indicates that as restaurants reopened, wine inventories are being streamlined into smaller wine lists.

“The investment in long wine lists might be limited going forward,” McMillan said.

Other highlights:

• Consumer behaviour has irrevocably changed as a result of the pandemic – the switch to homeworking is set to stay, and the move to online purchasing is also set to remain.
• Premiumization has continue to accelerate, however the higher price points are being offset by lower total volumes.
• The industry needs to invest to accelerate, looking at online and ecommerce driven by data, rather than focusing on more traditional channels, such as the cellar door.
• A key warning came around anti-alcohol messaging, which it said continued to grow while guidelines from a variety of government and health organizations “loosely apply science to influence consumption and taxes”. However the greater threat was a push to place “additional and more dire cancer warnings on wine”. “The industry can’t allow that to become a reality.”

#wine #winetrade #winenews #wineeconomics #wineindustry #winelovers #SiliconValleyBank
#USwinemarket #SipSource #instawine #vin #instawine

Save the Dates: 2022 Wine Days to Celebrate!

To help you plan for 2022, here is list of some of the biggest wine days out there – in chronological order.

This list is comprised of important national or international wine days, with relevant hashtags, is a great starting point to assist you in planning fun and engaging posts. If I missed any dates, or if there are any new dates to be added, please let me know.

Happy Wine Tasting!

Liz Palmer

February

February 1, 2022 – International Furmint Day – #furmintday
February 16, 2022 – International Syrah Day – #syrahday
February 18, 2022 – Global Drink Wine Day – #drinkwineday
February 26, 2022 – Open That Bottle Night – #openthatbottlenight

March

March 3, 2022 – Mulled Wine Day – #mulledwineday
March 13, 2022 – International Riesling Day – #rieslingday

April

April 14, 2022 – Tannat Day – #tannatday
April 17, 2022 – World Malbec Day – #malbecday
April 23, 2022 – International Cava Day – #cavaday
April 27, 2022 – World Marselan Day – #worldmarselanday
April 29, 2022 – International Viognier Day – #internationalviognierday

May

May 6, 2022 – International Sauvignon Blanc Day – #sauvignonblancday
May 9, 2022 – World Moscato Day – #worldmoscatoday
May 17, 2022 – Pinot Grigio Day – #pinotgrigioday
May 25, 2022 – National Wine Day – #nationalwineday
May 26, 2022 – International Chardonnay Day – #internationalchardonnayday

June

June 10, 2022 – World Verdejo Day – #worldverdejoday
June 11, 2022 – National Rosé Day – #nationalroseday
June 18, 2022 – Drink Chenin Blanc Day – #drinkcheninblancday
June 20, 2022 – International Chenin Blanc Day -#internationaldrinkcheninblancday
June 21, 2022 – World Lambrusco Day – #worldlambruscoday

July

July 22, 2022 – Shiraz Day #shirazday
July 25, 2022 – National Wine & Cheese Day – #wine&cheeseday

August

August 1, 2022 – International Albarino Day – #albarinoday
August 4, 2022 – National White Wine Day – #nationalwhitewineday
August 13, 2022 – International Prosecco Day – #proseccoday
August 18, 2022 – International Pinot Noir Day – #pinotnoirday
August 28, 2022 – National Red Wine Day – #redwineday
August 30, 2022 – International Cabernet Day – #cabernetday

September

September 1, 2022 – International Cap Classique Day – #capclassiqueday
September 1, 2022 – International Cabernet Day – #cabernetsauvignonday

September 2, 2022 – National Chianti Day – #chiantiday
September 10, 2022 – International Port Wine Day – #internationalportday
September 16, 2022 – International Grenache Day #grenacheday

October

October 5, 2022 – World Vranec Day – #worldvranecday
October 6, 2022 – National Orange Wine Day – #nationalorangewineday
October 8, 2022 – International Pinotage Day – #pinotageday
October 14, 2022 – Prokupac Day – #prokupacday
October 26, 2022 – International Mavrud Day – #mavrudday
October 27, 2022 – International Carignan Day – #carignanday
October 28 – World Champagne Day – #champagneday

November

November 1, 2022 – International Xinomavro Day – #internationalxinomavroday
November 7, 2022 – International Merlot Day – #internationalmerlotday
November 10, 2022 – International Tempranillo Day -#internationaltempranilloday
November 12, 2022 – Wine Tourism Day – #winetourismday
November 16, 2022 – National Zinfandel Day – #zinfandelday
November 17, 2022 – Beaujolais Nouveau Day – #beaujolaisnouveauday
November 24, 2022 – International Carmenere Day – #carménèreday

December

December 1, 2022 – International Maratheftiko Day – #maratheftikoday
December 4, 2022 – International Cabernet Franc Day – #cabernetfrancday
December 10, 2022 – World Aszú Day – #worldazsuday
December 16, 2022 – Pinot Meunier Day – #meunierday

#winedays #2022winedays #winecalendar #winelovers
#wine #winetasting #redwine #whitewine #rosewine #instawine #winetime
#winenews #internationalwineday #nationalwineday #cheers #winestagram
#winetourism #winemarketing #digitalmarketing #vin #vinho #vino

Champagne News: Total shipments of Champagne in 2021 rose to 322 million bottles, an increase of 32% over 2020

The Champagne region and houses are celebrating after sales and exports set new records last year even as pandemic lockdowns forced many bars and restaurants to close.

Comité Champagne, a trade association representing over 16,000 winegrowers and 320 Champagne houses, said this week that France exported a record 180 million bottles of Champagne in 2021, an increase of 38% over 2020.

Global sales of Champagne also hit a record €5.5 billion (US$6.2 billion).

Comité Champagne said that total shipments rose 32% over the previous year to 322 million bottles as people found reasons to celebrate at home.

“With tourism and the staging of events still reduced due to the health crisis, there is room to believe that home consumption has taken up the slack,” the trade group said in a statement.

“Consumers have chosen to entertain themselves at home, compensating for the generally gloomy mood with new moments of conviviality and sharing,” they also added.

Detailed export data has not yet been released, but in 2020, the United Kingdom and the United States were the top foreign markets for champagne.

Champagne drinking popped back up to its pre-pandemic levels last year in France, with shipments increasing 25% to reach nearly 142 million bottles.

‘This recovery is a welcome surprise for the people of Champagne after a troubled 2020 (with figures down by 18%) impacted by the closure of main points of consumption and the shortage of celebratory events across the world,’ comments Maxime Toubart, president of the Syndicat général des vignerons and co-president of the Comité Champagne. He is otherwise pleased to note ‘the healthy state of the national market’.

Jean-Marie Barillère, president of the Union des Maisons de Champagne and co-president of the Comité Champagne, is delighted that ‘thanks to exports and the consumer’s devotion to fine cuvees, Champagne will reach a record turnover of more than 5.5 billion Euros*’. But he stresses ‘the average shipments in 2020-2021, at 280 million bottles and 4.9 billion Euros, remain under the pre-pandemic levels (300 million bottles, 5 billion Euros in 2019)’.
Afflicted by the health crisis in 2020 and challenging climatic conditions in 2021, Champagne now hopes that 2022 will open the way to a new cycle of growth.

#champagne #champagnelovers #champagneeconomics #champagneregion #comitechampagne
#cheers #wine #winelovers #celebrate #winenews #wineexports #reims #epernay #aube

2022 Oregon Wine Symposium – February 15-17, 2022

Ice storms and restrictions on public gatherings can’t stop the demand for Oregon wine education, and in the case of the Oregon Wine Symposium, the show must go on. The annual event, held virtually for the second time in its 17-year history, is shaped by industry volunteers who make up the Education Committee that carefully evaluates and designs the curriculum around the most pressing needs of the industry. Driven by this input along with qualitative feedback and marketplace trend analysis, the Symposium strives to provide maximum value to attendees. More than 30 seminars and presentations by global wine experts are offered with three days full of information for $79 for registrants between now and January 14, 2022.

The 2022 Symposium will be organized in the familiar format of three separate tracks: Viticulture, Enology, and Business of Wine.

Some seminars to note are as follows:

In the Viticulture track, Drought in Oregon will present perspectives on one of the most serious environmental issues faced by many in the industry. Dr. Alec Levin and Chad Vargas will discuss the issue in depth and will be joined by Gregory Gambetta from the Bordeaux region of France. Gambetta will explore how common maladies like trunk disease and vine decline are being linked to the effects of long-term water stress.

Examining more topics within the water management arena, the Enology track offers two critical seminars on Tuesday, February 15: Winery Sustainability and Best Practices for Water Management in the Cellar and Diving Deep Into Winery Water Usage & Treatment at 10:45 and 11:45 am.

The Business of Wine track has several standout seminars for 2022. Benchmarking Oregon’s DTC Landscape will explore how Oregon-wide Community Benchmark DTC data can supply tasting rooms with opportunities for activating positive change and increasing channel growth. Regional associations will also discuss insights they’ve gathered from this regional benchmarking and what it means for their success.

The second day will take a two-pronged approach to media relations with back-to-back seminars; PR 101: Inside PR & Communications Strategies and Building your Media Relations Tool Kit: A Playbook for Successful PR & Communications Strategies as presented by Oregon wine PR veterans Kelli Matthews, Michelle Kauffman and Ryan Pennington.

Instead of just one Keynote speaker, the 2022 Symposium will extend the excitement by featuring a different Keynote address each day. This Keynote series will kick off with the return of Rob McMillan from Silicon Valley Bank, who will deliver the annual State of the Industry. As Oregon continues to be one of the hottest commodities in North American wine in the mergers and acquisitions (M & A) space, Kevin O’Brien of Zepponi & Company and Erik McLaughlin, CEO of METIS will together cover M&A Trends & Positioning for Sale.

Day three will feature a double dose of Dr. Greg Jones (pictured at right), who will highlight his riveting Climatology Report and the Vintage Report in his Keynote speeches. Dr. Jones’ highly anticipated seminars provide excellent educated glimpses into the future of Oregon Wine by examining our immediate past.

Participants are encouraged to register before January 14, 2022 to take advantage of the full-access admission reduction of 25% for early bird pricing, putting admission cost at only $79 for three full days of education and networking. Group admission for four or more drops to $69 apiece, and $25 admission for full access to viticulture seminars and general sessions with Spanish interpretation. This year, a new feature has been added—the Group Spanish Speaker Interpretation at $125 – which grants access to all virtual Viticulture sessions, Enology sessions on day 2, and OWB Research Updates for all company employees.

For more information on further discounts, preliminary programs, speakers, and special events, visit www.oregonwinesymposium.com.

#oregonwine #oregon #wine #winelovers #instawine #winenews #wineeducation #ORWineSymposium
#winebusiness #winetasting #viticulture #enology

Wine Industry Predictions for 2022 – Wine Intelligence

Wine Intelligence, a global leader in wine consumer research and insights has come up with five predictions for 2022.

Firstly, beverage alcohol has proven to be one of the most resilient product categories in the world in the Covid era, in part due to the industry’s ability to innovate and pivot from a largely restricted or closed channel (the on-premise) to more accessible channels such as e-commerce and convenience retail, where regulation allowed.

The challenges that face the wine industry in 2022 will be similar to those facing beverage alcohol as a whole and consumer goods generally: keep costs down while persuading consumers to trade up; improving the substance as well as the image of the category in light of increasing demands from governments for a step-change commitment to environmental and social responsibility; and making the product relevant to the next generation of legal drinking age consumers.

Here are Wine Intelligence’s five predictions for 2022:

1. Global wine will get serious about ‘light-weighting’ – reducing glass packaging weight

Despite many worthy efforts over the past 3 decades, the wine industry has yet to find a way of peeling consumers away from their love of a 75cl glass bottle. Part of the problem is that glass bottles work so well from a consumer point of view: they seem more environmentally friendly than plastic, they convey reassurance by reflecting the values, tradition, and quality of wine, and they look good on a table. Last month, we reported consumer research that showed 55% considered glass to be a ‘sustainable’ form of wine packaging, compared with 35% who thought that a bag-in-box was sustainable.

Why does this matter? A standard glass wine bottle, with a typical dry weight of 500g, accounts for 29% of a wine’s carbon footprint, according to a 2011 study by PE International for the Wine Institute of California. However, there are many bottles for still wine out there which tip the scales at substantially more – with a dry weight of nearly a kilo in some cases, which pushes packaging’s share of wine’s carbon output to close to 50%, and the total carbon output up by around 10%, according to the same PE study. A lightweight bottle reduces packaging’s share substantially – by roughly 1g of carbon per gram of glass, depending on the proportion of recycled glass used, and that’s before any transportation saving. Remove the aluminium foil capsule, throw in a natural cork (and count the full benefit of carbon sequestration in a cork forest, as calculated by a study from EY, commissioned by cork manufacturer Amorim in 2019), and you have a product who’s packaging is almost carbon neutral.
Why will this change in 2022? Influential figures in the wine industry, such as Jancis Robinson MW and Tim Atkin MW, have long campaigned against heavy wine bottles. Now this powerful group of influencers is rallying a growing coalition to their cause. Crucially, this now includes major retailers, who will use their buying power (and the need to meet their own carbon reduction targets) to strong-arm suppliers into committing to lightweight glass where possible (sparkling wine will still need heavier glass to cope with gas pressure). More pragmatically, strains on the global supply chain, in terms of raw material cost increases, rising fuel and transportation costs, and retailer reluctance to pass costs on to consumers, will force producers to seek out savings wherever they are available. Unnecessary packaging will seem an obvious place to start.

2. Luxury wine will need to burnish sustainability credentials

What does luxury mean today? Chewing over this topic at a gathering organised by upscale Provence wine producer Chene Bleu in London’s Linley Gallery a few weeks ago, Lucia van der Post, the leading style guru and Financial Times columnist, was unequivocal: “luxury will have to show that it is sustainable to appeal to younger consumers”. Her thesis, and that of Xavier Rolet, co-owner of Chene Bleu and former CEO of the London Stock Exchange, was that luxury brands will need to work out how to align their values, and actions, with those of the next generation of consumers. In practice this means committing as much to acting sustainably – both in human and environmental terms. The challenge for luxury brands in general, and luxury wine in particular, is to do this while not compromising the quality of the product itself.

How will this play out in 2022? Around the world, wine drinkers are trading down in volume, and trading up in quality (see also Prediction 3, below), and luxury wine is currently one of the main beneficiaries of this trend. However, when the tide of disposable income starts to ebb, as it surely will when inflation starts eating away at household incomes and travel reopens fully in the next year, consumers are likely to become more discriminatory in how they spend their money. The usual quality-and-heritage pitch will no longer be sufficient.

3. The premiumization train will keep on rolling in 2022

One of the most notable silver linings of the pandemic for the wine industry has been consumers’ willingness to transfer the budgets they would have spent in going out and travel into higher quality food and beverages for the home. After an initial blip during the first period of lockdown, the premium and super-premium price categories of wine, which in the US context means wines selling for USD 10-20 and over USD 20 per bottle respectively, have bounced back by +2-4% in volume terms in the first 6 months of 2021, according to IWSR data. At the very top end, the Liv-Ex Fine Wine 100 Index, which measures the prices of the most sought-after fine wines in the secondary market, hit an all-time high in October, capping an impressive 17 month run of increases.
The trend to spend a bit more has of course been with us since well before Covid and is closely linked with the trend to drink less volume of wine.

Wine Intelligence data shows that 39% of consumers in key consumption markets around the world are actively moderating their wine consumption, rising to over 50% in markets such as Netherlands and Switzerland. Wine producers have also been innovating and promoting their premium offerings assiduously, as the profit margins on these products are orders of magnitude higher compared with low-priced wines, thanks largely to the impact of fixed value taxes that are levied on alcohol by volume.

Three factors will fuel the wine premiumization train in 2022: the reluctance of some consumers – particularly the Boomer cohort –to re-engage with the on-premise and travel, which will reserve more of their budgets for at-home entertaining; the increasing influence of Millennials within most wine markets, who have been the biggest drivers of the drink-less-but-better movement; and a nasty inflationary crunch in the supply chain, combining the disastrous northern hemisphere wine harvest of 2021, which the OIV estimates reduced wine volumes by an estimated 18%, and rising energy, dry goods and transport costs.

4. Wine in cans will become low-alcohol wine RTDs in cans (and small bottles)

Canned wine made huge strides in 2021, both from a technical and a sales point of view, and this will continue in 2022. However, the big innovation will come from industry building new product sub-categories in wine that hit both of the growing trends of the 2020s: wine in a portable, single serve format, with a low-alcohol formulation that turns it from wine to a wine-based sparkling drink. The continued growth of RTDs, especially in the US, is being led by an unprecedented bout of innovation in the category, and remains on course to grow substantially in 2022, according to forecasts from the IWSR. More astute RTD manufacturers are looking for ways in which they can premiumize their offering (tapping into the same trends as discussed in Prediction #3, above), which at the moment is largely focused around spirits-based beverages, using premium branded whiskies, rums and gins to drive consumer demand up the price ladder. There is also an increasing focus on flavour, according to the IWSR’s in-house market experts, which will see a shakeout of poorly formulated, low-value RTDs. Eventually, we think, the same logic of successful RTD innovation – marquee brands, better flavours – will be applied to premium wine products. We expect the first movers here will be the sparkling wine producers, especially Champagne houses with an eye on extending their reach into the low alcohol / single serve space.

5. Wine industry needs to do battle for global talent
Most of the wine industry would agree that it is a fun place to work. Unlike most other industries, wine can offer a unrivalled mix of intellectual challenges. What other industry requires its leaders to be part-farmer, part-chemist, part-production expert, part-salesperson, and part-marketing guru? In recent years it has attracted talented, well-educated, and passionate people from the Millennial generation, drawn by its vast complexity, heritage, and multifaceted work challenges, as well as the romantic notions of working in harmony with nature that wine still manages to conjure.

That’s the good news. The more troubling news is that there are now many other exciting things for the next generation of global talent to work on. The war for their services is taking on a new dimension, driven primarily by the rise of global technology giants backed by vast quantities of investment cash. True, working for TikTok may not offer time in a field, bottling line or upscale retailer, but the financial rewards can be astounding. For the moment, the battle for talent is being fought in other sectors – global accountancy and financial services firms are finding their conveyor belt of talent picked apart by the top technology firms, who can offer starting salaries of well over USD 100,000 per year, according to research published by Payscale.

In on-premise, a field much closer to the wine industry, a corresponding re-valuation of talent is already happening. A survey of its own job postings released in June 2021 by Reed, the largest recruitment agency in the UK, found that hospitality and catering staff jobs were being advertised with salaries 18% higher on average in May 2021 compared with the previous year. The most eye-opening number in this survey was the 43% increase in salaries offered for restaurant kitchen staff.

While wages are obviously important to workers, they are not the only thing that matters. Surveys of younger workers from the Millennial and Gen-Z age cohorts focus on consistent requirements from employment: being part of an ethically sound business, transparency and fairness in the workplace, purpose, autonomy, and opportunities to develop. As with many other industries, wine is going to need to up its game in 2022, not just in terms of money, but also in its ability to offer more holistic rewards to its workforce.

So, what are your thoughts on this? Do you have anything else to add?

#wine #winelover #winetasting #redwine #winebusiness #winetime #winelovers #instawine #whitewine #winestagram #wineoclock #winecountry #wines #winelife #winenight #winewednesday #winenews #winetrade #wineindustry #wineintelligence #wineeconomics
#wine2022 #winetrends