US wine producers must adapt to new consumers to survive
The US wine industry is coming to the end of a 20 year period of unparallelled growth, and as a result wine producers must adopt new strategies if they want to replicate the success they have enjoyed to date, and to ensure their future.
This is according to Silicon Valley Bank’s wine division EVP and founder Rob McMillan, who warns that producers who rest on their laurels risk getting left behind.
“The factors that made you successful to this point will not enable you to sustain that success,” he writes in his annual industry wine report.
“This means the winning sales strategies you are leveraging in the operating environment today will slowly prove fallible tomorrow. “
Successful wineries 10 years from now, he added, will be those that adapt to the changing face of consumers, who may use the internet in increasingly complex and interactive ways, are frugal and have less discretionary income than their predecessors.
“Successful companies will be those that evolve retail strategies away from the winery location as the sole point of experience and find other, scalable means of delivering the experience — and the wine — to consumers where they live.”
McMillan said that the US wine industry is coming to the end of a long period of growth, which has seen regular increases in volumes and price. “But sustaining routine increases may be difficult for wineries given the low-growth, low inflation environment,” he said. “Price increases will be hard to pass through in 2018 so overall pricing will be flat.”
For highlights of the report, and McMillan’s forecast for the outlook for the US wine industry, see here.