SVB wine report 2023

Think the WC is full of gloom and doom? This year’s annual wine industry survey takes gloom and doom to places where even I’ve never been

The annual Silicon Valley Bank state of the wine industry report, released yesterday, is so full of gloom and doom that it sounds like I wrote it after a too long day tasting $18 smoooth red wine. But Rob McMillan, the study’s author, is hardly a curmudgeon.

Which should tell you the desperate situation facing the wine business – too high prices, too few drinkers, too few people interested in wine, and no one in wine much concerned.

“This is obviously a place where none of us want to be,” said McMillan, speaking to an international webinar. “If a rising tide floats all boats, then a shrinking tide is the opposite. In that case, we’re in a Darwinian model, where the only way to get business is by taking it from someone else. And that’s obviously a place where we don’t want to go.”

Among the report’s findings:

• A decline in wine sales and demand — “negative volume growth” — for a second year in a row, as wine continues to lose market share to spirits.

• The two generations younger than the Baby Boomers are not going to flock to wine as they get older, no matter how much wine thinks they should: “Consumers younger than 60 have a lower share of wine consumption compared to what they did in 2007,” while about one-third of those 21 to 29 drink alcohol — but not wine. And expecting them to suddenly embrace wine just because is a march of folly.

• The divide between Big Wine, the 100 or so largest producers that control some 90 percent of U.S. production, and the other 10,000 or so small, premium producers is the biggest in memory. Which means the biggest producers have very little in common with helping the rest of the business survive.

• The lack of a strategy to promote wine – partly because of the divide in the business, partly because not everyone sees a problem, and partly because wine is wine — is having a consequence that’s obvious to anyone who looks at the numbers.

In fact, even the little good news for some wine producers isn’t especially good for the rest of us. There is growth for wines costing $15 or more, but since most wine sold costs less than $15, the trend is only benefiting the few.

Photo: “News Flash–Heat Bad for Productivity” by moria is licensed under CC BY 2.0.

More SVB wine reports:
• 2022
• 2021
• 2020