About the report

The Silicon Valley Bank (SVB) State of the Wine Industry Report provides a comprehensive and entertaining view of current conditions in the USA wine industry, and a number of predictions for sales growth, pricing, supply and demand for the forthcoming twelve months. It is published annually.

Report summary 2020

The 2020 report looks at the emerging oversupply in the US wine market and the declining demand, particularly among younger drinkers. It identifies seven headwinds and seven tailwinds that are expected to affect wine sales in the next 12 months, and makes a number of predictions for sales in 2020, including:

• sales growth in the premium wine segment of 3-7 per cent in value but an overall decline in volume and flat value growth in off-premise sales;
• ongoing difficulties in engaging millennials in the face of limited financial capacity, anti-alcohol health messages and a preference for other alcohol categories such as spirits and craft beers as well as a small but emerging demand for cannabis-based products;
• a plateau in the premiumisation trend, evidenced by rare bottle price increases in 2020 and,
• a fall in grape and bulk wine prices to the lowest level in at least the past five years.

Sections of the report include:

• Grape and wine supply
• Wine sales
• Demographics and marketing
• Land and M&A
• Cumulative negative health messaging

Source

The report is prepared by Silicon Valley Bank’s Wine Division. The report is based on SVB's in-house expertise as one of the largest bankers to the West Coast wine industry, a proprietary database of more than a decade of winery financials, ongoing research, and an annual survey of more than 500 wineries. Other reports can be found on their website.