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Are EU Imports Poised To Kick U.S. Wine Biz Butt In The Near Future? | 1 Wine Dude

Are EU Imports Poised To Kick U.S. Wine Biz Butt In The Near Future?

Vinted on April 24, 2012 binned in wine news
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Last week, Silicon Valley Bank and Vintank teamed up to present a rather well-researched and thorough look at what the wine industry has in store for itself in the near future.

Predictions are, of course, only for the exceedingly brave (or exceedingly foolish – or both), since they’re ripe for the 20/20 vision sniper cross hairs of retrospective perspective later. But I tend to admire the cojones it takes to put your thoughts out on a public limb, opening it up for those who would use them as a perch for even greater ideas, not to mention as fodder at which any thick-skulled woodpeckers can take pot shots. An example: the bold predictions that Vintank made about the wine biz for 2011, many of which didn’t materialize in 2011 but are starting to show signs of instantiating themselves in early 2012 – in fact, the SVB report bolsters several of those bold Vintank 2011 predictions (the growth of direct wine sales, for example, in what they term “the 5th Column), for those who have more pachyderm-like memories (and are keeping score). Vintank: 1; Woodpeckers: 0?

You can download the report, its summary slides, and an even higher-level infographic summary at SVBs website.

While the results (understandably, given the source) have a serious CA-focus, there are tidbits therein that the worldwide wine industry can take away from it.

For example, U.S. wine producers may be set for shorter supply, increased prices, and a big challenge from EU country wine imports.

Not exactly good news for the U.S. wine biz…

The problem for the U.S. are recovering grape prices, and what is clearly a situation of decreasing inventory for many wineries. This could put upward pressure on wine bottle prices and downward pressure on flash sale companies that have based their business models on the oodles of unmovable inventory that plagued wine producers in recent lean economic years.

While all of that not-so-goodness is happening, the debt crisis in the EU is driving the Euro down while the dollar gains, which means imports from the EU could be available at bargain prices, and so are going to start to look very attractive to U.S. merchants.

The SV report also talks about the pervasiveness of social media, particularly in reaching… not Millennials (a segment that will undoubtedly continue to grow in importance but are still small potatoes when it comes to real current spending on luxury bottles), but Baby Boomers, who are spending the big bucks on wine right now. By the way, if you still want to keep your head in your… sand and deny that big changes are coming eventually with those Millennials (or write that change off as too-far-away-to-care-about), consider just how fundamentally – and quickly – things have changed to get us to the near-constantly-connected state where we are today.

The report also mentions that, ironically, the bigger the wine producer, the more positively their view of social media; the smaller, the more negatively they view wine online. I call that ironic because it’s clearly the smaller producer who can enjoy the most power and leveling-of-market-playing-field by wielding social media properly.

As you can see, lots of food for thought in all of this for the super-wine-geeky – particularly those of us who dig EU wines, and especially dig them when the prices are right – and especially for the U.S. wine producer, for whom the new SVB report should be required reading.

Think SVB is on the money here? Or are they so out on a limb that their projections deserve a ferocious bout of woodpecking?

Cheers!

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