Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 11,000 wineries in the US produce and sell a wide range of wines. Wines can be broadly categorized into three groups: still wine, often referred to as table wine; sparkling wine, effervescent wines like champagne; and dessert wine, such as brandy. Most wineries operate their own vineyards for grape production, but may purchase a large percentage of their needs from independent growers.

Industry Consolidation

The industry has seen an increase in the consolidation of vineyards and wineries, particularly smaller, family-owned operations.

Increased Regulation And Taxes

The wine industry is subject to strict, frequently changing, federal and state government regulations covering virtually every aspect of operations from production to advertising.

Industry size & Structure

The average winery employs 4-5 workers and generates $1.8 million in annual revenue.

    • The wine making industry in the US is characterized by thousands of small, family-owned wine growers and wineries, together with a few very large, sometimes publicly-held, wine conglomerates.
    • There are over 11,000 wineries in the US, employing about 48,600 employees, and generating sales of about $20 billion.
    • The average winery relies on seasonal contract workers for many growing and production related jobs.
    • US export sales of wine exceed $1.6 billion annually to 156 different countries.
    • In California, about 615,000 acres are devoted to wine grapes, growing over 110 varieties of grapes and producing an average of 3-4 million tons of grapes annually.
    • The 4 largest US wineries, which include E&J Gallo, The Wine Group, and Constellation Wines, generate about 41% of total industry revenue.
    • The greatest wine producing states are California, Washington, and Oregon.
                                    Industry Forecast
                                    Wineries Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Mar 30, 2023 - Storms Benefit Wineries
                                    • The storms that battered California this winter have been great for wine, the BBC reports. The relentless deluge has provided desperately needed water to the state’s wineries, which have endured three years of drought, extreme wildfires, and the rising threat from climate change. The atmospheric rivers that have swept across California since late December have replenished the groundwater and refilled reservoirs, giving winemakers hope for a productive growing season as water has a direct impact on how much a vineyard can produce in any given year. Indeed, some Napa Valley vintners are celebrating the extremely wet weather. “We need the rain, desperately," said Stu Smith of the Smith-Madrone Vineyards, adding "We want more."
                                    • Thousands of small businesses were impacted by the March failure of Silicon Valley Bank (SVB), the Associated Press (AP) reports. Among those caught up in the turmoil were hundreds of vineyards and winemakers who deposited cash with SVB, which also served as a critical lender to vineyards. Many SVB customers are reevaluating their banking services and considering making changes to ensure the safety of their deposits. The AP cited experts who said it’s probably a good idea for small businesses to diversify funds among banks and make sure they stay in close contact with their bankers. Some small businesses are mulling switching their business to a big bank. About 55% of small businesses use a large bank as a financial services provider, 43% use a small bank, and 13% use a credit union, according to The Federal Reserve’s 2022 Small Business Credit Survey.
                                    • The number of US wineries grew by 3% last year, marking another year of growth that extended a long-term trend in effect for at least the past decade, Wine Business reported in February. The United States currently has 11,691 wineries, nearly 400 more than in 2021 and 1,215 more than in 2020, according to the Wines Vines Analytics Winery Database. Since 2019, the number of US wineries has grown at a rate of 4%, matching the growth rate since 2010. The top five wine producing US states are California with 4,973 wineries, followed by Oregon with 908, Washington (906), Texas (499), and New York (453). Other wine producing states include Pennsylvania (393), Virginia (356), and Ohio (329). With total US wine sales expected to remain flat or even decline this year, winery growth may begin to slow.
                                    • The wine market struggled last year despite strong growth rates in the over $15 price segment during the holiday season, according to distributor depletion data from the Wine & Spirits Wholesalers of America's SipSource. Wine ended 2022 down 7.1%. Longer term, however, the decline was less sharp, down an average of 3.9% between 2019 and 2022. SipSource analysts predict growth in the wine category won’t be easy this year amid significant economic uncertainty and predict that achieving an overall volume loss of 3.9% in 2023 would be seen by many as a successful year.
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