Wineries
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 11,620 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 wine industry has seen an increase in the consolidation of vineyards and wineries, particularly among smaller, family-owned operations.
Increased Regulation And Taxes
The wine industry is subject to strict, frequently changing federal and state regulations for virtually every aspect of operations, from production to advertising.
Industry size & Structure
The average winery employs 4-5 workers and generates $2.2 million in annual revenue.
- There are about 11,620 wineries in the US, employing about 58,000 employees, and generating sales of about $24 billion.
- The US wine-making industry is characterized by thousands of small, family-owned wine growers and wineries, together with a few very large, sometimes publicly held, wine conglomerates.
- The four largest wineries in the US -- E&J Gallo, The Wine Group, Trinchero Family Estates, and Constellation Wines -- generate about 41% of the industry's revenue.
- The top wine-producing states are California, Washington, and New York. 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 average winery relies on seasonal contract workers for many growing and production-related jobs.
- US winemakers produced about 752 million gallons of wine in 2022, the lowest total in a decade.
- US export sales of wine exceed $1.2 billion annually to more than 150 countries worldwide.
Industry Forecast
Wineries Industry Growth
Recent Developments
Aug 29, 2024 - Grape Glut
- A surplus of grapes combined with an increase in imports and dwindling demand for wine has resulted in a glut of uncontracted grapes, AgWeb reported in August. The surge in unharvested grapes that still don't have a buyer is stressing grape producers and stoking fears the oversupply could ultimately force some farmers out of business. The current grape glut is the first time in over a decade that farmers have faced uncontracted grapes on vines as wineries cancel contracts, according to AgWeb. Global wine consumption began tapering off around 2017 and 2018, but the pandemic hid the problem. Now, with baby boomers growing older and younger people consuming less alcohol, retailers are stocking less wine. "It's pushed the inventory back upstream, basically to the wineries, who then turn around and cut grape purchases to the growers,” explained Stuart Spencer, executive director of California’s Lodi Winegrape Commission.
- According to the latest US Bureau of Labor Statistics data, producer prices for wineries inched up 0.7% in July compared to a year ago after rising 7.5% in the previous July-versus-July comparison. Employment by breweries, wineries, and distilleries grew 3.4% year over year in June to a new high for the industry. Employment has grown with the number of wineries, which topped 11,620 in 2023, and is somewhat seasonal, peaking during harvest season and the holidays.
- A growing number of wine producers are seeking certification demonstrating their commitment to the fair treatment of agricultural workers, The New York Times reports. So-called “social sustainability” certifications can come from local wine-oriented organizations like Napa Green in California and LIVE in the Pacific Northwest. Also, more growers worldwide are seeking B Corp certification from B Lab, which promotes the notion that companies benefit by working for both profits and the social good, as well as being good stewards of the environment. The roughly 100 wineries worldwide with B Corp status include the US growers Spottswoode in Napa Valley and Chehalem in Oregon. To achieve B Corp status, wine producers are assessed for how they manage water and waste, how harmonious their agricultural practices are with their environment, whether they promote biodiversity, and how they manage their workforces, according to NYTs.
- The volume of wine shipped directly to consumers (DTC) sank 10% in March compared to a year ago after falling 6.5% in 2023 versus the prior year, the second consecutive year of declining volumes, WineBusiness Analytics/SOVOS ShipCompliant reported in April. Meanwhile, DTC shipment value fell 3% year over year to $457 million in March, which is its lowest value since 2020, according to the report. Still, due to higher prices, the average bottle price of shipments climbed nearly 8% versus a year ago to $57.61 – the third-highest average ever recorded. California wineries saw a significant 14.4% drop in winery shipment volume to their customers. WBA noted that non-West Coast US wineries account for a small but active component of DTC shipments. Their value grew 2% in the 12 months ended March to $228.9 million, while volume fell 1% to 792,711 cases.
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