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 11,700 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.

Increased Regulation And Taxes

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

Industry Consolidation

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

Industry size & Structure

The average winery employs 5-7 workers and generates $2.2 million in annual revenue.

    • There are about 11,700 wineries in the US, employing about 61,300 employees, and generating sales of about $24 billion.
    • The 4 largest US wineries, which include E&J Gallo, The Wine Group, and Constellation Wines, generate about 41% of total industry 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.
    • The average winery relies on seasonal contract workers for many growing and production related jobs.
    • 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.
    • US export sales of wine exceed $1.7 billion annually to more than 150 countries worldwide.
                                    Industry Forecast
                                    Wineries Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Feb 28, 2024 - Producer Prices Increased in 2023
                                    • The producer price index (PPI) for wineries, which measures prices before reaching consumers, rose about 3% in December compared to a year ago after climbing 8.7% in the previous annual comparison, according to the US Bureau of Labor Statistics. Rising consumer spending last year helped support higher wine prices. Meanwhile, employment by breweries, wineries, and distilleries grew by 2% year over year in December, according to BLS employment data.
                                    • The unusually cold, wet, and snowy winter is being credited for the “exceptional” 2023 California grape harvest, with many vintners predicting the 2023 vintage will be one of the finest in years, according to the Wine Institute’s 2023 California Harvest Report. A late start to last year’s harvest had some vintners picking grapes into late November. 2023's weather conditions are expected to produce wines with beautiful flavors, vibrant acidity, and remarkable balance – especially for Tempranillo and Syrah– per the report. After recent years of severe drought in California, last year’s heavy rains helped replenish the reservoirs and nourish the vines resulting in extra canopy growth that led to 5% to 15% higher yields for most varieties. California produces about 80% of the nation’s wine, making it the world’s fourth-largest wine-producing region, according to the Wine Institute.
                                    • A growing number of wine producers are fermenting grapes, apples, and other fruits together, or blending wine and ciders, with delicious results, The New York Times reports. Natural winemakers are among the producers experimenting with these innovative beverages, most of which are not yet widely available, according to NYT. (Natural wine, also known as low-intervention wine, is organic wine fermented without additives using traditional winemaking methods.) Natural winemaker Scar of the Sea in San Luis, Obispo blends different grapes with Newtown Pippin apples each year — Gamay grapes in 2021 and palomino grapes in 2022 – to produce its hybrid blends. Some producers began by making ciders or wines and branched out or formed collaborations, per NYT.
                                    • The wine industry is facing a global wine glut, according to The Wine Economist (TWE). The French government has announced plans to spend 200 million euros (about $212 million) to fund the destruction of surplus wine production in the country. And Australia is facing a huge surplus of 2.8 billion bottles. In the US, big stocks of bulk wine are for sale in California and there are thousands of acres of surplus vineyards in Washington. Chateau Ste. Michelle announced in August that it would purchase 40% less fruit over the next five years. Unlike previous surpluses, the current oversupply of wine appears to be due more to insufficient demand than oversupply and potentially longer lasting, according to TWE. Changes in consumer behavior and preferences including the rise of the sober-curiousness movement among younger consumers, rising wellness trends, and increasing competition from other alcoholic and nonalcoholic beverages may be to blame.
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