Silicon Valley Bank - Home Select service for login: SVB Online BankingPrivate BankingSVB Capital Limited PartnersSVB Asset Management ReportingU.S. Bank TrustNow EssentialsBusinessCard: CardholdersBusinessCard: AdministratorsCorporate Multicard: CardholdersCorporate Multicard: AdministratorsElite Card: CardholdersElite Card: AdministratorsPrivate Bank Elite Card 2017 SVB Wine Report 2017 OUTLOOK: PREMIUM WINE SALES AND PRICES TO RISE Rob McMillan, founder of Silicon Valley Bank’s Wine Division, writes one of the wine industry’s most authoritative annual reports that assesses current conditions and provides a unique forecast based on a survey of more than 500 wineries. MAJOR FORECASTS FOR 2017: Wines sold between $12 and $25 will grow in demand as will high-end luxury wines with an established brand. We expect to see small price increases in these segments, with volume and price drops for bottles priced under $9. Premium wine sales will increase between 10 and 14 percent above 2016 levels.

Per capita consumption faces crosscurrents with retiring wine-loyal baby boomers being replaced by less affluent millennials who are ambivalent about their alcoholic beverage of choice. If economic conditions continue to improve, however, per capita consumption should be slightly higher in 2017. Today, millennials are beginning to affect the lower price range of premium sales. Their presence is most visible in the $8 to $11.99 red blend category, but they gradually will shift from blends to varietal wines or imports as their incomes grow.best tasting cheap sweet wine Even with winery M&A facing headwinds from higher interest rates, winery acquisitions should remain quite active through 2017.buy cheap wine cooler Farm labor supply and costs are the dominant concerns in the wine business in 2017.best wine to bring back from spain

STATE OF THE WINE INDUSTRY 2017 Download the State of the Wine Industry 2017 In this 16th annual State of the Wine Industry Report, he finds strong market conditions overall and identifies major trends that may signal adjustments in consumption patterns and segment prices. Report findings were discussed in a webinar, featuring SVB Wine Division Founder and EVP Rob McMillan. Industry leaders joining him in 2017 were Amy Hoopes, President, Wente Vineyards, Dan Leese, President, V2 Wine Group and Paul Mabray, VP, Social Media & Reputation, Avero, LLC.best wine ingredient kits THE 2017 ANNUAL WINE CONDITIONS SURVEYbest wine store new hampshire Each year, over 500 wineries participate in the SVB Annual Wine Conditions Survey and survey highlights are included in the State of the Wine Industry report.top wine trends 2015

In 2016, overall wine industry financial performance continued to strengthen. Eight in 10 wineries (83 percent) in our latest survey reported that they expect fiscal 2016 to be a good, better or one of their best years yet. Full survey results, including detailed analysis and slides, only are available to wineries that participate in the annual survey. If your winery is not already participating, please send a request to be included in the next survey to Penny Northrop at . This survey is conducted each fall. ANNUAL CHANGE IN RESTAURANT SALES Restaurant wine sales have declined over the past three years largely due to changing consumer behaviors. For small family owned wineries, access to restaurant sales is further negatively impacted by wholesale dominance in chains. Consistent with that view, only the wine segment larger than 250,000 cases increased restaurant sales year over year. Source: SVB Annual Wine Conditions Survey GROWTH IN DIRECT SALES SHARE

The Granholm decision legally opened the door to direct shipping. Distributor consolidation kicked small wineries out that door and into the cold world of Direct-to-consumer sales. Direct sales have been on a steep growth ramp since and now represent 59% of the average winery’s total sales. LIKELIHOOD OF WINERY SALE WITHIN FIVE YEARS SVB predicted the current hot M&A winery market back in 2008. Several years in with interest rates rising, will we see a slowdown in 2017? Our prediction is the trend will continue unabated for at least another year. Supporting that view, when asked about their desire to sell in the next five years, 30 percent of wineries say that they are planning to sell or would consider the possibility. CHANGE IN COHORT SHARE OF WINE SALES Baby boomers are responsible for growth in the U.S. fine-wine sector in the past 20 years and still make up the largest demographic share of wine consumers, at 41 percent. However, their consumption has been declining for several years now, replaced by less affluent millennial consumers who are more ambivalent about their alcoholic beverage of choice.

2016 REPORTED SALES AND CASE GROWTH Sales have continued to grow in the premium wine market through 2016, with both case and price growth through most price segments. The chart indicates demand is strongest in the segments below $30, flattening somewhat between $30 and $60, and regains strength above $60.SVB Annual Wine Conditions Survey About The SVB Wine Report 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 over 500 wineries. About SVB Wine Division Silicon Valley Bank’s Wine Division Founded in 1994, SVB’s Wine Division offers financial services and strategic advice to premium vineyards and wineries. With one of the largest banking teamsin the country dedicated to the wine industry, SVB’s Wine Division has offices in Napa and Sonoma counties and primarily serves clients in the fine wine–producing regions along the West Coast of the United States.

This material, including without limitation to the statistic information herein, is provided for informational purposes only. The material is based in part on information from third-party sources that we believe to be reliable but which have not been independently verified by us, and for this reason we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice, nor is it to be relied on in making an investment or other decision. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation, offer or recommendation to acquire or dispose of any investment or to engage in any other transaction. Silicon Valley Bank is not selling or distributing wine or wine-related products. Through the online informational platform, SVB Cellar Selections, Silicon Valley Bank provides material to employees about a variety of premium Silicon Valley Bank winery clients and their wines.

These communications are for informational purposes only. Silicon Valley Bank is not responsible for (or a participant in) the sales of any wineries’ products in any fashion or manner and makes no representations that any promotion or sales of alcoholic beverages will or will not be conducted in a lawful manner. Further, Silicon Valley Bank disclaims any responsibility or warranty for any products sold by wineries or other wine industry service providers. ©2017 SVB Financial Group. SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license. State of the Wine Industry 2016 State of the Wine Industry 2015 State of the Wine Industry 2014 State of the Wine Industry 2013 Silicon Valley Bank Expands in New York SoCal Startups Speak Up About the Challenges They’re Facing in 2017 Sientra Secures $20 Million Credit Facility from Silicon Valley Bank Despite Growing Awareness, Startups Are Making Slow Progress Bringing Women into Leadership How Snap's IPO Will Affect the Hot LA Startup Market — Interview with SVB's Rob Freelen