葡萄酒行業(yè)狀況報告

1、Contents1 HYPERLINK l _bookmark1 Introduction 3Harvest and grape and wine supply HYPERLINK l _bookmark26 272 HYPERLINK l _bookmark4 2020 predictions in review HYPERLINK l _bookmark4 6 HYPERLINK l _bookmark27 Moving from acute ov HYPERLINK l _bookmark27 balance in months HYPERLINK l _bookmark5 What w

2、e got right HYPERLINK l _bookmark5 7 HYPERLINK l _bookmark28 Finding balance throug HYPERLINK l _bookmark5 What we got partially right HYPERLINK l _bookmark5 7 HYPERLINK l _bookmark29 Finding balance in un HYPERLINK l _bookmark5 What we got wrong HYPERLINK l _bookmark5 7 HYPERLINK l _bookmark31 Form

3、ats, varietals and HYPERLINK l _bookmark27 ersupply to3 2021 US wine business predictionsand observations HYPERLINK l _bookmark6 8 HYPERLINK l _bookmark7 Top-level forecasts 9 HYPERLINK l _bookmark8 Supply 10 HYPERLINK l _bookmark8 Demand 10 HYPERLINK l _bookmark8 Price 10 HYPERLINK l _bookmark27 28

4、 HYPERLINK l _bookmark28 h shifting channels 29 HYPERLINK l _bookmark29 orthodox ways 30 HYPERLINK l _bookmark31 packaging 32Demographics and marketing HYPERLINK l _bookmark34 35 HYPERLINK l _bookmark35 Consumption patterns: Millennials HYPERLINK l _bookmark35 vs. boomers 36Cumulative negative healt

5、h messaging HYPERLINK l _bookmark40 41 HYPERLINK l _bookmark41 Neo-prohibition, the original 42 HYPERLINK l _bookmark42 Neo-prohibition, the sequel 43 HYPERLINK l _bookmark8 Seven tailwinds10 HYPERLINK l _bookmark9 Seven headwinds 114 Sales channels HYPERLINK l _bookmark10 12 HYPERLINK l _bookmark10

6、 Were total wine sales up HYPERLINK l _bookmark10 or down in 2020? 12 HYPERLINK l _bookmark12 Off-premise sales and changes 14 HYPERLINK l _bookmark14 On-premise sales and changes 16 HYPERLINK l _bookmark17 Direct-to-consumer sales 19 HYPERLINK l _bookmark21 Digital sales and investment 23The year i

7、n review HYPERLINK l _bookmark44 45 HYPERLINK l _bookmark45 Surprise and shock: The first 90 days HYPERLINK l _bookmark45 of the pandemic 46 HYPERLINK l _bookmark48 What is normal during a summer HYPERLINK l _bookmark48 pandemic? 49 HYPERLINK l _bookmark50 The four seasons winter, spring, HYPERLINK

8、l _bookmark50 summer and fire 51 HYPERLINK l _bookmark51 Abnormal economic impacts of HYPERLINK l _bookmark51 this recession 52Conclusion HYPERLINK l _bookmark54 55Endnotes HYPERLINK l _bookmark56 571Introduction“It is not the mountain we conquer but ourselves.”Sir Edmund Hillary, c. 19542020 will g

9、o down as the year in which we answered the heretofore rhetorical question, what else can go wrong? It was a long year of successive “didnt see that coming” issues that had stark impacts on US retail sales, consumer behavior, technology, the economy and the wine business, not to mention on human liv

10、es, which makes speaking about business at all seem trivial.1 That said, lifeincludes business, and we have to keep living.Despite the unimaginable challenges 2020 posed, we can also admire the year for the way that the wine industry known for its glacial adaptation to change took on the obstacles o

11、f a worldwide pandemic head-on and found new approaches to sell. Those adjustments allowed about a third of wineries to have better sales than their prior year,2 while larger producers improved their abilities to get wine into bottles, trucks and grocery stores before sellouts. The lessons learned w

12、ill shape strategy for the next decade.Looking back, it may be hard to recall that at the beginning of 2020, despite a good economy, the wine industry inthe US had some significant cracks showing. It was in a position of acute oversupply, something that should take years to clear. Sales growth was n

13、ear zero for the first time since 1993 and negative in the first two months of the year. Discounting in off-premise channels was prevalent; on- premise sales were declining; and small winery sales growth was positive but dropping into the middle single digits while larger wineries were demonstrating

14、 flat sales growth at best. Grower returns and bulk wine prices were falling as fruit was left hanging in every region in the western states. That was the landscape at the start of 2020, but together the pandemic and the West Coast fires changed the situation in ways nobody could have dreamed.Beginn

15、ing in March 2020, COVID-19 restrictions led to one of the most rapid declines of employment in US history.While all economic dislocations have disproportionate impacts, this recession particularly hurt those service industries that require the close proximity of employees and customers, including a

16、ll leisure, hospitality and tourism businesses and, of course, smaller family-owned wineries.It also affected lower-wage earners more than higher- income earners. Since wine is a beverage that tends to attract higher-income consumers, the net result was surprising strength in the grocery channel for

17、 higher-priced wines, and at the same time, we saw renewed interest in sales of lower-priced wine from shoppers looking for value.Analysts differ on the final industry sales growth rate for 2020. The source data were harder to get and synthesize due to COVID-related work disruptions. But we believe

18、total growth in wine volume was about 1 percent, plus or minus about 1 percent depending on December data. Thats an improvement over the prior year.In the same way this pandemic-fueled recession hit some industry sectors harder than others, it also had a disproportionate impact on business models. P

19、remium and luxury producers that were unable to sell in closedrestaurants and tasting rooms were sent scrambling, while large producers that owned the off-premise channel withlarge partner wholesalers had the enviable problem of being caught short of product to sell as sales rerouted throughgrocery

20、and drugstores.As the year advanced, with all the layoffs and health restrictions impacting our lives, many of us began to think that things couldnt get worse that wed paid our dues, grudgingly adapted to health restrictions we expected to be short-term and would soon see the picture improve,especia

21、lly as restricted reopenings began across the county.But that cautious optimism changed on the West Coast on August 16, when a dry lightning storm from a deteriorating tropical storm off Baja California pushed through Central California into Southern Oregon, sparking hundreds of fires.3 Over the fol

22、lowing 30 days, those fires ruined hundreds of thousands of tons of grapes in California and Oregon, all but ensuring that the worldwide pandemic, as world-altering as it had been, would not be the defining attribute of the vintage.The Glass Fire4 in Napa a month later added to the regional pain, cr

23、eating another smoke event for the North Coast, depressing tourism and ruining or significantly damaging close to 30 wineries in Napa, along with substantial quantities of the best cabernet sauvignon grown in the world.As we consider the possibilities and planning required for the year ahead, we sto

24、p to consider our top-level advice from the Annual State of the Wine Industry Report 2020: “The winners of tomorrow will be the wineries thatcritically evaluate their organizations capacity to react, develop solutions and execute quickly, then evaluate their success or failure to continuously improv

25、e. Those companies will take sales from those that continue to run their businesses the way they have for the past 25 years and stick with strategies that have always worked before. The winners tomorrow will be intrepid and willing to try new approaches that change the status quo.”O(jiān)bviously, we were

26、nt talking about wineries reacting to the pandemic, since that wasnt an issue when the report was released and while we have a decent track record, we didnt see that one coming.The message from last year still proved accurate and only accelerated the obvious need for change. For many wineries, the p

27、andemic was the final straw that forcedaction and for those that adapted, their reward was often better year-over-year results at the expense of another wine company.In the weeks following the shelter-in-place orders, the average family winery saw its internet sales rise from less than 1 percent of

28、its sales to more than 10 percent of total sales.Wineries that made the effort to collect and maintain good customer lists, including cell numbers, started calling for business. Phone sales, which didnteven register as a sales channel in 2019, became a meaningful source of revenue for many wineries

29、that tried it in 2020.Digital video sales strategies also flourished and have replaced a portion of the in-person experience. Wineries discovered how to take the experience on the road,5 forever breaking the long-held belief that awinery experience could only take place at the winery.While all atten

30、tion during 2020 was rightly riveted on personal and business survival with everyone in reactionmode, long-standing industry issues were still present below the surface. These included a well-financed andcoordinated anti-alcohol movement; disengaged, health- minded young consumers; unevolved marketi

31、ng; and a lack of investment in digital sales, all of which will severely impact the wine business long after this pandemic ends unless we pay attention.Those issues have been driving the disappointing sales growth metrics over the past six years. With boomers accelerating their retirement due to CO

32、VID-19,6 the need to attract young consumers is more pressing than ever. The successes of the past 25 years cant be repeated without evolving the industry message and without an industry marketing organization coordinating that message and providing a counterargument for anti-alcohol claims.To say 2

33、020 was a difficult year is an understatement. While bruised, most of us are back at our craft with hopeful anticipation as we move toward a COVID-free world. While ITo say 2020 was a difficult year is an understatement. While bruised, most of us are back at our craft with hopeful anticipation as we

34、 move toward a COVID-free world.While I can say with confidence that 2021 will be better, I can also say that “normal,” when we get there, will be different from what we left. There are new issues that need to be planned for.can say with confidence that 2021 will be better, I can also say that “norm

35、al,” when we get there, will be different from what we left. There are new issues that need to be planned for.We believe this report will inform your teams thinking about the niche you occupy within the wine business,help you anticipate potential 2021 scenarios that will require planning and guide y

36、ou toward joining other successful wineries that have adapted to changed market conditions and new opportunities. We hope it will inspire you to get creative about possibilities with your strategic planning, and that engaging in that process may help you improve your chances of success in the year a

37、head.22020predictions in reviewWe have been extensively researching the wine business since 1991 and making public forecasts for 20 years. Some yearswe properly characterize a market change. In other years, our findings might be off in timing or even wrong. The events of 2020 introduced more chaos t

38、han anyone could have predicted, but we will once again review the forecasts made last year, just to keep score.Our lead statement last year was:“Our 2020 forecast is made with the expectation that the US economy will remain steady, without a recession.”In January, we were focused on a record bull m

39、arket amid the uncertainties of trade wars in China and the EU and a looming US presidential election. We obviously did have a recession in 2020, albeit from an unpredictable angle. That detracted from our normally prescient performance, as youll see.What we got rightWe predicted that the 2019 Calif

40、ornia crush would be 3.95 million tons. Harvest from 2019 came in at3.9 million tons.7 Given the number of unharvested grapes from the 2019 season, even getting within 50,000 tons was close to a miracle with so much acreage being uncontracted.We led the chorus, starting in 2019 and extending into ea

41、rly 2020, that the grape supply in California was acutely long.We noted that we were transitioning to a period of low- to-negative sales growth as an industry. That statement continues to be accurate, though somewhat obscured by strong off-premise sales.We predicted that the 2019 California crush wo

42、uldbe 3.95 million tons. Harvest from 2019 came in at 3.9 million tons. Given the number of unharvested grapes from the 2019 season, even getting within 50,000 tons was close to a miracle with so much acreage being uncontracted.What we got partially rightWe said bottle price increases would be rare

43、in 2020. The trend of increasing price had clearly waned across the business, and with the acute excess, discounting was the only normal way to remove excess volume.We never considered that smoke and fire could destroy supply. It turned out that family wineries selling direct to consumer had to disc

44、ount after shelter-in-place orders, but bottle prices for larger production wineries with access to grocery stores firmed and rose as consumers flooded the off-premise channel.What we got wrongWe predicted a sales value growth range between3 percent and 7 percent for the premium wine segment and bet

45、ween minus 2 percent and 0 percent for total wine sales.8 The total forecast was close, but the guess on the smaller premium wine segment was materially high. Sales growth in that segment will likely come in between minus 5 and minus 10 percent.With the acute supply excess at the beginning of 2020,

46、we thought we would see good sales volume growth. Sadly, that prediction didnt pan out, and if December 2020 is soft, volume growth for still and sparkling wine will come in close to 0 percent.With long supply and flat-to-lower sales growth at the start of 2020, we offered a prediction that grapepri

47、ces would take years to stabilize and would do so at lower levels than those of the prior several years. As discussed later in this report, the ensuing unpredictable events of 2020 brought current grape supply into balance, and grape pricing actually improved modestly instead of lingering at low lev

48、els. That said, there isstill too much planted acreage on the West Coast, and grape pricing is below that of prior years.We noted that premiumization was nearing its apex as a trend. However, shelter-in-place orders drove up the sale of higher-priced wines in grocery stores. The same cant be said fo

49、r direct pricing in smaller premium wineries where discounting was common.32021 US wine business predictions and observations“Chaos was the law of nature; order was the dream of man.”Henry Adams, 19072020 was a year of reacting, but 2021 will be a year of two phases: continuing to execute in a COVID

50、-restricted mode during the first part of the year, then moving awayfrom emergency responses once the wide distribution of a vaccine signals a move into a post-COVID world. The timing is still an unknown as of the date of this writing, but there is a consensus forming that vaccines will be widely av

51、ailable around early summer. What that will mean and how the wine industry will navigate the return of normal life are critical parts of 2021 planning.The post-COVID world wont be the same one we left in early 2020. There will be many permanent changes we will need to consider, such as the shift to

52、working from home, the increasing relocation of consumers to the suburbs and the acceleration of consumer online sales, which will take sales away from other channels. Even the best-run wineries in 2019 wont find the same level of success in 2021 unless they evolved in 2020 and continue to do so in

53、2021.At a very high level, the channel shifting that took place in 2020, particularly in off-premise grocery, will unwind with many nuances that will be discussed more fully later in the report.Restaurant sales will return in 2021 when restrictions are loosened, with locals leading the way in the to

54、urist towns of Wine Country; however, we wont see a return to pre-COVID on-premise conditions for years if ever. In the longer term, the permanent closures of restaurants will result in reduced selling opportunities on-premise. Restaurantswill also incrementally move away from full-service seated mo

55、dels to new revenue-generating strategies, particularly home delivery and curbside to-go models, neither of which favors alcohol sales. The expectation for many restaurants is that their wine inventories will be minimized and streamlined into smaller offerings.Obviously, the largest variable in timi

56、ng for a return to normal business conditions is a fully immunized population. Making a firm prediction is well outside our abilities as industry analysts, but because the timing of vaccinations does impact planning and budgeting, we must make an educated guess.Getting a green light for unrestricted

57、 business openings before the summer of 2021 seems overly optimistic as of this writing. Many unknowns remain, including the FDAs degree of rigor, the production of sufficient doses, solving for countless logistics questions surrounding distribution, unanticipated side effects that might slow the pr

58、ogram, the physical time needed to vaccinate an entire population twice and a material anti-vaccination movement.9,10,11While large public companies have had an easier time weathering the pandemic thanks to their ability to raisemoney, small companies (such as local restaurants and wineries) have no

59、t been so fortunate. A second round of fiscal stimulus was held up by party politics in 2020 and only passed at the end of the year, but hopefully that will help to bridge the economy through what are likely to be difficult conditions in the spring.Top-level forecastsOur 2021 forecast is made with t

60、he expectation that the US economy will continue to recover as vaccines and therapeutics gain traction.The pandemic experience will have owners thinking more about the strategy of focusing sales intonarrow channels.The experience of repeated fires and smoke damage will prompt owners to consider the