wine sales expected to grow for now
Silicon Valley Bank surveyed hundreds of West Coast wineries for their annual report, which says sales growth will boom in the next five years.
"Despite news to the contrary in recent months, wine supply is in balance heading into 2014 and we expect the highest rate of sales growth since the recession, despite a tough economy," said Rob McMillan, founder of Silicon Valley Bank's Wine Division and author of the report.
"While this year is ultimately expected to be a healthy one for US wineries, if we peer into the future 5-7 years, we believe the headwinds will increase significantly as more Baby Boomers retire," McMillan said. "50 and 60-somethings purchase about half of fine wine in the US. As they retire, and their purchasing power declines, the younger generation can't pick up the slack immediately, due to lower income, and access and the proclivity to purchase more foreign wine. Astute fine wine producers will be adjusting their strategies accordingly."
According to the bank, in fine wine, sales growth is predicted to be in the range of 6-10 percent in 2014, the first increase in three years. Bottle prices will remain stable, as increased grape and bulk wine costs are not being passed on. Luxury wines and $10-$18 bottles will see greatest growth in demand.