The record breaking wildfires that hit California and wine country in late 2017 caused a splash in the industry’s headlines highlighting the suffering and speculation that resulted from the disaster.
Because of its widespread impact, much of last year’s news in the wine market focused in on the assumed loss caused by the fires which sparked doubt and clouded the future forecast of business owners and wine enthusiasts across the US and world. However as the smoke has cleared, the industry is now looking to new sources and findings to better understand where the market is headed. Shedding light on the current state and future trends of the industry, the State of Wine 2018 report – which comes from a source in California’s silicon valley – helps provide more details into the latest updates and data circulating in wine.
Among the information provided in the annual report is that which highlights the trajectory of the wine industry throughout the last 20 years and the insights that can be gained from the market’s fluctuations. More specifically detailed are the report’s findings around the type, price-point and origin of wines dominating today’s industry and what we can learn from this when planning for the future.
As with every industry, the consumer base is also changing and the growing demographic of new and aging wine drinkers is pushing new influence and interest into the long-time traditional industry. This is outlined within the report that highlights retiring baby boomers and millennials driving a rotation of consumer preferences. Also noted are the specific trends seen in the new wine consumer demographics, sharing the change in millennials’ consumption patterns that has shown a migration to different wine types while Gen X consumers are predicted to start dominating the fine wine demographic in the US in future years. Because of this changing landscape, businesses are being forced to adapt their practices and offerings to best accommodate these trends.
“As the marketplace evolves, so will the success and development of longtime players in the industry who must keep up with the changing demand and tastes of consumers in order to compete.” shares Marcus Hiles, 2010 Wine Collector of the year who became a widely recognized collector in the industry after his record breaking wine auction with Sotheby’s Hong Kong that sold nearly $7 million worth of luxury wine from his collection.
Through his years as a leading collector in the fine wine market, Marcus also adds how the continuing expansion of suppliers and consumers both in domestic and foreign markets are also changing the footprint of the industry. “The wine industry is one structured around supply, and through the expanding group of new businesses entering the market that are bringing more variety and volume to the table, they are subsequently working to drive down cost and increase options – even in the luxury wine industry.”
Traditionally speaking, the consumer experience in the wine industry has always been front and center but the way it operates is also growing away from its roots in location-based operations such as wine tastings, tours and in-store purchases and gearing more towards the direct-to-consumer model. Whether through monthly subscription services, personalized blends ordered via app or online wine purchases- the experience is becoming much more about convenience and accessibility.
Perhaps the most valuable information provided in the State of Wine report hones in on this foreseeable change sharing, “Successful wineries 10 years from now will be those that adapted to different consumer with different values. Successful companies will be those that evolve retail strategies away from the winery location as the sole point of experience and add other, scalable means of delivering the experience — and the wine — to consumers where they live.”
While we now have a clearer picture of what is to come in the evolving wine industry and all its different facets, we will have to watch and see how both businesses and consumers adapt and adopt change to fully know what’s next for the market built on vineyards across the world.