2020 US Wine Currents Oregon Wine Symposium FRANCE 485,741,469 12,401,969 2.6 2,921,598 ... Silicon

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Transcript of 2020 US Wine Currents Oregon Wine Symposium FRANCE 485,741,469 12,401,969 2.6 2,921,598 ... Silicon

  • 2020 US Wine Currents Oregon Wine Symposium

    Rob McMillan, EVP Silicon Valley Bank

    Presented 2/11/2020

    Success & Consumer Changes

  • 2

    Oregon Is The Envy of Every Region!

  • Change in Oregon Industry Sentiment: Ebullience!

    3

    -12.5

    48

    10 40

    -23 -17

    2

    -3

    -32

    13

    -50

    0

    50

    100

    150

    200

    Ne t S

    en ti

    m en

    t I nd

    ex

    2015 2016 *2017 2018 2019

    Source: 2020 SVB State of the Wine Industry Survey

    Overall Industry

    Sentiment

  • Origin $ $ CYA $ % Chg

    YA 9L EQ 9L EQ CYA 9L EQ % Chg YA

    DOMESTIC 10,638,323,208 69,990,043 0.7 119,123,670 -2,748,337 -2.3 IMPORTED 3,826,915,144 7,880,107 0.2 39,527,114 -808,870 -2.0 CALIFORNIA 9,579,368,020 61,409,984 0.6 110,526,363 -2,612,746 -2.3 WASHINGTON 608,937,551 -14,836,957 -2.4 5,038,221 -174,550 -3.3 OREGON 219,134,411 24,091,075 12.4 1,114,914 121,110 12.2 ITALY 1,213,754,152 18,509,681 1.5 10,407,186 -112,246 -1.1 AUSTRALIA 717,867,363 -15,208,046 -2.1 11,730,989 -326,820 -2.7 NEW ZEALAND 507,401,792 38,619,451 8.2 3,635,764 258,289 7.6 FRANCE 485,741,469 12,401,969 2.6 2,921,598 -75,274 -2.5 ARGENTINA 323,728,442 -21,833,939 -6.3 3,510,600 -294,756 -7.7 CHILE 254,015,872 -4,423,065 -1.7 3,842,281 -2,201 -0.1 SPAIN 158,766,744 -9,992,295 -5.9 1,987,319 -110,564 -5.3

    Off-Premise Sales By Origin: In Rare Company! 52 Weeks as of 12-28-2019

    Source: Nielsen 12-28-2019

    Cases - VolumeDollars-Value

    TOC

    Edit Data Selections

    Table of Contents

    Market : All Outlets • BA_SUBCATEGORY(C) : TABLE • Product Share Basis : TABLE

    Report Name : Report ID : RB01 Source : Nielsen Answers Data Context : MFG BevAl Suite Wine Run Date : 10/11/18 3:58:13 PM PDT

    Copyright © 2018 The Nielsen Company

    ReportMeta

    Edit Data Selections

    https://answers.nielsen.com/portal/site/answers/menuitem.0d4f8dc7a5fb276424fd3c70685072a0/?job_id=A936ABD5BCA94D67A03212F676372C75&open_selector=true

    Market : All Outlets • BA_SUBCATEGORY(C) : TABLE • Product Share Basis : TABLE

    Report1

    Origin $ $ CYA $ % Chg YA 9L EQ 9L EQ CYA 9L EQ % Chg YA

    DOMESTIC 10,638,323,208 69,990,043 0.7 119,123,670 -2,748,337 -2.3

    IMPORTED 3,826,915,144 7,880,107 0.2 39,527,114 -808,870 -2.0

    CALIFORNIA 9,579,368,020 61,409,984 0.6 110,526,363 -2,612,746 -2.3

    WASHINGTON 608,937,551 -14,836,957 -2.4 5,038,221 -174,550 -3.3

    OREGON 219,134,411 24,091,075 12.4 1,114,914 121,110 12.2

    ITALY 1,213,754,152 18,509,681 1.5 10,407,186 -112,246 -1.1

    AUSTRALIA 717,867,363 -15,208,046 -2.1 11,730,989 -326,820 -2.7

    NEW ZEALAND 507,401,792 38,619,451 8.2 3,635,764 258,289 7.6

    FRANCE 485,741,469 12,401,969 2.6 2,921,598 -75,274 -2.5

    ARGENTINA 323,728,442 -21,833,939 -6.3 3,510,600 -294,756 -7.7

    CHILE 254,015,872 -4,423,065 -1.7 3,842,281 -2,201 -0.1

    SPAIN 158,766,744 -9,992,295 -5.9 1,987,319 -110,564 -5.3

  • Predicted 2019 Year-End Sales Growth: Oregon

    5 Source: SVB State of the Wine Industry Survey

    10%

    13% 11%

    10%

    14%

    9% 11% 10% 10%

    13%

    0%

    2%

    4%

    6%

    8%

    10%

    12%

    14%

    16%

    2015 2016 *2017 2018 2019

    Change in $ Sales Change in Case Sales

  • 3.60%

    9.20% 13.20%

    6.60%

    35.73%

    0.00%

    5.00%

    10.00%

    15.00%

    20.00%

    25.00%

    30.00%

    35.00%

    40.00%

    Oregon: 2019 Direct to Consumer Stats Eye-Popping Results!

    Source: Wines & Vines, Savos 2020 Report

  • Average BritishColumbia Napa County New York Oregon Sonoma County Virginia Washington

    2015 1237 1644 2507 527 1288 1096 789 2016 1297 1369 2776 587 1099 1644 656 2017 1114 1159 1497 2051 716 1039 2075 618 2018 1160 1261 1453 712 1004 1482 808 2019 1520 1815 1372 2729 1079 1098 1464 942

    0

    500

    1000

    1500

    2000

    2500

    3000 2015 2016 2017 2018 2019

    Average Monthly Visitors To the Tasting Room Oregon Taking from California?

    7

    *Only three years worth of information for British Columbia. *2017 New York did not have a significant number of responses to calculate average in 2018

    Silicon Valley Bank and Wine Business Monthly 2019 Insights to Successful Consumer Wines Sales Survey

  • Trended Oregon Off-Premise Sales Growth by Value ($) 52 Weeks through December 2019

    $5,000,000

    $10,000,000

    $15,000,000

    $20,000,000

    $25,000,000

    $30,000,000

    3/ 28

    /1 5

    6/ 28

    /1 5

    9/ 28

    /1 5

    12 /2

    8/ 15

    3/ 28

    /1 6

    6/ 28

    /1 6

    9/ 28

    /1 6

    12 /2

    8/ 16

    3/ 28

    /1 7

    6/ 28

    /1 7

    9/ 28

    /1 7

    12 /2

    8/ 17

    3/ 28

    /1 8

    6/ 28

    /1 8

    9/ 28

    /1 8

    12 /2

    8/ 18

    3/ 28

    /1 9

    6/ 28

    /1 9

    9/ 28

    /1 9

    12 /2

    8/ 19

    Still Showing Handsome Annual Growth

    Source: Nielsen

  • Great Results Today But Oregon is part of the Wine Industry

    … and

    the Industry is Hitting a Ceiling

  • Total US Table Wine Consumption Flat at Best Consumer Change Driving Trends

    300

    400

    500

    600

    700

    800

    900 M

    ill io

    ns o

    f G al

    lo ns

    Source: California Wine Institute, Gomberg-Fredrikson

  • What Consumers Is Oregon Attracting? Oregon is Attracting the Same Age Consumers as Other Regions

    11

    1.3%

    16.9%

    34.6%

    41.3%

    6.0%

    0%

    5%

    10%

    15%

    20%

    25%

    30%

    35%

    40%

    45%

    50%

    Gen Z (21-22) Millennials (23 - 38) Gen X (39 - 54) Boomers (55 - 73) Mature (74+)

    2014 2015 2016 *2017 2018 2019

    Source: SVB Winery Conditions Survey, 2019

    This is a Problem

  • 155,000,000

    156,000,000

    157,000,000

    158,000,000

    159,000,000

    160,000,000

    161,000,000

    162,000,000

    163,000,000

    164,000,000

    165,000,000

    $12,000,000,000

    $12,500,000,000

    $13,000,000,000

    $13,500,000,000

    $14,000,000,000

    $14,500,000,000

    $15,000,000,000

    Dollars Cases

    Total US Off-Premise Wine Sales Trends 2014 - Present Volume Turned Negative 2017. Value has flattened. Some Channel Shifting

    Dollars

    Cases

  • Co py

    rig ht

    © 2

    01 7

    Th e

    N ie

    lse n

    Co m

    pa ny

    . C on

    fid en

    tia l a

    nd p

    ro pr

    ie ta

    ry . 16.7%

    16.6%

    17.1%

    17.5% 17.7%

    2015 2016 2017 2018 52 we 9/28/2019

    Private Label Wine Growing Strongly Plays to Frugal Consumers Pocket Books

    Source: Nielsen Retail Measurement Services, 2015, 2016, 2017, 2018 and 52 weeks ended 3/30/2019

  • Who is the Wine Consumer?

  • Exclusive Beer 18% People/7% $

    Exclusive Spirits 6% People/2% $ Vol

    Wine & Beer 19% People/17% $

    Wine & Spirits 7% people/7% $

    Beer & Spirits 8% people/9% $

    Exclusive Wine 15% People/4% $

    Sixty-One Percent of Alc. Bev. Consumers Regularly Drink From Two Categories Only 15% of Drinkers Are Exclusive to Wine. Competition is from Spirits & Beer

    Source: Nielsen Homescan Panel, Total US: 52 weeks ending 06/29/19 Wine includes Still & Sparkling; Beer includes FMB and Ciders

    Wine Beer Spirits

    Wine/Beer/Spirits 27% People/55% $

    Wine Beer

    Spirits

  • 0

    1,000,000

    2,000,000

    3,000,000

    4,000,000

    5,000,000

    6,000,000

    18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100

    Male Female

    MatureBoomerGen XMillennial

    Ge n

    Z

    Population is Hitting Key Points in Maturity The New Consumer Opportunity is Younger

    Source: U.S. Census Bureau

    N um

    be r o

    f P eo

    pl e

  • Category Sales Growth. Spirits Are Winning the Battle (& Spiked Seltzer) Spirits Are Better at Marketing versus Wine

    Source: Nielsen Syndicated Bev Al Databases 52 weeks ending 11-2-2019

    2.8

    1.3 1.7

    2.1

    5.8

    2.6

    BEER WINE SPIRITS

    Wine is 2X more expensive than Beer or Spirits per serving

  • 0

    50

    100

    150

    200

    250

    $-

    $2,000.0

    $4,000.0

    $6,000.0

    $8,000.0

    $10,000.0

    $12,000.0

    $14,000.0

    $16,000.0

    4 Yr Ago 3 Yr Ago 2 Yr Ago 1 Yr Ago Lat. 52 weeks

    N um

    be r o

    f B ra

    nd s

    M ill

    io ns

    o f D

    ol la

    rs Dollar Sales Number of Brands