Insights for Successful Consumer Wine Sales Part I and II Survey - PowerPoint PPT Presentation

WINE BUSINE SS MONTHL Y Insights for Successful Consumer Wine Sales – Part I and II Survey analysis prepared by: Molly Stichter Jerusha Frost Jonathan Williams Rob McMillan

5 Winery and Tasting Room Openings Winery Tasting Room 3,500 3,000 Number of Openings 2,500 2,000 1,500 1,000 500 0 Before 1982 1983-1987 1988-1992 1993-1997 1998-2002 2003-2007 2008-2012 2013-2017 WINE BUSINE SS MONTHL Y Silicon Valley Bank and Wine Business Monthly 2019 Insights to Successful Consumer Wines Sales Survey 2

6 Five Year Trend of Average Retail Bottle Price by Region $100.00 $90.00 $80.00 $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $- Santa British Sierra Rest of Washingt Santa Paso Sonoma Napa New York Virginia Cruz and Oregon Average Columbia Foothills California on Barbara Robles County County Monterey 2015 $19.00 $26.00 $22.80 $25.11 $26.89 $29.79 $35.44 $38.67 $38.44 $34.93 $41.05 $37.58 $63.77 2016 $16.55 $24.82 $25.08 $25.45 $30.35 $32.11 $36.16 $37.04 $37.42 $34.29 $43.00 $39.10 $70.74 2017 $17.66 $23.28 $28.01 $25.65 $30.14 $32.27 $35.21 $35.18 $39.22 $41.44 $46.14 $44.33 $83.80 2018 $17.92 $25.16 $26.52 $29.35 $32.18 $33.74 $36.08 $39.46 $40.93 $44.40 $45.14 $49.77 $94.26 2019 $19.29 $25.86 $27.69 $24.67 $33.94 $34.51 $35.63 $38.81 $37.24 $45.93 $49.48 $49.13 $95.53 *British Columbia, figures are represented in Canadian dollars (CAD). WINE BUSINE SS MONTHL Y Silicon Valley Bank and Wine Business Monthly 2019 Insights to Successful Consumer Wines Sales Survey 3

7 Dependence on DtC by Region (% Revenue from DtC) Virginia 92% Rest of West US 88% Paso Robles 79% Mid-Atlantic & New England 76% Lodi/Clarksburg, CA 73% New York 73% Santa Cruz and Monterey 71% Sierra Foothills 70% Rest of California 69% Washington 66% Sonoma County 65% 2019 Average 65% Santa Barbara 63% Napa County 62% Midwest 62% Oregon 59% British Columbia 51% International 33% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% WINE BUSINE SS MONTHL Y Silicon Valley Bank and Wine Business Monthly 2019 Insights to Successful Consumer Wines Sales Survey 4

8 Average Winery’s Composition of DtC Sales Onsite Events Other, Exports, Sales Channels Other 5% 3% 3% Offsite Events 2% 3% Phone Wine Club Wholesale, 3% 37% 34% DTC, 59% Internet/Web 8% Tasting Room 42% WINE BUSINE SS MONTHL Y Silicon Valley Bank and Wine Business Monthly 2019 Insights to Successful Consumer Wines Sales Survey 5

9 Average Tasting Fee by Region Standard Reserve $70 $64 $60 $50 $43 $40 $40 $32 $30 $30 $24 $22 $21 $21 $18 $18 $17 $17 $20 $16 $16 $16 $15 $15 $13 $12 $12 $12 $11 $11 $10 $9 $8 $8 $7 $7 $7 $10 $5 $- WINE BUSINE SS MONTHL Y Silicon Valley Bank and Wine Business Monthly 2019 Insights to Successful Consumer Wines Sales Survey 6

10 Four Year Trend of Tasting Fees Standard Reserve $50 $45 $38.69 $38.27 $40 $34.33 $35 $29.70 $30 $25 $20.01 $19.82 $20 $16.71 $14.68 $15 $10 $5 $- 2016 2017 2018 2019 WINE BUSINE SS MONTHL Y Silicon Valley Bank and Wine Business Monthly 2019 Insights to Successful Consumer Wines Sales Survey 7

11 Standard Tasting Fee as a Percent of Median Bottle Price Avg Standard Tasting Fee Percent of Bottle Price Linear (Percent of Bottle Price) $70.00 60.0% 56.8% 58.1% $60.00 55.0% 46.1% $50.00 50.6% 50.0% 47.9% $40.00 43.6% $30.00 45.0% 41.4% $20.00 38.2% 39.5% 39.1% 40.0% $10.00 $- 35.0% $13 $17 $25 $35 $45 $56 $66 $76 $86 $96 $114 WINE BUSINE SS MONTHL Y Silicon Valley Bank and Wine Business Monthly 2019 Insights to Successful Consumer Wines Sales Survey 8

12 Proportion of Appointment: Only vs. Public Wineries 2018 2019 Appointment Appointment only only 17% 21% Open to the Open to the public, 56% public 56% Both 23% Both, 27% WINE BUSINE SS MONTHL Y Silicon Valley Bank and Wine Business Monthly 2019 Insights to Successful Consumer Wines Sales Survey 9

13 Tasting Room Style: Casual vs. Formal by Year Half Casual/Half Formal Primarily Casual Tastings Mostly Casual/Some Private Tastings Primarily Private Tastings Mostly Private/Some Casual 5% 8% 3% 2019 11% 2018 12% 15% 1% 2% 73% 69% WINE BUSINE SS MONTHL Y Silicon Valley Bank and Wine Business Monthly 2019 Insights to Successful Consumer Wines Sales Survey 10

14 Average Monthly Visitors per Winery by Region Ontario 4,504 Mid-Atlantic & New England 4,455 New York 2,729 Rest of California 2,694 Midwest 2,611 International 2,208 British Columbia 1,815 Average 1,520 Virginia 1,464 Paso Robles 1,402 Napa County 1,372 Sonoma County 1,098 Oregon 1,079 Lodi/Clarksburg, CA 1,027 Santa Cruz and Monterey 953 Washington 942 Sierra Foothills 800 Santa Barbara 781 Rest of West US 523 Mendocino County 278 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 WINE BUSINE SS MONTHL Y Silicon Valley Bank and Wine Business Monthly 2019 Insights to Successful Consumer Wines Sales Survey 11

15 Trend of Average Monthly Visitors by Region 2015 2016 2017 2018 2019 3000 2500 2000 1500 1000 500 0 British Sonoma Average Napa County New York Oregon Virginia Washington Columbia County 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 *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 WINE BUSINE SS MONTHL Y Silicon Valley Bank and Wine Business Monthly 2019 Insights to Successful Consumer Wines Sales Survey 12

16 Average Tasting Room Wine Purchase Napa County $315.77 Sonoma County $194.55 2019 Average $142.69 Paso Robles $109.18 Santa Barbara $101.41 International $88.98 Oregon $85.83 Washington $76.28 Mendocino County $74.29 Sierra Foothills $73.71 Rest of California $73.27 Rest of West US $67.23 Santa Cruz and Monterey $65.28 British Columbia $64.46 Livermore, Lodi, & Delta, CA $64.45 Virginia $56.50 Mid-Atlantic & New England $48.37 New York $47.19 Midwest $42.48 $- $50.00 $100.00 $150.00 $200.00 $250.00 $300.00 $350.00 WINE BUSINE SS MONTHL Y Silicon Valley Bank and Wine Business Monthly 2019 Insights to Successful Consumer Wines Sales Survey 13

17 Trend of Average Tasting Room Wine Purchases $450.00 $400.00 $350.00 $300.00 $250.00 $200.00 $150.00 $100.00 $50.00 $- Santa British Washingt Sierra Santa Paso Sonoma Napa New York Virginia Cruz and Oregon Average Columbia on Foothills Barbara Robles County County Monterey 2015 $45.20 $47.90 $65.19 $46.50 $69.53 $86.25 $69.06 $91.18 $72.92 $119.43 $99.18 $213.87 2016 $37.59 $59.27 $60.51 $44.93 $61.89 $60.56 $69.87 $77.52 $82.04 $121.16 $102.26 $246.37 2017 $32.88 $51.64 $68.05 $54.48 $69.04 $74.15 $74.83 $77.80 $84.36 $140.40 $119.63 $301.78 2018 $48.25 $51.69 $55.49 $61.25 $67.93 $74.97 $75.25 $94.90 $96.68 $151.02 $159.96 $388.98 2019 $47.19 $56.50 $65.28 $64.46 $76.28 $73.71 $101.41 $85.83 $109.18 $194.55 $142.69 $315.77 British Columbia, figures are represented in Canadian dollars (CAD). WINE BUSINE SS MONTHL Y Silicon Valley Bank and Wine Business Monthly 2019 Insights to Successful Consumer Wines Sales Survey 14

18 Wine Club Member Growth Rate* and Attrition Rate** Wine Club Member Growth Rate* Wine Club Attrition Rate** Rest of West US 31% Rest of West US 57% Mendocino County 24% British Columbia 52% Santa Barbara 24% Midwest 49% Midwest 23% Mid-Atlantic & New England 48% Rest of California 22% Oregon 46% Mid-Atlantic & New England 22% Rest of California 44% Napa County 22% 2019 Average 42% Sonoma County 22% Santa Barbara 41% Paso Robles 21% Sonoma County 39% 2019 Average 20% Washington 36% Oregon 20% Santa Cruz and Monterey 34% Santa Cruz and Monterey 20% Lodi/Clarksburg, CA 33% Lodi/Clarksburg, CA 20% Virginia 32% Virginia 19% Napa County 27% British Columbia 16% Paso Robles 24% International 16% Mendocino County 14% Washington 15% 0% 20% 40% 0% 10% 20% 30% 40% 50% 60% *New Wine Club Member Growth Rate = New wine club members acquired in 2018, divided by starting number of wine club members in 2018. **Attrition Rate = Number of wine club members lost during 2018, divided by Number of wine club members at the beginning of 2018 WINE BUSINE SS MONTHL Y 15 Silicon Valley Bank and Wine Business Monthly 2019 Insights to Successful Consumer Wines Sales Survey

19 Net Wine Club Member Growth Rate* Midwest 32% New York 29% British Columbia 29% Rest of West US 26% Washington 21% Santa Barbara 19% Oregon 19% Sonoma County 17% 2019 Average 15% Santa Cruz and Monterey 14% Mid-Atlantic & New England 13% Virginia 13% Sierra Foothills 13% Rest of California 9% Napa County 7% Paso Robles 4% 0% 5% 10% 15% 20% 25% 30% 35% * Net Wine Club Growth Rate = New club members acquired in 2018, less lost club members in 2018, divided by base membership level at the beginning of 2018. WINE BUSINE SS MONTHL Y Silicon Valley Bank and Wine Business Monthly 2019 Insights to Successful Consumer Wines Sales Survey 16