Wine Industry Analysis

Good Essays
Topics: Wine
The US winery industry had a growth rate of 4.7% between 2006 and 2011, and is expected to grow by a rate of 4.9% over the next five years [ (IBISWorld) ]. In California alone an average of 175 wineries have opened every year since 2000 [ (Richard Green) ]. The states of New York and Virginia have been major players in the US wine industry. The data shows that the demand for wine has been increasing at an exponential rate over the past 5 years. Average annual revenue for the wine industry is expected to be estimated at $20.2 billion through 2016 [ (IBISWorld) ]. The growth of the wine industry, particularly over the past 10 years, can be attributed to a few key drivers in the market. Per capita consumption of alcohol has increased consistently and is expected to grow. Wine and spirits in particular have surpassed beer, due to the growing trend in the US towards living a healthy lifestyle. Beer contains high levels of carbohydrates, which explains the drop in popularity in the market. The recent trend in the diet and food industry has revolved around cutting carbohydrates out of the diet. Wine and spirits in small amounts has been proven to actually improve the health of the consumer. The price of grapes over the past five years has dropped making it more attractive for winemakers to increase their supply and stimulate new entrants into the market. As of recently the price of grapes has been on the rise, which is expected to cut into the profits of wineries. The price of grapes is determined by how successful the harvest is, which weather and pests can affect. Typically, the winery will have a contract for a set price on the grapes in order to help stabilize the price, thus preventing unexpected swings in cost. The demand from beer, wine and liquor stores has been on the rise. These stores account for a high percentage of the wine sold in the US. The demand from bars and clubs has also been on the rise. The consumer sentiment index has increased, meaning


Cited: IBISWorld. 2011. 18 February 2012 <http://teach.belmont.edu:2470/industryus/default.aspx?indid=289>. Mariani, John. "Cheeky Monkey, Colorado Wineries Emerge to Battle California." 27 June 2011. Bloomberg. 18 February 2012 <http://www.bloomberg.com/news/print/2011-06-27/cheeky-monkey-colorado-wineries-emerge-to-battle-california-john-mariani.html>. Richard Green, Dale Heien, Richard Howitt, and Richard James Volpe. "Wine-grape production trends reflect evolving consumer demand over 30 years. ." California Agriculture (2010): 42. Schoenfeld, Bruce. "The New Watering Hole." Entrepreneur December 2010: 89-92. Tincknell & Tincknell, Inc. marketingwine.com. 2012. 18 February 2012 <http://www.marketingwine.com/rackings/rackings-3_tier_overview.htm>.

You May Also Find These Documents Helpful

  • Powerful Essays

    Wine Industry

    • 4543 Words
    • 19 Pages

    Executive Summary The United States wine industry is a 12 billion dollar industry and is composed of 7,000 wineries and around 1,800 different companies. The three major companies within the industry are Constellation brands, E&J Gallo, and The Wine Group Inc. The industry has made its way through the economic crisis at a better rate than some of the other U.S industries however in order for them to continue to see any type of growth it is important that they acknowledge their issues and find…

    • 4543 Words
    • 19 Pages
    Powerful Essays
  • Good Essays

    Wine Industry

    • 2949 Words
    • 12 Pages

    [pic] Wine & Spirits Industry Analysis Team 6 SMBA 04 • Strategic Marketing MKT 606 • November 22, 2008 Hayden Olson, Natanyi Carter, Maurice Campbell, Natasha Mohl, Tameika Dozier, Majed Soboh, Allan Topher [pic] Table of Contents Executive Summary 3 External & Internal Environment 4 External Environment 4 Technological Trends 4 Consumer Trends 5 Governmental Trends 5 Economic Trends 6 Opportunities 6 Threats 7 Internal Environment 7 Strengths 7 Weaknesses…

    • 2949 Words
    • 12 Pages
    Good Essays
  • Best Essays

    Wine Industry

    • 2607 Words
    • 11 Pages

    Contents Executive Summary Introduction Reason for going oversea and entering British Market Strategy analysis 3.1 Innovation of Banrock Station in Great Britain 3.2 Standardization of Bordeaux in Great Britain Recommendation References Table List Graph 1: The Product Lifecycle of Banrock Station in 2007 Graph 2: The Object, Strategy and Tactic of Bordeaux wine External environment Increase sale cost leadership marketing…

    • 2607 Words
    • 11 Pages
    Best Essays
  • Powerful Essays

    Wine Industry

    • 7525 Words
    • 31 Pages

    STRATEGIC MANAGEMENT DR.YUSUF SIDANI INDUSTRY ANALYSIS WINE INDUSTRY IN LEBANON PRESENTED BY NADINE BARAKAT YASMINE ASHOUR MOHAMMAD EL BEITAM MOHAMMAD SALTAJI ALI KHALIFEH NOVEMBER 24TH, 2005 Executive summary The following project goes deep to explain the current situation of the Lebanese wine industry. It begins by giving a brief introduction about the current economic situation in the country. Then it gives a detailed explanation the industry economic situation and of the rival…

    • 7525 Words
    • 31 Pages
    Powerful Essays
  • Good Essays

    PESTLE analysis on wine industry Constellation Brands, E&J Gallo Winery, and Wine Group are amongst the three top producers of Wine in the United States. The success of the three organization have been acquired from the recent acquisitions, as well as, their capability of changing with the consumers needs the three major issues which the wine industry is currently being faced with entail upholds the standards of advertising, the corporate buyouts threat as well as, the increasing wine market. Industry…

    • 1102 Words
    • 5 Pages
    Good Essays
  • Satisfactory Essays

    WINE PESTLE ANALYSIS Political • The wine industry in the United States continues to face political challenges as it tries to extricate itself from arcane laws left over from the prohibition era. Although some states have abolished laws prohibiting the sale of beer, wine and spirits on Sundays and have opened the door to Internet sales of wine, many other states are not as progressive. The hot political debate in 2010 revolved around the privatization of alcoholic beverage sales. Every state has…

    • 436 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    The wine industry of Chile is perhaps one of the most interesting case studies with regard to developing countries in the world. First, it is particularly interesting because prior to 1980, Chilean wine was thought to be of a much lower quality than many of the world's best wines. However, companies used investors and technology to make the Chilean wine trade one of the most prosperous in the world. Chile has always had a suitable climate for the production of high quality wine. However, the lack…

    • 282 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Nz Wine Industry Analysis

    • 14188 Words
    • 57 Pages

    FOR ITS EXCEPTIONAL WINES OUR MISSION TO CREATE VALUE FOR OUR MEMBERS OUR PURPOSE 1. TO PROTECT THE COMPETITIVE POSITION OF WINE FROM NEW ZEALAND 2. TO SUPPORT THE PROFITABLE GROWTH OF WINE FROM NEW ZEALAND OUR ACTIVITIES ADVOCACY RESEARCH SUSTAINABILITY MARKETING CONTENTS 2 6 8 10 CHAIR’S REPORT ADVOCACY 18 18 19 STATISTICS Summary: New Zealand Wine Wineries and Grape Growers New Zealand Producing Vineyard Area New Zealand Vintages New Zealand Wine Exports By Market…

    • 14188 Words
    • 57 Pages
    Powerful Essays
  • Powerful Essays

    China, India & Wine | May 19 2011 | Assessing the global environment and developing solutions for Australian international managers: a WebQuest. (5461 words) | Sheena Bobeechun Troy Credlin Sarah Duff Audrey James. | Table of Contents Executive Summary 3 PESTL Analysis 4 Political & Legal Factors (Author - Sarah Duff) 4 Economic Factors (Author - Sheena Bobeechun) 5 Social & Cultural Factors (Author - Audrey James) 7 Technological Factors (Author - Troy…

    • 7515 Words
    • 31 Pages
    Powerful Essays
  • Good Essays

    HW#1 A Macro-Environmental Analysis of the Wine Industry in Turkey A factor that influence a company's or product's development but that is outside of the company's control is known as macro environment. In this paper, all dimensions that affect that wine industry in Turkey are investigated. It is important to observe the wine industry in terms of political, economic, socio-cultural, technological and natural aspects; it is called as PESTEL analysis. This analysis which provides the deeper look…

    • 618 Words
    • 3 Pages
    Good Essays