Silicon Valley Bank 2017 State of the Industry Report.

You can access the wine industry report from SVB Here

Takeaways: (Aristo Business Model Insights) 

Summary: 

Core takeaway for the report is that everyone is looking for value at every price point. The traditional economic channels, there are very outdated channels that are able to deliver this value. Thus, we are excited to challenge the status quo with an innovative, sustainable, and value driven model for the wine business. Our global approach also hedges against consolidating singular domestic markets. 

    • Farm labor supply and costs are the dominant concerns in the wine business in 2017. Our business model allows us to avoid pit falls and challenges of labor. While it does affect us, we are less directly affected. 
    • Wines sold between $12 and $25 will grow in demand as will high-end luxury wines with an established brand. We expect to see small price increases in these segments, with volume and price drops for bottles priced under $9. Spiking input prices we have factored for in to our process. We continue sourcing from large, medium, and small producers and growers. We have the ability to adjust for shifting markets, creating a more sustainable model. 
    • Per capita consumption faces crosscurrents with retiring wine-loyal baby boomers being replaced by less affluent millennials who are ambivalent about their alcoholic beverage of choice. If economic conditions continue to improve, however, per capita consumption should be slightly higher in 2017.Our business model allows us strategically to target various different groups. 
    • Premium wine sales will increase between 10 and 14 percent above 2016 levels. This is the core target of Aristo, to focus a direct to consumer innovative model. Avoiding traditional three tier channels. 
    • Even with winery M&A facing headwinds from higher interest rates, winery acquisitions should remain quite active through 2017. This directly has something to do with aging population in current winery ownership, but also a consolidation to enhance economies of scale. Our model is predicated in a sustainable growth method; it allows us to scale at need and acquire in the right climate. 
    • Growth and Sales needs to happen with Technology. One of the key aspects of Aristo, has a culture of capitalizing on innovative  and lean practices, along with the silicon valley mantra of utilizing tech for operations and marketplace.