Moss Adams, in partnership with Turrentine Brokerage, American Ag Credit and Heffernan Insurance Brokers, have released the results of their 2017 Wine Industry Benchmarking Survey, a landmark Report that allows industry professionals to compare their business performance against that of their peers.
The study looks at relevant trends and data from wineries and grape growers throughout California, Oregon and Washington. It’s based on 2016 fiscal year data, includes comparisons to 2008 and 2012 data and prognoses for future years. Participants range in size from those producing less than 5,000 cases per year to companies with more than 700,000 in annual case sales volume.
“This is a survey we’ve conducted every four years since 2009,” explains Bill Vyenielo, Moss Adam’s Senior Business Consultant for Wine and Agribusiness. “Much of our industry is family-owned and privately held. We find people know their internal numbers, but often don’t know how their company’s numbers stack up compared with other businesses of like-size and structure. That information is invaluable if you want insights on how to improve your company’s performance.”
“It’s an extremely competitive industry,” notes Steve Fredricks, President of Turrentine Brokerage. “No matter where you’re from, you’re selling to the same distributor and competing with wines from all over the world in that price range.
“It’s difficult to, for instance, increase the price of existing wines if you don’t know what your competitors are spending on things like employee costs, sales and marketing, and discounts … Benchmarking helps you to see what can be done to improve your position going forward.”
Fredericks and Vyenielo emphasize that the survey covers all functional areas of grape growing, wine production and sales. Key findings of the study include data on:
- Premiumization – Since the end of the 2008-2009 recession, consumers have increasingly purchased wine over $10/bottle.
- Direct to Consumer (DTC) – DTC sales continue to grow, but three-tier distribution and wholesale are still the predominant ways to sell wine.
- Real Estate and Grape Supply – The availability of vineyard land is limited, especially in Napa and Sonoma counties, fostering interest in moves to Washington, Oregon and other coastal areas of California.
- Redevelopment of Acres – Acres in Sonoma and Napa counties are being redeveloped with higher value varietal plantings at higher densities.
- Labor Shortage and Mechanization – A growing labor shortage has driven an increase in mechanization.
Moss Adams will be providing a summary of the findings from the report at a Wine Industry Workshop hosted by Excalibur University on December 5th, from 7:30 AM to 1:30 PM at the Exchange Bank Training Center in Santa Rosa, CA. To learn more and register, go to: http://exkaliburuniversity.com/wiw-speakers-q4-2017/.
The 2017 Wine Industry Benchmarking Survey sponsors are:
MOSS ADAMS, providing the world’s most innovative companies with specialized accounting, consulting, and wealth management services.
TURRENTINE BROKERAGE, specializing in the brokerage of wine grapes and wines in bulk from all regions of California and from around the world.
AMERICAN AGCREDIT, founded in 1916 and the sixth largest Farm Credit lending cooperative in the United States with assets in excess of $7.3 billion with more than 18% of that portfolio in wine grapes and wineries.
HEFFERNAN INSURANCE BROKERS, offering tailored risk-management strategies that guide CFOs in identifying how much risk their company should transfer or retain.
Visit www.mossadams.com/winesurvey to purchase a copy of the full report.
