Former Executive Vice President of the Silicon Valley Bank (SVB) Wine Division, Rob McMillan, tried answering that question this weekend on his personal blog. He said if the SVB Wine Division is not reinstated in the next few weeks, the Direct-to-Consumer (DTC) benchmarking information can’t be produced this year. His other immediate concern is the future of the Peer Group Analysis (PGA) database, a comprehensive system of financial and operational data on a number of wineries that wine industry professionals, investors, and analysts use to gain insights into the performance of individual wineries.
There is also the State of the US Wine Industry Report that Rob says usually doesn’t start to be developed until October. This report is a primary source of insights and analysis on the American wine industry. The 100-page report covers sales and marketing trends in the wine industry, consumer behavior and demographics, production, grape prices, and global market conditions. It also includes insights from industry experts and predictions for the industry’s future. The State of the US Wine Industry Report was first published in 2002 and has become of great interest to the American and international wine industry.
How did the Silicon Valley Bank become such a vital source of information and analysis on the wine industry?
Access to Data – Since the bank provided financial services to a significant part of the wine industry, it had access to a lot of financial and operational data. The SVB Wine Division also conducts an annual survey of wineries and vineyards to gather insights into the industry’s current state. The response rate on the Wine Conditions Survey varies yearly but often includes around 600 of the 11,000 wineries in the United States today. Participating wineries receive the overall results back.
Available Reports – SVB’s Wine Division produces several annual reports, including the annual State of the US Wine Industry report and the Direct-to-Consumer Wine Sales Report, which provides “free” insights into the direct-to-consumer (DTC) channel for wine sales. This report was created to address the growing trend of wineries selling directly to consumers through tasting rooms, wine clubs, and online media. This easily available report includes data on sales volumes, pricing trends, and consumer behavior. It examines the challenges and opportunities of this relatively new business model.
Strong Leadership – The SVB Wine Division was led by Rob McMillan, one of the industry’s leading wine business analysts who had been with Silicon Valley Bank for over 25 years. He was the Executive Vice President and founder of the Wine Division, established in 1994 to provide financial services to wineries and vineyards in northern California. Although Rob was the primary author and analyst for the reports, he had support from a team of experienced survey researchers and marketing analysts.
Silicon Valley Bank Wine Division has been recognized as a respected source of free information and analysis on the wine industry, and its reports are widely used. As ownership and leadership change in the next few weeks, we can anticipate more information on the status of these essential reports. Rob reminds us that SVB was generous by providing us with these reports free of charge. He shares that there are significant costs to producing these reports, including the logistics to analyze, write, format, and design them.
