Wineries: Industry Opportunities

Wineries are important to the Ashtabula County economy, especially the tourism sector. We have 21 wineries located in the county. More are expected in the future. What are some of the industry opportunities for wineries. Here are some opportunities identified by First Research, a national industry research company:

Export Growth – Industry associations and individual wineries show commitment to expanding exports through advertising and promotion abroad. The Wine Institute, for example, has set a goal of reaching $2 billion in California wine exports by 2020. Many wines from California have a strong international reputation and compare favorably with French wines at blind taste tests. The annual export value of all US-made wines increased about 85% from 2009 to 2014.

Internet Sales – Wine e-commerce and other direct-to-consumer sales are growing quickly. Small wineries can potentially reach a much wider audience for their wines through the Internet. State laws have so far prevented most such sales, but consumer pressure is likely to increase the number of states (including California and New York) that allow Internet wine sales.

A New Generation of Wine Buyers – Millennials, the newest generation of consumers reaching legal drinking age, are a significant market for the wine industry. Often defined as the generation born between 1977 and 1994, millennials make up about 30% of wine drinkers in the US, making them the industry’s second-largest demographic after baby boomers, according to the Wine Market Council. While they tend to buy mostly lower-priced wines, millennials are high-volume drinkers — they account for nearly 35% of US wine consumption by volume, a slightly smaller share than the baby boomer cohort. They are also more likely to try new products and drink a wider variety of beverages compared to other age groups.

Healthful Wine Effects – A number of medical studies in recent years have demonstrated healthful effects of drinking wines, especially red wines. Although the exact mechanism is not yet clear, wines may help prevent cardiac disease. Such effects may encourage consumers to switch to wine from other alcoholic drinks.

Consumption Patterns – US wine consumption per capita is still relatively small compared to that in other countries, suggesting room for growth. Annual wine consumption per person is less than three gallons in the US, much lower than in many European countries, according to the Wine Institute. Croatia, France, Portugal, and Switzerland, for example, each consume more than 10 gallons of wine per capita. Interest from younger generations is expected to fuel future growth in US wine consumption.

Sparkling Wines – Sparkling wine is the fastest-growing category in the US wine industry, as producers introduce more low-cost products to appeal to consumers seeking affordable luxury. US sales of champagne and other sparkling wine increased about 25% from 2009 to 2014, according to Mintel. Italian prosecco and Spanish cava are gaining ground on French champagne, but domestic sparkling wines still own the largest share of the American sparkling wine market. Although low prices have played a large role in driving the segment’s growth, producers are steadily raising prices in response to growing demand.

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