Issue link: http://winesandvines.uberflip.com/i/210765
practicalwinerylibrary.com Access Practical Winery & Vineyard article archives online. TECHNICAL RESOURCE FOR GROWERS & WINERIES 64 Oregon Wineries: Best & Worst business decisions By David Furer w i n e B U S INE S S What wine industry leaders think is important for the future 2013 Wi n e I n d u s t ry CEO S u rv e y BY Robert Smiley, director of wine studies, dean and professor of management emeritus, Brian Syrett, graduate research assistant, University of California Davis Graduate School of Management, Davis, Calif. espite long-term concerns about climate change and regulatory pressures, California wine industry leaders are once again quite bullish about the wine business, according to a new CEO survey conducted by the University of California, Davis. Findings from the survey of wine executives were presented Sept. 24, during the Wine Industry Financial Symposium at the Napa Valley Marriot in Napa, Calif. "The wine industry, by and large, has weathered the worst of the economic downturn of this decade," says Robert Smiley, professor and dean emeritus of the UC Davis Graduate School of Management. "The CEOs who participated in this survey expressed confidence in the future of traditional brands and optimism for the expanding global market. To varying degrees, they are interested in exploring new products to meet the demands of the millennial generation and increasing their use of social media in their marketing strategies." Smiley has surveyed wine executives for each of the past 12 years. The survey examines global and national trends in the wine industry. It complements other wine research and teaching at UC Davis, home for more than 100 years to the most comprehensive university wine program in the United States. D Survey of wine executives Smiley collected opinions and projections from the heads of 22 leading wineries, three distributors, two brokers and one grapegrower. Now that the economy is rebounding, brand and quality are having more impact than price on consumer purchases, respondents report. Even during the more difficult economic years, many consumers who were accustomed to more expensive, higher-quality brands continued to purchase those wines; they simply bought less of them. 58 p r acti c al w i ne ry & v i ne yard DECEMBER 20 13 As the economy recovers, consumers will continue to make luxury wine purchases, but those will be well-reasoned, rather than "frivolous luxury" purchases, one executive predicts. Asked how firms are vying for the attention of the millennial generation, in light of competition from craft beers and craft cocktails, the executives offered mixed responses. Some report that they or their competitors are developing new products by adding flavors, carbonation or even spirits to regular wine. "It is a great opportunity to experiment with the millennials because they are focused on things like authenticity and some integrity," says one respondent. "They love to discover things." Other respondents are not creating such "pop products," but rather are continuing to innovate in terms of how they source grapes and make wine, with an emphasis on quality. Most respondents voiced keen interest in international market expansion in a variety of regions including Asia, South and Central America, Europe, Canada, Russia and even Africa. Several respondents report that their firms are cautiously eyeing the massive Chinese market, but with significant concerns about its stability. One executive found Japan to be a far stronger market than China, noting that Japanese wine consumers "have been buying Napa Valley wines for a long time and have a preference for those luxury items." In the area of social media, the executives reported that their businesses use a variety of services including Twitter, Facebook, Yelp, Instagram, Pinterest and Trip Advisor. Special online offerings include live tastings and streaming video. They are training employees on the importance of product quality and customer service, especially in an era when