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34 WINES&VINES November 2015 2015 SUPPLIER SURVEY R ecently, as Chinese stock indexes crashed and trading fluctuated widely in U.S. markets, Wines & Vines conducted its eighth annual survey of wine industry suppliers. Despite the shaky economic indicators from Shanghai to Wall Street, providers of supplies and services to the wine industry reported healthy growth and forecast an even brighter time to come. More than 80% of respon- dents to our survey of suppliers to wineries and vineyards agreed that the wine industry continued its upward trajectory this year, with nearly one-third of all re- spondents saying the industry "grew rapidly" during the past 12 months. Jean-Pierre "J-P" Giovanni, vice president and general man- ager at SGP Packaging-Verallia, said the most growth has come from the premium wine segment, prompting a number of acquisi- tions by large beverage compa- nies looking to cash in on the growing market for wines priced $20 per bottle and up. To illustrate his point, Giovanni cited E. & J. Gallo Win- ery's purchase of J Vineyards & Winery, a 150,000-case producer known for its sparkling wines, from founder Judy Jordan. "J was a boutique winery that was doing OK in terms of growth on an annual basis. Now, being owned by Gallo, it will probably be pushed to the Gallo distribu- tion network, which is one of the largest in the world," Giovanni told Wines & Vines. The expo- sure will "push it to new distribu- tion channels that J on its own was unable to reach before." Giovanni also noted that some existing wineries are work- ing to move their brands from the value or mid-level category into the premium price range, a shift he said would require an overhaul in packaging, branding and marketing. HEALTH OF WINE INDUSTRY CLIENTS More than 55% of respondents to Wines & Vines' 2015 supplier sur- vey noted that their winery and vineyard clients are more finan- cially healthy than in years past. Trygve Mikkelsen, president of Western Square Industries in Stockton, Calif., said during the past 12 months he's seen a lot of wineries purchasing new equip- ment in response to the earth- quake that hit south of Napa, Calif., on Aug. 24, 2014. Western Square produces barrel racks, farm gates, harvest bins, trailers and warehouse ladders. "The earthquake a year ago led to wineries not only upgrad- ing but taking safety seriously and discussing old solutions ver- sus new solutions," Mikkelsen said. But the news hasn't been all bad. "There is lots of optimism in the marketplace," he added. Sara Nelson, owner of Sara Nelson Designs of Kennewick, Wash., said many of the individu- als currently opening wineries in Washington state have made money in medicine, real estate and other sectors before deciding to enter the wine industry. "They're doing this now because it's a passion," she said. "We're Supplier Opinions in Line With Bullish Economy Wine industry vendors predict prosperous year ahead By Kate Lavin WINE INDUSTRY PERFORMANCE How would you describe the performance of the wine industry during the past year? FINANCIAL HEALTH OF WINE INDUSTRY CLIENTS What is your impression of the financial health of your wine industry clients? 80% 70% 60% 50% 40% 30% 20% 10% 0 Grew Rapidly Grew Slowly Remained Unchanged Declined Slowly Declined Rapidly 80% 70% 60% 50% 40% 30% 20% 10% 0 Getting Better Staying the Same Getting Worse 2012 2013 2014 2015 2012 2013 2014 2015 2012 2013 2014 2015 2012 2013 2014 2015 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015