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CO VER S T OR Y Suppliers Rate Industry Health Winery and vineyard vendors say sector is stable or improving By Kate Lavin rootstock, harvesting equipment, yeast, bottling supplies and shipping compa- nies are just a few. In fact, hundreds if not thousands of vendors have an im- pact on each and every bottle (or box) of wine that reaches a consumer. For this reason, wine industry vendors have a unique perspective about the health of our industry. This fall, for the fourth consecutive B year, Wines & Vines polled vendors that offer products and services to wineries and vineyards to get their take on the eco- nomic climate and how the wine industry is doing. Holding steady This September we asked wine industry suppliers to describe the financial health of their wine industry clients. Nearly half (48%) of respondents said their clients' businesses are stable, while 33% de- scribed their clients' financial situations as "getting better," and 19% said they were "getting worse." Like most respondents to our survey, Buzz Boyanich, owner of Napa, Calif.- based beverage equipment company Key Industrial, described sales in the wine sec- tor as flat. "When times get tight, wine is a luxury item for the consumer, whereas when times are tight, people eat more ice cream," said Boyanich, who conducts about 25% of his business in the wine industry and also works with the dairy sector. "The dairy industry suffered some, but not as drastic as we've seen in the wine trade." Boyanich added that clients who sell natural and organic products seem to be an exception in the otherwise static mar- ketplace. "People are getting much more health conscious. Anything attributed to 28 Wines & Vines nOVeMBeR 2011 y the time a consumer pours the first glass from a just-opened bottle of wine, hundreds of deci- sions have contributed to its developmentâchoices about A look at the year ahead Based on your orders and knowledge of the wine industry, what do you expect the industry to do in the next 12 months? 2%Expand rapidly 59% 2010 response 2011 response 2009 response 2008 response Expand slowly 31% 8% 0 Retreat slowly 10% 20% 30% organic or pure or certified is doing quite well. I've seen a lot of the manufactur- ing people experiencing growth in that market," he said. Beth Zarnick-Duffy, a State College, Pa.-based sales manager for automa- tion equipment supplier Emmeti USA, said that since the economy has taken a downturn, a lot of her wine industry clients have responded by looking for ways to become more efficient, whether it be through saving energy or investing in products that streamline workload. Zarnick-Duffy said that energy-efficient equipment is becoming commonplace in Europe, and she is encouraging clients to adopt green practices now rather than wait for them to become standard in the United States. A look in the mirror In terms of ranking their own businesses, wine industry vendors on the whole were more optimistic. In 2009 52% of survey respondents said that their companies had seen growth in the previous 12 months. This year that figure was up to nearly 73%. 40% 50% 60% 70% More than 48% of survey respondents said that during the past 12 months their companies "grew slowly," and nearly a quarter of respondents said their business "grew rapidly." Glen Caster, the Southern California- based sales manager for Swash Cleaning and Sanitization Equipment (a division of ARS Enterprises), said that in the past 12 months his sales finally returned to the high levels of 2008. He told Wines & Vines that when the economy started going south, his wine industry clients seemed to get scared, even though there weren't any particularly negative economic indica- tors within the wine industry. Winery customers started "backing off on buy- ing capital equipment" that year, said Caster, who added that many opted instead for "waiting to see what was going to happen." "In times of concern, when capital budgets are being watched carefully, (wineries) said, 'I'd like to change, but I'm going to wait.' And we saw a lot of that," Caster said. Remain unchanged