Issue link: http://winesandvines.uberflip.com/i/62516
CO VER S T OR Y Predicting the future For the fourth year Wines & Vines asked winery and vineyard suppliers what they expect the wine industry to do during the next 12 months. Nearly 59% of suppliers indicated that they expect slow growth in the industry, and more than 31% of suppliers expect no change in the sector. Caster, who also is partner at High- lands, a virtual winery based in Napa Valley, is part of the majority that ex- Financial health of wine clients How would you describe the financial health of your wine industry clients? Getting worse 19% Staying the same 48% Getting better 33% 9% 26% 59% 1%Decrease <3% 4% Decrease >3% 0 pects a gradual increase in wine indus- try earnings. "All indicators suggest that wine con- sumption is going to grow," he said. "I don't expect there to be any kind of break in the curve where it's going to zoom up or zoom down." 10% 20% 30% rapidly or slowly) is down 13% from 2010 figures. According to one Califor- nia-based barrel warehousing specialist, "There will be success stories, but much fewer and farther between. Our idea of success, too, has changed with lowering of expectations." How did your company fare this year? How would you describe the performance of your company during the past 12 months? Grew rapidly 24% Grew slowly Remained unchanged 8% 18% Retreated slowly 1% Retreated rapidly 0 10% 20% 30% 40% 50% 2010 response 2011 response 2009 response 49% 40% 50% 60% 70% 80% 2010, but more than 22% of respondents said the availability of financing was "get- ting worse," a noticeable difference from 2010, when just 11% of respondents answered the same way. One Northern California designer and branding specialist said he'd responded to the financial crunch by asking for half-payment up front and half on delivery. "I make this clear up front, and I have not been burned so far," he said. Boyanich, who is a small business owner himself with 16 employees at Key Industrial, said, "The banking and finan- cial institutions have turned the screws on lending. "There is less money to spend, less cash flow," he said. "The tightening up of loans and lines of credit plays a role in the limited growth that we see in the wine industry. I'm just waiting for the turn- around to begin." Anticipating costs For wineries and vineyards that can shore up cash reserves or credit to pay for goods and services, what should they expect Wines & Vines nOVeMBeR 2011 29 "Some of it is style, fad, whatever you want to call it. The U.S. overtook France in total consumption, so that's pretty interesting," Caster said, referring to a report released earlier this year by Gomberg, Fredrikson & Associates. Direct-to-consumer fulfillment firms indicated that legislation to open new channels of DtC sales could spur the wine economy. The total number of respondents that expect the industry to expand (be it Meanwhile a Sonoma County wine equipment owner said, "The other states are coming up to par, so California should get with it and lower some prices." Obtaining credit Respondents to Wines & Vines' survey were asked about the availability of cash or financing to vineyards and wineries. Nearly 65% of those surveyed reported that the availability of credit for wine in- dustry businesses is the same as it was in How might prices for your products/services change? During the next 12 months, how does your company expect to change the prices of its products/services? Increase >3% Increase <3% Remain unchanged 2010 response 2011 response 2009 response