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November 2017 WINES&VINES 21 WINE INDUSTRY NEWS N apa, Calif.—More than 300 executives and other wine industry profession- als attended the 26 th annual Wine Industry Financial Symposium in late September at the Napa Valley Marriott. The event made its debut under the new management of Wine Communications Group, which also owns Wines & Vines and Wine Business Monthly. One session focused on the 2017 Financial Benchmarking Sur- vey conducted by Moss Adams. Senior business consultant William Vyenielo presented parts of the study, which analyzed 2,106 re- sults from 80 wineries (not all Moss Adams clients) to help winery and vineyard management com- pare their operations with peers. Among the findings were that 61% of wineries hope to raise wine prices, which has proven dif- ficult in practice, while 46% in- tend to increase wine volume. One-third of growers hope to raise grape prices and volumes, and the same number are looking to increase mechanization. Almost two-thirds of wineries intend to increase their sales bud- gets, and almost as many their marketing budgets. A quarter want to buy a vineyard. The entire study is available to participants, and others can buy it for $495. Vyenielo said the ac- counting firm welcomes additional participants in future studies. This year, Ray Johnson, execu- tive director of the Wine Business Institute at Sonoma State Univer- sity, and Dr. Liz Thach, MW, dis- tinguished professor of wine and a professor of management at SSU, took over from long-time presenter Dr. Robert Smiley from the University of California, Davis, to present The Wine Industry Fi- nancial Symposium's Annual Ex- ecutive Survey, which will be summarized in an upcoming story. After two years of record deals, mergers and acquisitions activity, this year has been fairly light. Matt Franklin, partner at Zepponi & Co., said: "There have been no deals over $100 million this year. Last year there were six of them." He also pointed out that there aren't many mergers in the wine business, just acquisitions. Franklin counted $820 million in deals in 2015 and $2.4 billion in 2016. The last time the industry saw such high activity was in 2007, with $1.5 billion and $600 million in 2008, just as the recession hit. The total rose to $510 million in 2011 but was only $280 million in 2014 and $250 million so far this year. Many of the deals involved geographic expansion, mid-size players (smaller than E. & J. Gallo Winery, Constellation Brands and the Wine Group) building scale and premiumization. The biggest deal, Gallo's acquisi- tion of Stagecoach Vineyard, joins recent trends of wineries adding vineyards to ensure grape supply. The Stagecoach deal eventually will affect the 100 wineries that have been buying its premium grapes. Most speakers mentioned problems with labor availability, and most wineries and growers are looking to mechanization as a partial solution. Most agree that today's me- chanical harvesting is equal to or even better than hand-picking, and automatic sorting on a har- vester or in the cellar can surpass hand-sorting and save significant labor costs. Likewise, pre-pruning and leaf pulling are proving popular. Steve Tamburelli, CEO of Napa-based producer Clos du Val, said that the possibility of mechanical harvest- ing is part of the winery's new planting regimen, even though they aren't yet using mechanized harvesters. In another session, Russell Miller, associate with RBC Capital Markets, predicted "lower for lon- ger" growth for the U.S. economy. The consensus, he said, is that na- tion isn't looking at a recession or boom, but slow and steady growth for the foreseeable future. —Paul Franson SSU: Wineries Plan to Raise Prices and Wine Production