Wines & Vines

November 2012 Equipment, Supplies & Services Issue

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Company Name End for the additional fruit this year and still cover their other expenses." Highlights • For the past five years Wines & Vines has polled winery and vineyard suppliers around harvest time to gauge the health of the wine industry. • This year, responses were among the most positive ever. Suppliers reported that their businesses and those of their clients were faring better than in 2011—and more than 85% said they expect the wine industry to continue growing. • Many respondents plan to raise prices for goods and services in the next 12 months, but they also expect their customers to see growth during the same period. 12 to 24 months her wine club software firm has received more new business from wineries in the eastern United States than the West Coast. Champ said that rap- idly expanding wine regions from New York to Virginia prompted the swell in business, with the majority of her clients producing 20,000-50,000 cases per year. Paying the bills In terms of their clients' ability to find cash or financing to pay for goods and services, more than 90% of wine industry suppliers said the situation was as good or bet- ter than last year. Twenty-two percent of survey respondents in 2011 said financing opportunities were "getting worse;" this year that number dropped to 10.1%. Even more notably, while 13% of re- spondents to the 2011 survey said clients' ability to finance goods or services was improving, this year that number jumped to 32%. Steve Rosenblatt of Sonoma Cast Stone told Wines & Vines, "Equipment finance has never been easier." However, the ability to obtain financ- ing and the speed of payment can be two different things. According to one wine bottle supplier, "We had to really ride the customers on payments. They took longer and wanted special terms and prices." Several wine industry suppliers indi- cated they don't know where their clients are obtaining cash or financing, just that they pay their bills on time. "I don't think wineries are out trying to borrow a lot of cash," one barrel-storage executive said. "It will be interesting to see them pay WINES & VINES NOVEMBER 2012 51 Price adjustment After years of holding prices steady (59% of wine industry suppliers said prices would remain unchanged in 2011, and even more answered the same way in 2009 and 2010), nearly 50% of this year's survey respondents said they plan to raise prices during the next 12 months. Several suppliers mentioned that costs to wine industry customers are subject to shipping charges. One cork company, for SUPPLIER SURVEY 2012 SUPPLIER GUIDE example, noted that it's paying 30% more for container shipping to China compared to this time last year. And the fluctuat- ing cost of stainless steel means that tank prices are subject to change. A representative from an Oakland, Calif.-based label design and printing com- pany stated that materials costs haven't in- creased since the spring, allowing the firm to keep prices steady. An Ontario-based packaging firm, meanwhile, said the cost of paper for packaging products such as boxes threatens to raise the price of such items more than 3%.

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