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Wineries in the US - Industry Market Research Report

United States wineries market: $22.5 billion industry by 2018


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2014-02-14 10:30:04 - Wineries in the US - Industry Market Research Report - a new market research report on companiesandmarkets.com

The United States Wineries market is enjoying a growing base of wine drinkers, particularly among the millennial generation. Rising consumption has increased revenue at a rate of 3.6% per year on average over the past five years.

The industry has not been without its troubles, however; during the economic recession, sales fell and demand shifted to lower-priced wines, causing rapid revenue growth to stall in 2010 and contract 1.4%. Nonetheless, revenue rebounded in 2011 and grew strongly in 2012. Mirroring the improving economy, wine consumption is expected to increases further in 2013, allowing revenue to rise a moderate 3.2% to total $17.3 billion.

Although operating profit increased in 2011 as consumers started to "trade up," profit is expected to decrease in 2013

 

 

as producers struggle to pass along the rising costs of grapes. Lower price points have benefited the larger players that are able to produce in bulk. However, smaller wineries are struggling to cope with consolidation among suppliers, wholesalers and retailers. Despite the consolidation trend, new wineries are still entering the industry. During the five years to 2013, the number of operators is expected to increase at an annualized rate of 3.1% to total 7,217.

Over the next five years, consolidation throughout the supply chain is expected to continue, as producers build relationships with larger wholesalers and strive to meet increasing demand from consumers, particularly for low- to medium-price wines.

Smaller wineries are finding refuge in direct-to-consumer wines. Retail and on-premise (i.e. restaurant and bar) sales fell sharply during the economic recession, so many producers turned to selling via the internet and in tasting rooms. Regulations for direct sales vary by state, though, complicating this distribution method. Pending legislation is likely to increase hurdles in the coming years, which could negatively influence industry profit. In another blow to profit, grape prices are forecast to continue their upward climb. While revenue is projected to rise at an average annual rate of 5.4% to $22.5 billion through 2018, profitability is projected to decline over the period.

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