Pietro Buttitta’s Post

Lots of people tried to say the wine business was dying... Looks like were wrong. A new report just came out painting a rosy picture for the future of the business. Here are the highlights and implications for the broader alcohol industry: The report reaffirms something I'd been assuming/predicting for quite some time: People drank like crazy during covid, then cut back once covid subsided (which caused all of the nonsense predictions that alcohol was dying), and are now returning back to pre-pandemic behavior. This means that inventories and sales dropped a bit in the last two years as people re-examined their relationship with alcohol and looked to reset (which is healthy/ a good thing!) But the data is showing that sales are likely to begin increasing. This report provides a comprehensive and detailed survey and analysis on sales, inventories, projections, and sentiment of wineries across the country. The US wine business- the most dynamic in the world - has more than 11,000 wineries across 50 states. Of that 11,000, 71% are forecasting growth in sales this year. 71%(!!) Only 6% are expecting a drop in sales, while the rest expect a flat year. The main expected drivers of the growth are: - Product innovation /M&A - Premiumization - Direct-to-consumer sales Interestingly, the data also shows that on average, 61% of a winery's customers are millenial, GenZ, and GenX. And this is against the backdrop of reports showing younger people are drinking less. Overall, all of this is good news for the wine industry as a whole. I think it's safe to say the bottom is in for the wine business. Sales may normalize and adjust a bit in the coming years, but this report proves something I've said many times: Don't bet against booze!

Check out this A+ article on the challenges of online wine sales and brand building in the industry as a whole. #winelovers #onlinesales #brandbuilding https://lnkd.in/eG_haNVy

What are the trends in wine? There are signs of a return to positive shipment numbers in the U.S. wine market, Gomberg, Fredrikson Report editor Jon Moramarco said in his regular quarterly webinar this week, but positive messaging needs to win hearts and not just palates to the category. “Ideally, by the end of the year retailers [that] have been destocking will have gotten to a point where they can’t reduce inventories anymore,” Moramarco said in his review of wine entering the market, including wholesaler inventory levels. “We will hopefully at least see this start to flatten out if not start to recover a bit in terms of growth.” Cash flow issues mean all levels of the three-tier market have been limiting inventories, and pursuing strategies designed to keep expenses in line with revenues in a shifting market. Wholesalers continue to grapple with carrying costs approximately four times what they were pre-pandemic.  “Carrying costs were running at 4% or 5%,” Moramarco said. “When COVID hit and supply chains were disrupted, distributors were actually short in inventory but they adjusted for that, and now with higher inventory levels they have been seeing about 18% of their operating profit eaten up by carrying costs.” The Fed’s half-point cut to its policy rate on Sept. 18 will see wholesalers recover 1.5% of their operating profit, Moramarco said. “But wholesalers are going to need to see a 2% to 3% drop in interest rates for their carrying costs to come down materially,” he added. “Until then, we see wholesalers are going to continue to try to reduce inventories where they’re long, and they’ll continue to minimize inventories.” This means less product flowing to market from wineries. Slower demand in the market means wineries, especially smaller ones, are placing product under bond, allowing them to avoid paying tax at bottling and instead defer taxes till the wine leaves the warehouse and generates revenue. “With the high interest rates, slowing market, probably tighter cash flow, more are deciding to bottle in bond, and this is distorting the tax-paid numbers,” Moramarco said. The phenomenon is being seen across the country, but it’s especially pronounced in California. Tax-paid shipments from California wineries into California are down 30% in the latest 12 months, Moramarco said, but scan data shows that California sales through food, drug and mass merchandisers is down just 8% versus 4% nationwide. “California is showing some weakness, more so than the rest of the country, but it’s nowhere near 30%, and so the weakness of 8% in key markets doesn’t justify the 30% decline in tax-paid shipments,” he explained. Comparables should be more normal, and even positive this fall and heading into 2025. Valiant glass have bottles in every size and shape. From Green and Clear Claret wine bottles, to the Amber or brilliant Blue wine bottles. mary@vitglassbottle.com whatsapp+8618963053908 #wine #valiantglass #winebottles

In this insightful explanation of the challenges to online wine retailers, Paul Mabray brings up the curtain on the nature of online wine retailing. Paul gets it all right from the information limitations faced by retailers to the structural deficiencies of state alcohol laws that inhibit online wine retailing. But what must also be said is that with just a few structural changes to the alcohol sales laws (allowing producer direct wine purchases by retailers and allowing interstate shipment of alcohol by retailers) would completely revitalize wine retailing and ensure that smaller, independent retailers can better survive in an age where multi-national retailers seek to dominate as well as finally giving consumers REAL access to the diversity of wines available in the U.S. (Well Done, Paul Mabray)

"Wine ended 2023 with one of its worst holiday performances in recent memory, seeing sales drop 8.1% in the final three month.." OUCH. Free Flow customers, on the other hand, were up double digits in 2023 as more restaurants and hotels converted to wine-on-tap. Free Flow is happy to have helped supply premium wines in reusable stainless steel kegs for the past thirteen years. Restaurants and Wineries are improving the quality of wine pours, increasing margins on wine, reducing liquid waste, and reducing carbon emissions with wine-on-tap from stainless steel kegs - a package that is reusable for decades. Reusable packaging is better for the environment and reduces reliance on new packaging supply chains. Kegs provide better taste and less waste. Wine is susceptible to oxygen, light and heat. Wine inside a keg, however, is kept cool, dark and safe from oxygen transfer. #Wineontap #sustainability #reusable #packaging #recycle #ecofriendly #circulareconomy #environmental #sustainable #reuse #refill #freeflowwines #winequality More Bad News: SipSource Report Pulls No Punches - Wine Industry Advisor https://lnkd.in/gbxWXaQB

👀 Are Australian retail giants squeezing winemakers and drinkers more than grapes? 🍇 This week we launched a campaign calling for fairer conditions for Australian winemakers and drinkers with the release of a new Ideal Conditions YouGov Report.⭐ The findings of the report are clear: - 💸 63% of Aussies want to know winemakers are fairly compensated. - ❗ 43% see unclear wine origin information as a red flag. - 🍷 65% would buy more wine from retailers that support independent winemakers. As the Australian government investigates the power of major retailers in the wine industry, we're encouraging Aussie consumers to "vote with their feet" and to raise a glass to the little guys. 🍷 Our 90,000 Angels are making this happen every day & getting Great wine at better prices in return but there are 9 million wine drinkers our there in Australia and over 2000 winemakers! We’re really passionate about this, and I’m also incredibly grateful for the support so far (2GB The Australian News Corp The Daily Telegraph ...) I genuinely believe together, we can make a big difference. So let’s see if we can’t just shake this whole thing up a bit, eh? Wine tastes better with nothing to hide. #NakedWines #IdealConditions #WineYourWay #Australia Naked Wines Australian Grape & Wine Mi3Australia Wine Australia Craig Emerson Julie Collins https://lnkd.in/gYTAHVpj

There's a lot of wine out there. I 100% agree with Mario Zepponi when it comes to the limited options for distributors in the US....five years ago. LibDib, LLC is now available in 15 markets, including the top 5 (CA, NY, FL, IL, TX) in the US. Wineries need to commit to doing the work to sell their wine. Being in the market, tastings, events, meeting Buyers (vs. distributor management and reps) and consumers alike. Selling. Relationship building. We can provide an efficient distribution route to market for everyone. However, there is more work to be done than just posting on a web site or selling a pallet to a traditional distributor. Wine is one of the most crowded CPG categories out there. Convincing a Buyer to bring on your brand is hard work. And there is no better sales person than someone from the winery themselves. Spending time and resources doing that.... hopefully wineries will find success. https://lnkd.in/gsnzY7ra

As the landscape of online wine sales evolves, wineries need to stay ahead of the curve. Here are three key considerations to boost wine sales and ensure your digital presence works effectively for you. WineDirect

It's time for wine media to address the real problem in the wine industry: outdated wholesale distribution laws. While not the most glamorous topic, it's arguably the most important. Here's why: Legislation passed in the 1930s, intended to regulate the post-Prohibition wine industry, has inadvertently allowed wholesale distributors to shape the market in favor of a select few producers. This has created barriers for many other winemakers, particularly smaller and independent producers, limiting their access to consumers and hindering industry diversity. Recent data from the 2024 BMO report reveals that large producers are well aware of these unfair advantages and are openly planning their future strategies around them. This highlights the urgency of addressing these outdated laws. Furthermore, the current system is failing consumers. Due to these restrictive distribution laws, wine consumers are missing out on amazing products from independent producers. The market is artificially limited, depriving consumers of the full offering of amazing wine products. Imagine: - Local wines featured prominently in restaurants - Rotating restaurant wine lists reflecting true diversity - Supermarkets showcasing niche, artisanal, affordable products This vision is possible, if, we bring to light and break down the outdated laws governing our could be vibrant wine industry. California is doing okay. They allow for direct-to-consumer, direct-to-trade, and wholesale (aka the Three Channel System - TCS). However they do not allow producers outside the state to sell direct-to-trade, a clear commerce clause violation. Many states are not like California and have mandated three tiers. This means you have to work with a wholesaler for distribution. Does this not seem just horribly protectionist and wrong? Have a look at the data and the ideas we've shared. I'd love to hear your opinion. #dtc #wineindustry #3tier #TCS #DTT #wine #winebusiness

📉The U.S. wine and spirits market is facing challenges as sales fell by 6.0% in the 12 months leading up to August 2024, according to Wine & Spirits Wholesalers of America’s SipSource data. The decline is notable in both on- and off-premise channels, with premium products hit hardest. Mid-range tiers also experienced pressure. Analysts expect the upcoming holiday season to present further difficulties, with reduced product assortments across retailers. 📊 Read more in The Spirits Business https://lnkd.in/eRgTeb_d #data #trends #wine #spirits #BusinessNews