silicon valley bank 2015 state of the wine industry presentation
TRANSCRIPT
![Page 1: Silicon Valley Bank 2015 State of the Wine Industry Presentation](https://reader034.vdocuments.mx/reader034/viewer/2022051400/55a508421a28ab047b8b4731/html5/thumbnails/1.jpg)
Survey Results and Economic Slides
2015 Silicon Valley Bank State of the Wine Industry
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2015 Annual Wine Conditions Survey 26 January 2015 2
Table of Contents Summary 3
Survey Respondent Profile 4
Demographics 9
2015 Price Projections 13
2014 Sales and Case Growth 18
Sales Channel Distribution 24
2014 Fiscal Year Review 29
Financial Health 33
Potential Sales 37
2014 Harvest 43
2015 Grape Expectations 47
California Drought Issues 51
Wholesale Representation 54
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2015 Annual Wine Conditions Survey 26 January 2015 3
Summary
• 82% of wineries reported overall financial health of "good" or better for 2014. This is up 7% over the previous year. This trend is expected to continue as the grapes from three strong harvests (2012,2013, and 2014) make their way into the market.
• Consensus view of 2014 shows 79% of respondents reporting having a good year or better. The Sierra Foothills, CA region reported the largest proportion of disappointment which correlates directly to issues felt during the California drought. Over 41% of respondents from that region reported feeling some issues from the drought.
• 60% of all wineries are projecting price increases per retail bottle with only 6% projecting a decrease in 2015. The majority of increases are expected to be small across all price points except the >$69 range. Wines with a price point >$69 are the most bullish with 45% reporting increases of moderate to strong.
• Wine sales continue to be dominated by the Baby Boomer generation contributing to 44% of all sales with Gen-X’erscoming in at 29%. Three year trends indicate little change amongst the generational buyers in the market today.
• Overall, 93% of wineries reported the quality of grapes harvested as good/excellent for 2014. Wineries in the Pacific Northwest further benefited from the 2014 harvest with 62% of Washington wineries and 85% of Oregon wineries reporting higher yields than average. The next closest region was Napa, CA with 43% of wineries reporting higher than average yields.
• Only 36% of California wineries reported a measurable affect from the 2014 California drought with the most significant issues being felt in the Central Valley, CA, Central Coast, CA, and Sierra Foothill, CA regions.
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2015 Annual Wine Conditions Survey 26 January 2015 4
Survey Respondent Profile
• The number of winery responses totaled 582. If there were too few respondents from a participating region, the data was deemed insignificant based on the sample size and placed into “Other” categories or combined with a neighboring region as defined below.
- Lodi & Other Delta Counties, CA includes (Livermore and Contra Costa, CA)
- Central Coast, CA includes (San Luis Obispo/Paso Robles/Santa Barbara)
- Mid-Coastal, CA includes (Santa Cruz/Monterey,/Santa Clara)
- Central Valley, CA includes (Solano, CA)
- Other includes (Alabama, Arizona, British Columbia, California, Connecticut, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Mexico, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Ontario, Pennsylvania, Peru, South Dakota, Tennessee, Texas, Vermont, and Virginia)
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2015 Annual Wine Conditions Survey 26 January 2015 5
Production Level of Survey Participants
32.5%
18.9%
13.6%
14.4%
7.0%
4.6%
5.3%
3.6%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%
1 - 2,500
2,501 - 5,000
5,001 - 10,000
10,001 - 25,000
25,001 - 50,000
50,001 - 100,000
100,001 - 250,000
>250,000
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 6
7%
15%
27%
19%
21%
11%< $15
$15 - $19
$20 - $29
$30 - $39
$40 - $69
> $69
Retail Price Points of Participants
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 7
16%
25%
24%
10%
7%
18%< 5 Years
5-9 Years
10 – 14 Years
15 – 19 Years20-25 Years
25+ Years
Operating Years of Experience of Survey Participants
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 8
21.1%
18.0%
14.9%13.2%
8.9%7.7%
5.2%2.7% 2.2% 2.1% 2.1% 1.7%
0%
5%
10%
15%
20%
25%
Region of Survey Participants
Source: Silicon Valley Bank Wine Conditions Survey
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Demographics
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2015 Annual Wine Conditions Survey 26 January 2015 10
14%
29%44%
13%
Millennial (21-36 year olds)
Gen X (37-48 year olds)
Boomers (49-66 year olds)
Matures (67+)
Average Sales by Demographic
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 11
Year Over Year Demographic Sales Trends
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Millennial (21-36 year olds) Gen X (37-48 year olds) Boomers (49-66 year olds) Matures (67+)
2012 2013 2014
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 12
Average % of Direct Sales by Age Group Compared to Bottle Price
0%
10%
20%
30%
40%
50%
60%
< $15 $15 - $19 $20 - $29 $30 - $39 $40 - $69 > $69
Millennial (21-36 year olds)
Gen X (37-48 year olds)
Boomers (49-66 year olds)
Matures (67+)
Source: Silicon Valley Bank Wine Conditions Survey
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Increases/Decreases to Retail Bottle Price
2015 Price Projections
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2015 Annual Wine Conditions Survey 26 January 2015 14
2015 Retail Bottle Price Projections
1% 1%4%
34%
44%
14%
2%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Strong Decrease ModerateDecrease
Small Decrease Hold Prices Small Increase ModerateIncrease
Strong Increase
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 15
3 Year Bottle Price Projection Trends
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Strong Decrease ModerateDecrease
Small Decrease Hold Prices Small Increase ModerateIncrease
Strong Increase
2012 2013 2014
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 16
2015 Retail Price Projections by Price Point
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
< $15 $15 - $19 $20 - $29 $30 - $39 $40 - $69 > $69
Strong Decrease
Moderate Decrease
Small Decrease
Hold Prices
Small Increase
Moderate Increase
Strong Increase
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 17
Price Projections: 5 Year Comparison
0%
10%
20%
30%
40%
50%
60%
70%
2010 2011 2012 2013 2014
Decrease Prices Increase Prices
Source: Silicon Valley Bank Wine Conditions Survey
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*Case growth refers to increase/decrease of cases sold over previous year
2014 Sales and case growth*
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2015 Annual Wine Conditions Survey 26 January 2015 19
Predicted End of Year Sales Growth vs. SVB Actual Sales Growth
2011 2012 2013 2014Predicted End of Year Sales Growth 13.70% 14.90% 13.00% 13.08%SVB Actual Sales Growth 12.20% 7.70% 9.20% 10.00%
0%
2%
4%
6%
8%
10%
12%
14%
16%Sa
les
Gro
wth
SVB forecasted
6-10% growth in
2014
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 20
2014 Predicted Sales Growth by Years in Business
22%
15%
13%
8%
7%
9%
0%
5%
10%
15%
20%
25%
< 5 Years 5-9 Years 10 – 14 Years 15 – 19 Years 20-25 Years 25+ Years
Years In Business
Wine Sales Growth
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 21
Indicates regions where price increases could be taken
2014 Predicted Sales and Case Growth by Region
0%
5%
10%
15%
20%
25%
Wine Case Growth Wine Sales Growth
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 22
2014 Predicted Sales and Case Growth by Price Point
0%
2%
4%
6%
8%
10%
12%
14%
16%
< $15 $15 - $19 $20 - $29 $30 - $39 $40 - $69 > $69
Wine Case Growth Wine Sales Growth
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 23
2014 Predicted Sales and Case Growth by Production
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
1 - 2,500 2,501 - 5,000 5,001 -10,000
10,001 -25,000
25,001 -50,000
50,001 -100,000
100,001 -250,000
>250,000 Overall
Wine Case Growth Wine Sales Growth
Source: Silicon Valley Bank Wine Conditions Survey
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Tasting Room, Wine Club, Wholesale, Export, Other
Sales channel distribution
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2015 Annual Wine Conditions Survey 26 January 2015 25
2014 Average Sales per Distribution Channel
31%
22%
38%
3%6%
Tasting Room
Wine Club
Wholesale
Export
Other
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 26
Average Direct Sales per Channel by Production
1 - 2,500 2,501 -5,000
5,001 -10,000
10,001 -25,000
25,001 -50,000
50,001 -100,000
100,001 -250,000 >250,000
Other 9% 3% 6% 4% 8% 2% 5% 7%Wine Club 26% 26% 25% 21% 19% 10% 10% 6%Tasting Room 39% 37% 33% 24% 17% 11% 11% 6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Source: Silicon Valley Bank Wine Conditions Survey
SP17
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Slide 26
SP17 indicate what x axis represents?Sona Pai, 1/7/2015
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2015 Annual Wine Conditions Survey 26 January 2015 27
Average Wholesale/Export Sales per Channel by Production
1 - 2,500 2,501 - 5,000 5,001 -10,000
10,001 -25,000
25,001 -50,000
50,001 -100,000
100,001 -250,000 >250,000
Export 2% 2% 3% 4% 4% 9% 4% 6%Wholesale 24% 32% 33% 47% 51% 68% 71% 75%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 28
% of Sales from Restaurants
15%
23%
30% 31%
36%40%
31%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
< $15 $15 - $19 $20 - $29 $30 - $39 $40 - $69 > $69 Overall
Source: Silicon Valley Bank Wine Conditions Survey
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Overview of 2014
2014 Fiscal Year Review
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2015 Annual Wine Conditions Survey 26 January 2015 30
Yearly Success in 2014
7%
14%
79%
A disappointing year
A year of treading water
A good year
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 31
Regional Detailed Overview of 2014
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100% The most difficult year inour historyOne of our mostchallenging years everA disappointing year
A year of treading water
A good year
One of our better years
The best year in ourhistory
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 32
-1.2%
5.3%
15.9%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
A disappointing year A year of treading water A good year
Average Growth of Wine Sales Based on 2014 Success
Source: Silicon Valley Bank Wine Conditions Survey
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Wineries view of the overall financial condition of the business
Fiscal health
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2015 Annual Wine Conditions Survey 26 January 2015 34
Financial Health: Year Over Year Comparison
Rock Solid Very Strong Strong Good Slightly Weak Very Weak On LifeSupport Dead
2013 9.7% 17.8% 23.5% 24.8% 17.6% 5.3% 1.4% 0.0%2014 12.0% 21.1% 24.1% 25.1% 13.3% 2.6% 1.4% 0.3%
0%
5%
10%
15%
20%
25%
30%
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 35
2014 Financial Health by Region
0%10%20%30%40%50%60%70%80%90%
100%
Poor/WeakGood/StrongSource: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 36
Financial Health by Price Point
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
< $15 $15 - $19 $20 - $29 $30 - $39 $40 - $69 > $69
Poor/Weak
Good/Strong
Source: Silicon Valley Bank Wine Conditions Survey
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Potential Sale of winery in the next 5 years along with Succession Planning (passing control to children of owners)
Potential sale
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2015 Annual Wine Conditions Survey 26 January 2015 38
Potential Sale of Winery In the Next 5 Years
8%3%
26%
38%
25%A strong consideration
Will hopefully happen
Possible
Very unlikely
Not going to happen
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 39
Potential Sale of Winery in the Next 5 Years*
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
It is being discussed Not Sure Probably will not happen
*original data consolidated into 3 categories Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 40
Potential Sale Based on Financial Health*
10%
24%
66%
Good/Strong
It is being discussed
Not Sure
Probably will nothappen
17%
37%
46%
Poor/Weak
It is being discussed
Not Sure
Probably will nothappen
*original data consolidated into 3 categories
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 41
0% 5% 10% 15% 20% 25% 30%
There is a plan in place
We are discussing the possibility seriously
A hope, but we really don't know
Only a remote possibility
No chance
Succession Planning (Children to Take Over Operations)
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 42
Succession Planning by Region
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
No chance
Only a remote possibility
A hope, but we really don't know
We are discussing the possibility seriously
There is a plan in place
Source: Silicon Valley Bank Wine Conditions Survey
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Quality and Yield summary from the grape harvest
2014 harvest
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2015 Annual Wine Conditions Survey 26 January 2015 44
Quality of 2014 Grape Harvest
61%
32%
5%
2%
Excellent
Good
Average
Below Average
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 45
Quality of 2014 Grape Harvest by Region
0%10%20%30%40%50%60%70%80%90%
100%
Below Average
Average
Good
Excellent
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 46
Yield of 2014 Grape Harvest
0%10%20%30%40%50%60%70%80%90%
100%
Low Yields
Ave Yields
High Yields
Source: Silicon Valley Bank Wine Conditions Survey
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Purchase and Price expectations for next year’s harvest
2015 Grape expectations
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2015 Annual Wine Conditions Survey 26 January 2015 48
Grape Purchase Expectations In 2015
20%
50%
30% Less Tonnage
Equal Tonnage
More Tonnage
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 49
Grape Purchase Expectations by Region
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
More Tonnage
Equal Tonnage
Less Tonnage
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 50
2015 Price per Ton Expectations
0%10%20%30%40%50%60%70%80%90%
100%
Lower Price/Ton
Equal Price/Ton
Higher Price/Ton
Source: Silicon Valley Bank Wine Conditions Survey
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Current effects felt from the drought
California drought issues
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2015 Annual Wine Conditions Survey 26 January 2015 52
Issues from California Drought
16%
47%
33%
4%
No Issues at All
Negligible Issues
Some Issues
Significant Issues
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 53
0%
10%
20%
30%
40%
50%
60%
70%
SignificantIssuesSome Issues
Source: Silicon Valley Bank Wine Conditions Survey
Issues From California Drought by Region
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Finding Wholesale and Overall Satisfaction with Representation
Wholesale Representation
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2015 Annual Wine Conditions Survey 26 January 2015 55
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%We do not try to useWholesale
Not a Problem
Some Effort
Difficult/Impossible
Source: Silicon Valley Bank Wine Conditions Survey
Obtaining Wholesale Representation by Region
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2015 Annual Wine Conditions Survey 26 January 2015 56
60%
30.3%
37.32%
14%
36.7%
21.87%26%
33.0%
40.82%
0%
10%
20%
30%
40%
50%
60%
70%
2012 2013 2014
Satisfied Ambivalent Disappointed
Satisfaction with Wholesale Representation (YoY)Adjusted to remove all wineries < 2,500 case production
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 57
< $15 $15 - $19 $20 - $29 $30 - $39 $40 - $69 > $69Satisfied 45% 28% 30% 35% 28% 49%Ambivalent 29% 26% 23% 19% 27% 21%Disappointed 26% 46% 48% 46% 45% 30%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Satisfaction with Wholesale Representation (By Price Point)Adjusted to remove all wineries < 2,500 case production
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 58
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Satisfied
Ambivalent
Disappointed
Satisfaction with Wholesale Representation (By Region)Adjusted to remove all wineries < 2,500 case production
Source: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 59
Financial performance of premium wineries
Source: Silicon Valley Bank Peer Group DatabaseSource: Silicon Valley Bank Wine Conditions Survey
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Economic Graphs
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2015 Annual Wine Conditions Survey 26 January 2015 61
U.S. dollar index
72
74
76
78
80
82
84
86
88
90
92
DXY Curncy PX_LOW
DXY Curncy PX_last
DXY Curncy PX_HIGH
Source: Bloomberg, Silicon Valley Bank
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2015 Annual Wine Conditions Survey 26 January 2015 62
U.S. GDP
2.5
-1.5
2.9
0.8
4.6
2.3
1.6
2.5
0.1
2.7
1.8
4.5
3.5
-2.1
4.6
3.9
-3
-2
-1
0
1
2
3
4
5
3/1/11 9/1/11 3/1/12 9/1/12 3/1/13 9/1/13 3/1/14 9/1/14
Source: Bloomberg, Silicon Valley Bank
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2015 Annual Wine Conditions Survey 26 January 2015 63
ICE Brent Crude Oil
0
20
40
60
80
100
120
140
1/3/14 2/3/14 3/3/14 4/3/14 5/3/14 6/3/14 7/3/14 8/3/14 9/3/14 10/3/14 11/3/14 12/3/14
ICE Brent Generic
Source: Bloomberg, Silicon Valley Bank
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2015 Annual Wine Conditions Survey 26 January 2015 64
10 year treasury rates
0
0.5
1
1.5
2
2.5
3
3.5
Date 12/23/13 2/3/14 3/17/14 4/28/14 6/9/14 7/21/14 9/1/14 10/13/14 11/24/14
Rat
e %
Source: Bloomberg, Silicon Valley Bank
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2015 Annual Wine Conditions Survey 26 January 2015 65
Diffusion indexes of employment change
0
10
20
30
40
50
60
70
80
90
1/1/
918/
1/91
3/1/
9210
/1/9
25/
1/93
12/1
/93
7/1/
942/
1/95
9/1/
954/
1/96
11/1
/96
6/1/
971/
1/98
8/1/
983/
1/99
10/1
/99
5/1/
0012
/1/0
07/
1/01
2/1/
029/
1/02
4/1/
0311
/1/0
36/
1/04
1/1/
058/
1/05
3/1/
0610
/1/0
65/
1/07
12/1
/07
7/1/
082/
1/09
9/1/
094/
1/10
11/1
/10
6/1/
111/
1/12
8/1/
123/
1/13
10/1
/13
5/1/
14
EMDINP1M Index Manufacturing Payrolls
EMDINP1M Index Total Private
Source: Bloomberg, Silicon Valley Bank
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2015 Annual Wine Conditions Survey 26 January 2015 66
Workforce in 2015
4.9
14.8
17.8 17.7 16.8 16.5 17.1 17.716.1
10.9
5.4
2.31.2 0.40
2
4
6
8
10
12
14
16
18
20
16-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80+Millennials Generation X Boomers Silent Generation
Siz
e in
mill
ions
Projected size of U.S. labor force (in millions) by age
Source: Department of Labor
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2015 Annual Wine Conditions Survey 26 January 2015 67
Unemployed persons per job opening
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14
Source: Bloomberg, Silicon Valley Bank
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2015 Annual Wine Conditions Survey 26 January 2015 68
Job openings and employment
126,000
128,000
130,000
132,000
134,000
136,000
138,000
140,000
2000
2500
3000
3500
4000
4500
5000
5500
Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14
Job Openings
Employment
Source: Bloomberg, Silicon Valley Bank
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2015 Annual Wine Conditions Survey 26 January 2015 69
Total private job openings, hires, openings and quits
0
1,000
2,000
3,000
4,000
5,000
6,000
1/1/
045/
1/04
9/1/
041/
1/05
5/1/
059/
1/05
1/1/
065/
1/06
9/1/
061/
1/07
5/1/
079/
1/07
1/1/
085/
1/08
9/1/
081/
1/09
5/1/
099/
1/09
1/1/
105/
1/10
9/1/
101/
1/11
5/1/
119/
1/11
1/1/
125/
1/12
9/1/
121/
1/13
5/1/
139/
1/13
1/1/
145/
1/14
9/1/
14
Hires
Openings
Quits
Total private job openings, hires and quits (seasonally adjusted, in thousands)
Source: Bloomberg, Silicon Valley Bank
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2015 Annual Wine Conditions Survey 26 January 2015 70
Hires, total separations and employment
128,000
130,000
132,000
134,000
136,000
138,000
140,000
3000
3500
4000
4500
5000
5500
6000
Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14
Employment
Hires
Total Separations
Source: Bloomberg, Silicon Valley Bank
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2015 Annual Wine Conditions Survey 26 January 2015 71
Quits, layoffs and discharges
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14
Layoffs and discharges
Quits
Source: Bloomberg, Silicon Valley Bank
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2015 Annual Wine Conditions Survey 26 January 2015 72
Quits per layoff and discharge
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
12/1/04 12/1/05 12/1/06 12/1/07 12/1/08 12/1/09 12/1/10 12/1/11 12/1/12 12/1/13
Source: Bloomberg, Silicon Valley Bank
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2015 Annual Wine Conditions Survey 26 January 2015 73
Economic confidence
-40
-35
-30
-25
-20
-15
-10
-5
0
5
10
Jan-
12
Feb-
12
Mar
-12
Apr
-12
May
-12
Jun-
12
Jul-1
2
Aug
-12
Sep
-12
Oct
-12
Nov
-12
Dec
-12
Jan-
13
Feb-
13
Mar
-13
Apr
-13
May
-13
Jun-
13
Jul-1
3
Aug
-13
Sep
-13
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb-
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-1
4
Aug
-14
Sep
-14
Oct
-14
Nov
-14
Upper-income Americans ($90K+ in annual household income)
Middle- and lower-income Americans (less than $90k in annual household income)
Source: Bloomberg, Silicon Valley Bank
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2015 Annual Wine Conditions Survey 26 January 2015 74
U.S. Unemployment rate
5.6
5.8
6
6.2
6.4
6.6
6.8
7
7.2
5.6
5.8
6
6.2
6.4
6.6
6.8
7
7.2
11/1/13 12/1/13 1/1/14 2/1/14 3/1/14 4/1/14 5/1/14 6/1/14 7/1/14 8/1/14 9/1/14 10/1/14 11/1/14 12/1/14
Source: Bureau of Labor Statistics
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2015 Annual Wine Conditions Survey 26 January 2015 75
Gas Prices – 9 Month Average Retail
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
1/7/07 1/7/08 1/7/09 1/7/10 1/7/11 1/7/12 1/7/13 1/7/14
PX_LAST
Regular gas price ($USD/gallon)
Source: Bloomberg, Silicon Valley Bank
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2015 Annual Wine Conditions Survey 26 January 2015 76
Daily oil production
Millions of barrels per day
Source: Bloomberg, Silicon Valley Bank
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2015 Annual Wine Conditions Survey 26 January 2015 77
Potential fine wine consumer by age
Source: U.S. Census Bureau, Silicon Valley Bank
Percentage of families in group
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2015 Annual Wine Conditions Survey 26 January 2015 78
Trends in export volumes 2008-2013
Source: L’Organisation Internationale de la Vigne et du Vin
Six-year span (2008-2013)
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2015 Annual Wine Conditions Survey 26 January 2015 79
Worldwide production vs. consumption
Source: L’Organisation Internationale de la Vigne et du Vin
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2015 Annual Wine Conditions Survey 26 January 2015 80
Global consumption trends
Source: L’Organisation Internationale de la Vigne et du Vin
2000-2013
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2015 Annual Wine Conditions Survey 26 January 2015 81
Bulk wine available by region
Source: Turrentine Brokerage
Millions of gallons
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2015 Annual Wine Conditions Survey 26 January 2015 82
Supply and demand 2013 vs. 2014
Source: Turrentine Brokerage
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2015 Annual Wine Conditions Survey 26 January 2015 83
Financial performance of premium wineries
Source: Silicon Valley Bank Peer Group DatabaseSource: Silicon Valley Bank Wine Conditions Survey
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2015 Annual Wine Conditions Survey 26 January 2015 84
About Silicon Valley Bank Wine Division
Silicon Valley Bank is the premier commercial bank for emerging, growth and mature companies in the technology, life science, venture capital, private equity and premium wine industries. Its Wine Division specializes in commercial banking for premium wineries and vineyards and the industries that support them. SVB has the largest team of commercial bankers dedicated to the wine industry of any bank nationwide. Founded in 1994, SVB’s Wine Division has offices in Napa and Sonoma counties and serves clients in the fine wine producing regions of California, Oregon and Washington. By virtue of its dedication to the wine industry, Silicon Valley Bank is able to support its clients consistently through economic and growth cycles, and offer guidance on many aspects of their business, beyond traditional banking services. Silicon Valley Bank is a member of global financial services firm SVB Financial Group (Nasdaq: SIVB), with SVB Analytics, SVB Capital and SVB Private Bank. More information on the company can be found at www.svb.com/winedivision
Silicon Valley Bank is the California bank subsidiary and the commercial banking operation of SVB Financial Group. Banking services are provided by Silicon Valley Bank, a member of the FDIC and the Federal Reserve System. SVB Private Bank is a division of Silicon Valley Bank. SVB Financial Group is also a member of the Federal Reserve System.
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2015 Annual Wine Conditions Survey 26 January 2015 85
Disclaimer
This material, including without limitation to the statistical information herein, is provided for informational purposes only. The material is based in part on information from third-party sources that we believe to be reliable, but which have not been independently verified by us and for this reason we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decision. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as asolicitation, offer or recommendation to acquire or dispose of any investment or to engage in any other transaction. Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors, as well as supply anddemand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources. Opinions expressed are our opinions as of the date of this content only. The material is based upon information which we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such.
©2014 SVB Financial Group. All rights reserved. Silicon Valley Bank is a member of FDIC and Federal Reserve System. SVB>, SVB>Find a way, SVB Financial Group, and Silicon Valley Bank are registered trademarks. B_WD-14-13290 Rev. 01-15-15.