Silicon Valley Bank’s annual wine survey predicts growth sales of mid-priced wines

Wines priced between $12 and $25 a bottle will grow in volume in 2017, while those costing less than $9 should decline, according to an industry survey to be released today.

The Silicon Valley Bank’s annual State of the Wine Industry Report showed a continued emphasis on premium wines targeted to more affluent consumers.

The report, in its 16th year, is highly regarded among vintners for its insight. Top wine officials answer written questions from the bank anonymously, in an effort to paint a more candid picture of what they expect in the upcoming year.

“We foresee a strong year ahead for the wine industry, particularly in the premium wine segment, with small price increases in the $12-25 bottle and luxury wine categories,” said Rob McMillan, founder of Silicon Valley Bank’s wine division and author of the report, in a statement.

The survey found sales growth of between 10 to 14 percent is predicted for the premium wine segment in 2017 as a result of an improved retail environment, strong consumer demand and good supply.

The report notes the industry still faces shortages of high-quality pinot noir and cabernet sauvignon, which are the most expensive varietals in Sonoma and Napa counties respectively. But there is an excess of other varietals and of fruit produced for lower-priced wine.

The survey also found that a drive toward using more machines in the vineyard will continue, given the shortage of available labor in good part due to immigration restrictions.

“Critical labor issues will be the dominant concern this year. The reality in the wine business today is that the labor force is inadequate in every growing area, which is leading to increased costs and more incentive to mechanize,” McMillan added.

Among its other findings, the survey predicted growth in premium imports; that millennials will start to move toward pricier wines and away from red blends. It also forecast the total California grape harvest for 2017 will be 3.95 million tons crushed, 7 percent more than 2016.

You can reach Staff Writer Bill Swindell at 521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.