That is pretty sad. And I’d say for all the real American wine drinkers out there, irrespective of party, you should be drinking American wine as much as possible right now to support that loss of business which is a guarantee. Also, American wine is the shit. Literally there is so much great wine in the states.
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While I agree that there are a lot of great wines and winemakers, they are not really fungible commodities.
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I saw this projection graph and I had to stop myself from laughing out loud in front of my colleagues. Truth is simply that they do not know, and that’s ok, but why are they pretending to know?
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Yeah as soon as I saw that graph I groaned inwardly. And then later outwardly. Because everyone knew that articles would be written and business decisions made on the basis of that graph. But it doesn’t even pass the sniff test. Mild additional declines for a couple years followed by steady linear growth afterwards! Of course! 
No.
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I’m gonna take slight issue with this. The same can be said about any economist - even beating the Mendoza Line would make them a VIP.
SVB probably has more direct access to industry data than any other analyst covering the space. Like any other analyst, they’re better at helping explain and put into macro perspective what happened in the past, which has real value.
Any projection is just that - an educated guess.
I don’t doubt you. To my ex-consultant eyes the advice rendered was very generic B-school marketing advice. Doesn’t make it wrong, but I can’t remember the last time a winery didn’t embrace sustainability and contemporary aesthetics in their ad copy. The stereotype offered of current tasting rooms:
“I started seeing the differences between generations, and I looked at who was in the tasting room serving,” McMillan says. “It was my generation, people with gray hair. If you want to attract a younger consumer, you need some people that cuss a little bit, and they’ve got tattoos on them and maybe gauges in their ears.”
… well, how out of touch can one be?
I don’t know - it seems de rigeur for a tasting room to have a turntable in it.
More seriously, I thought the whole shift towards a tasting “experience” was to adjust to what Gen Z, Millennials, etc. want and how they respond to marking.
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I wish I had a video of the 2019 (I believe) speech given at the Oregon swine Symposium where he basically announced the demise of the wine industry at he hands of White Claw. In retrospect it’s laughable.
I realize the job there is to be ahead of the curve and predicting is really hard to do. The circumstances here are certainly more grim than in 2019.
The point is that SVB isn’t The Oracle.
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I enjoyed the hilarious Hermes scarf example a few years ago.
Really? I mean, that’s around the time when hard seltzer took off and experienced massive growth, much more so relative to wine. Then, the pandemic hit and all predictions were off, though during that period, all categories benefitted. Since the pandemic, both wine and hard seltzer have generally been in decline (though hard seltzer has dropped much more than wine).
He wasn’t right, but he also wasn’t that wrong.
I’m not totally disagreeing with you here - I just have a soft spot for analysts.
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While he was giving the speech my eyes were rolling at how massively overblown and hyperbolic the prediction was. It was DOA in real time. It was a recency bias tsunami.
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It’s really tough to go backwards to 2019, see predictions then and see where we are now with all that has happened.
No one saw Covid coming, and no one could have predicted how it would affect so many things, including drinking behavior and alcohol consumption.
IIRC, there were already signs of a weakening wine industry in 2019 . . .
Fun discussion, and though there may be disagreements about many things, the optimism shown in the current SVB reports is something we seem to all be skeptical about.
cheers
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There’s a bill in the California legislature that would require any wine with an “American” appellation to have only U.S.-grown fruit for sale in the state. Currently it can be up to 25% imported wine in an “American” bottle. Can’t say I buy any wine labeled “American,” but I know it’s a big issue for growers in Lodi who sell most grapes to industrial wineries for grocery store brands. Link to the bill
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If you read The Black Swan, it makes the point that pretty much all forecasts are close to worthless in terms of accuracy, never mind the absence of any distribution/range of possible outcomes and associated likelihoods/percentages. How many forecasts in 2019 discussed the possibility of a pandemic and the associated increase in consumption? I imagine 0. Likewise, how many contemplated the news re: alcohol and its health impacts, or the introduction of weight loss drugs that may be reducing consumption, or even the substitution of THC/weed for alcohol?
To quote the great John Bogle “nobody knows nuthin.”
I mean, not really. Hard seltzer’s growth really only started to boom in 2019, and exploded (to the upside) in 2020 and 2021. These are from Cowen showing growth in “beyond beer”, which doesn’t include wine:
Now, compare that to US wine (these are from SVB’s 2025 SotWI report):
Again, he wasn’t right, but he also wasn’t wrong.
Sure isn’t. Not gonna take seriously the wine market opinion of a financial institution that couldn’t even manage its own duration mismatch, you know, the core competence of a bank?
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SVB’s wine group was an odd bird within the bank. On the one hand, given the bank’s focus on high net worth Bay Area tech folks, it made total sense. On the other hand, given the bank’s focus on Bay Area tech, it made no sense whatsoever.
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That is for sure. Maybe SVB noticed all the tech bros’ private helicopters landing at Screagle.
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I think that bill will certainly help with large vineyards that are challenged to sell all their fruit to the bulk market at this point.
What I’m interested to see is whether the Wine Institute, which also supports wineries from a legal perspective, but certainly supports a lot in a large wineries, has to say about this bill. I do not see them supporting it as of yet and I’ve reached out to find out what their stance is on it.
They are the same group that lobby for an increased percentage of other Vintage is to be allowed into current vintage wines legally.
I guess we’ll wait and see. But I don’t see that turning our industry around at all. Though it will help.
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