2023 wrap-up for the wine business

Topics we covered in 2023

• Sustainability (8-part series that had Drew Bledsoe to CEO of Silver Oak David Duncan and across the world from the US to Spain to Bordeaux)
• State of the Wine Collector (LA, Dallas)
• Leveraging non-gov’t organizations (VDP, Grand Pagos) to promote wine

Revenge travel

• Post-Covid move back to in-person / offices -> delivery of wine -> reduced visitors to wine country and people buying wine to stock and drink at home
• Americans Took Record-Setting Vacations In Summer Of ‘Revenge Travel’ - 32.8% of households went on vacation (a record since data kept in 2015)

Online retailer issues - Underground Cellar (April 2023), SommSelect (July 2022), Winc (Nov 2022, 1 year after going public) all went bankrupt, others struggling back to 2019 or even lower levels

• More missing bottles w/ Sherry Lehman (~Mar - Aug 2023), Chelsea wine storage

Inflation / economic slowdown globally and impact on wine market

• Bleak outlook for 2024 as fine wine buyers narrow their focus - Liv-Ex indexes down double digits year to date; “flight to quality” - Bordeaux benefiting, Burgundy, Champagne down
• Inflation is used as the “reason” many wineries increase wine prices
• BBC article on wine pricing increasing - glass, labor, fruit - all getting more expensive and wineries increasing price; and burgundy/napa/champagne got very expensive, consumers starting to pull back
• Many napa wines taking prices up to $300+ (Memento Mori - $225 -> $300)
• Chinese consumption is as low as 1996 levels, - the peak of 19.6M HL in 2017 to 8.8M HL in 2022 (#8 globally) vs. US in the top slot at 34M HL

Global health/wellness; Millenial/Gen Z slowing down alcohol consumption

• WHO says no alcohol is good for you (released a statement Jan 2023)
• Gen Z drink 20% less than Mill, who drink less than prior generations - college-age abstainers went from 20% -> 28% in the last 20 years (to 2020)
• Better non-alc and low-alc alternatives (kombucha, pot, mushrooms, better no/lo options for alcohol)

Is wine part of the good life? 

• Wine, particularly fine wine, is used differently than beer & spirits; it is also better from a health perspective
• The Wine Access interview re-emphasized - the experiences with wine
• The Italian lifestyle / holy trinity of the good life - cheese, wine, & bread

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