Wineries and vineyards are frequently used in conjunction however, many times those traveling or driving on the road come across signs for wineries and then think, “Grapes are grown in this area?” More frequently than not, the person is in fact referring to an establishment that produces wine and a vineyard. A winery is simply a producer of wine with grapes harvested from the vineyard. Yes, many vineyards have their grapes grown in specific locations and produce their wines at the same spot, but most of the winery is located in a different area – the vineyards are managed by farmers, while wineries are run by winemakers. Wineries provide fun and exciting occasions to taste (and perhaps purchase) several varieties of wines produced there. Wineries also sell wine to bars, which is becoming a trend in many cities. Wine bars are the equivalent of wine to a beer bar today.
Winery Trends and Statistics
Wine was once an alcohol-based drink that was only enjoyed by boomers in the early years of their lives and for a long time many believed that sales of wine decreased due to the younger generation gaining in terms of purchasing power; however the years 2016 and 2015 have proved the opposite. Wine sales are not only rising each year, but also fine wine sales are projected to increase 9-13 percent until the year’s end (fine wines are typically priced around $20 or more) . It is expected to increase 4-8 percent in prices of $10 for bottles of wine. There is also an increase for wines priced below $8. Millennials are moving towards the premium range of wines. Wineries are among the largest industries in the United States; the winery industry has experienced steady growth and is predicted to continue growing over the next couple of years. The winery sector also is a major economic contributor in the United States. In 2015 alone, the vineyards and wineries employed more than 786,000 in the United States, and generated $114 billion of annual economic activity. For wineries to be profitable in this competitive industry, keeping an eye on important trends in the winery business is vital:
- Wine technology and apps are expanding faster than ever before due to the high demands from the younger generation for access to information about wine. Generations of today’s youth are not as knowledgeable about wine as baby boomers, but their curiosity is ignited, and wineries with up-to the minute apps that offer an endless amount of information to their customers are seeing their profits rise.
- Direct sales to consumers, also known as online sales, increased by 8.1 percent in the year 2015 and are expected to continue growing in the coming years as technology and the internet take over. Customers are willing to pay more to have their favorite wine delivered to their homes which is why wineries with amazing mobile and online sites are ahead of the pack.
- There’s been an incredible rise in the market for sparkling wines in the present especially Prosecco as well as Sangria. They have experienced constant growth over the past couple of years with Prosecco experiencing an 11.7 percent growth in value and Sangria expanding by 9.8 percent.
- The millennial generation is the biggest industry trend for wineries across the nation. They’re also a difficult generation to comprehend and serve. The complicated generation demands exclusivity as well as access to rare wines at a price that is affordable However, they’re not a fan of brand loyalty. They simply need value and an experience that is pleasant.
- While targeting younger generations is important for some wineries, focusing on women should be equally prominent among the demographic goals (especially women in the millennial generation!). Women account for 56 percent of the people who drink wine within the United States today (and 66 percent of the population of millennials is female). But, there’s been an astonishing rise in the number of males drinking wine too.
- As we have mentioned before that younger people are the most important demographic for wineries to cater to However, this is also a sign that the rise in green wine as well as production of organic wines and wines with the “story” matter most. The modern consumer wants to know the story behind the place where their wine comes from, the process by which it was made, and the like. Wineries that are better transparent to their customers will reap the benefits.
- Wineries that create fun and exciting events for their customers are ahead of the curve. We’ve all heard that young people want exciting unforgettable experiences more than anything else. Being innovative and bold is the most effective way to draw the young generation of consumers.
Reasons a Winery or Vineyard Would Need Financing
- Payroll is a must for wineries, considering that it requires a lot of employees to oversee the operation of the business (from being in fields, all the way to the manufacture of the final product). Making sure that your employees’ wages are covered throughout the day is vital.
- Expansion is always a thrilling issue for a winery owner who is doing well, however having sufficient capital in the beginning to finance an expansion could be difficult, even when the rest of your business is in place and in place to expand. It’s not a reason to hinder a successful winery proprietor from halting their expansion but a review of the range of loans available to wineries may help. Go visit acfa-cashflow (for Florida) to fund your winery business now!
- Inventory is an important factor for winery owners. Without an abundance of supply of wine, businesses could lose out on a great deal of opportunities to earn. Sometimes , wineries have to make sure they have enough inventory in stock prior to an important peak season or an opportunity to get an once-in-a-lifetime bargain on a specific wine that is very popular and weighing the various financing options that are available to owners of wineries for the purchase of inventory is crucial to ensure that they don’t miss the opportunity to borrow money.
- The purchase of new equipment is high on the list of priorities of all winery owners. When analyzing the huge impact technological advancements have had in each one of the industries across the United States, there will always be a point that a winery requires an upgrade to its equipment. For the majority of wineries, this could be a new Point of Sale Systems or other systems of technology that help to make the business more efficient. Other wineries might be the allocation of more time and resources for upgrading their storage facilities for wines that are temperature controlled. Whatever type of equipment is required for the specific winery, there is an option for a merchant loan that can assist in covering the upfront costs.
- The importance of renovations is to stay modern and fashionable for wineries! In a culture where the first impression is everything, you must ensure that the appearance of the storefront for a winery is appealing and attractive to its desired customers. Although not every renovation that is possible to make is expensive, there are circumstances that call for the need for more funds to help complete an essential change. Taking a look at the different ways to fund wineries is always an option.
- Social media and marketing are crucial in the modern world. Customers are heavily dependent on first-hand studies on wineries. They examine various marketing channels like social media profiles, reviews of customers, reviews from other customers, and credibility of a winery before deciding whether to go to or purchase a wine or food item at an establishment.