Sales at U.S. wineries were up 6.3% in 2013 but continued their downward year-over-year growth trend for the third-straight year.
Silicon Valley Bank, which released its annual State of the Wine Industry Report Thursday, did say, however, that it expects fine wine sales growth to increase for the first time since 2011 (in the range of 6% to 10%).
In the short term, the report authors predict “continued growth in overall demand” but “limited pricing power for producers.” In the medium term (five to seven years), the report cites headwinds to the industry when millennials begin to replace boomers as primary purchasers of wine. Higher levels of student debt and weak job prospects point toward a “modest growth opportunity.”
Institutional investors like TIAA-CREF are among the largest owners of U.S. cropland that produces wine grapes.