State of the US Wine Industry 2022 Written by Rob McMillan, EVP and Founder Silicon Valley Bank Wine DivisionContents 1 Introduction 3 5 Premium winery business performance 30 2 2021 predictions in review What we got right 5 6 7 7 6 Demographics and marketing 34 Millennials versus boomers 39 What we got partially right What we got wrong 7 Harvest and grape and wine supply 41 With two consecutive bad yields in California, shouldn’t grape and bulk prices rise? 3 2022 US wine business predictions and observations 8 9 42 Top-level forecasts Supply Volatile harvest swings for the past several years 44 44 9 I mpacts from disasters Demand 10 10 10 11 Price 8 Packaging and varietals 49 Seven tailwinds Seven headwinds 9 Cumulative negative health messaging 52 53 54 Neo-prohibition — the start Modern-day prohibition 4 Channel trends and changes 12 13 14 Predicting a party with business reopening 10 What do we do about declining demand? Total sales through the distributor channel 56 The beginning of a change in how we do things Changes in alcoholic beverage per capita consumption 57 57 58 58