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robfantasy · 09-08-2003, 08:21 PM

The U.S. Wine industry is indeed a very lucrative business to be in. In fact the research I have gathered supports that the industry has been growing at an average rate of 8.5% annually since 1994. In this report, I?d like to analyze the entry barriers as well as the rivalry within the industry.

Of the 18.1 billion dollar market, there are around 1600 wineries, mostly family managed low-volume producing enterprises competing for market share. There are fewer than 12 major players in the industry that currently have significant market share, all of whom are large volume producers.

At the present time the U.S. wine industry is dominated by domestic brands produced out of California, primarily because of their ideal grape growing conditions and the aggressive marketing done by California wineries; however an emerging trend by foreign wineries is U.S. based acquisitions where foreign wineries can use existing distribution channels, suppliers and market knowledge.

To enter into this industry, you would first need to determine your source for grapes. A decision would have to be made about whether you would be buying high quality grapes from a reputable supplier (risking a bid war), purchasing vineyards (taking on a heavy capital investment) or entering into a long term contract with a grape supplier that is dependable.

A low volume winery would need roughly 1 million dollars in capital investment to compete as a small scale production winery. A high quality super premium/low production high price positioning strategy would be the most feasible considering the capital restraints.

The acquisition of a wine distribution network would also be needed to be successful. Due to government mandates on alcoholic beverages, a 3 tier distribution system where producers can only sell to a wholesaler, who then can sell to consumers, is needed. A strong branding strategy must also be implemented to push wholesalers to distribute.

A good strategy would be to build an ultra-premium image and create a brand association with specific cuisines or lifestyle traits to command an ultra premium price.

Exporting U.S. brands were not as favorable, according to my research, as domesticating them. Due to various government backed monopolies, import quotas and high import tariffs in foreign countries; full scale exporting poses potential problems for a small scale operation. Exportation on a reduced scale should be handled by agents and brokers in foreign markets. If deemed profitable, Joint Venturing with existing production facilities could be an option worth exploring.

anyone want to invest?

are there any spelling errors/gramatical errors in the above report?

J-Reel · 09-08-2003, 09:33 PM

I like Wine.

Wine taste good.

09-08-2003, 08:21 PM	#1
robfantasy Confirmed User Industry Role: Join Date: Jun 2002 Location: Medellin, Colombia Posts: 6,445	free u.s. wine industry consultation The U.S. Wine industry is indeed a very lucrative business to be in. In fact the research I have gathered supports that the industry has been growing at an average rate of 8.5% annually since 1994. In this report, I?d like to analyze the entry barriers as well as the rivalry within the industry. Of the 18.1 billion dollar market, there are around 1600 wineries, mostly family managed low-volume producing enterprises competing for market share. There are fewer than 12 major players in the industry that currently have significant market share, all of whom are large volume producers. At the present time the U.S. wine industry is dominated by domestic brands produced out of California, primarily because of their ideal grape growing conditions and the aggressive marketing done by California wineries; however an emerging trend by foreign wineries is U.S. based acquisitions where foreign wineries can use existing distribution channels, suppliers and market knowledge. To enter into this industry, you would first need to determine your source for grapes. A decision would have to be made about whether you would be buying high quality grapes from a reputable supplier (risking a bid war), purchasing vineyards (taking on a heavy capital investment) or entering into a long term contract with a grape supplier that is dependable. A low volume winery would need roughly 1 million dollars in capital investment to compete as a small scale production winery. A high quality super premium/low production high price positioning strategy would be the most feasible considering the capital restraints. The acquisition of a wine distribution network would also be needed to be successful. Due to government mandates on alcoholic beverages, a 3 tier distribution system where producers can only sell to a wholesaler, who then can sell to consumers, is needed. A strong branding strategy must also be implemented to push wholesalers to distribute. A good strategy would be to build an ultra-premium image and create a brand association with specific cuisines or lifestyle traits to command an ultra premium price. Exporting U.S. brands were not as favorable, according to my research, as domesticating them. Due to various government backed monopolies, import quotas and high import tariffs in foreign countries; full scale exporting poses potential problems for a small scale operation. Exportation on a reduced scale should be handled by agents and brokers in foreign markets. If deemed profitable, Joint Venturing with existing production facilities could be an option worth exploring. anyone want to invest? are there any spelling errors/gramatical errors in the above report? __________________ Looking to speak w/ high volume nutra CPA affiliates or networks... msg me

09-08-2003, 09:33 PM	#2
J-Reel Confirmed User Join Date: Feb 2002 Location: Boneprone's guest house Posts: 3,782	I like Wine. Wine taste good. __________________ Scheck out the new girls at www.hawtmoney.com ICQ 177-447-671