Pestle Analysis of the Wine Industry
WINE PESTLE ANALYSIS
Political
• The wine industry in the United States continues to face political challenges as it tries to extricate itself from arcane laws left over from the prohibition era. Although some states have abolished laws prohibiting the sale of beer, wine and spirits on Sundays and have opened the door to Internet sales of wine, many other states are not as progressive.
The hot political debate in 2010 revolved around the privatization of alcoholic beverage sales. Every state has a department that sets and enforces the regulations concerning the sale of wine, beer and spirits. Nineteen states, called "control states," also manage the sale of alcoholic beverages by acting as either the retailer, distributor or both. The governors of Virginia and Washington have both lobbied to open the door for private retailers to take over the business of distributing and selling alcoholic beverages in their states. The wine industry has taken notice of this push and advocates the concept in general, as some of the control states do not allow the sale of wine in their state-owned liquor stores which may impact overall sales trends in those states.
Economic
• The economic recession that started in late 2007 had a profound impact on the wine industry as consumers turned to the more affordable value-priced wines. In California's Sonoma county, a robust grape harvest in 2009 added insult to injury as wineries discounted their prices even more to keep their inventories down. Although US wine consumption grew by 1.9 percent in 2009, total sales dropped by 3.3 percent -- the first decline experienced by the wine industry since the early 1900s. Forecasters expect luxury spending fueled by economic growth to bring high-priced wines back to the forefront.
Social
• In their 2010-2011 State of the Wine Industry report, SVB Financial reported that Boomers and Gen X-ers continue to drive the luxury wine segment, and they expect that trend to continue until at least 2020.
Political
• The wine industry in the United States continues to face political challenges as it tries to extricate itself from arcane laws left over from the prohibition era. Although some states have abolished laws prohibiting the sale of beer, wine and spirits on Sundays and have opened the door to Internet sales of wine, many other states are not as progressive.
The hot political debate in 2010 revolved around the privatization of alcoholic beverage sales. Every state has a department that sets and enforces the regulations concerning the sale of wine, beer and spirits. Nineteen states, called "control states," also manage the sale of alcoholic beverages by acting as either the retailer, distributor or both. The governors of Virginia and Washington have both lobbied to open the door for private retailers to take over the business of distributing and selling alcoholic beverages in their states. The wine industry has taken notice of this push and advocates the concept in general, as some of the control states do not allow the sale of wine in their state-owned liquor stores which may impact overall sales trends in those states.
Economic
• The economic recession that started in late 2007 had a profound impact on the wine industry as consumers turned to the more affordable value-priced wines. In California's Sonoma county, a robust grape harvest in 2009 added insult to injury as wineries discounted their prices even more to keep their inventories down. Although US wine consumption grew by 1.9 percent in 2009, total sales dropped by 3.3 percent -- the first decline experienced by the wine industry since the early 1900s. Forecasters expect luxury spending fueled by economic growth to bring high-priced wines back to the forefront.
Social
• In their 2010-2011 State of the Wine Industry report, SVB Financial reported that Boomers and Gen X-ers continue to drive the luxury wine segment, and they expect that trend to continue until at least 2020.