Record consumption
consumer demand growth

It all sounds so wonderful. Consumption growth has to be good? Analysis of the aggregate data suggests most of the growth is derived from imports making further in-roads into our "core" consumer. Couple increasing imports with the growth in super value brands, like two-buck chuck and we appear to this observer to be consuming ourselves.

Back when the industry could not meet demand, some of our more brilliant players began importing bulk wines to fill bottles. We as an industry opened the channel, increased the flow and then were surprised when the suppliers in Australia, France, Italy and elsewhere determined there was more value and profit in the transaction by bottling the product and putting it on the shelf-space created by "our US customers".

Can the rising tide be stemmed? That is huge question bouncing around board rooms through out the industry. A weaker dollar, tariff's, mergers, bad luck are all hoped for to assist the industry. Increasing demand through marketing seems to help our very capable competitors as well as ourselves. What is the answer? Consider product differentiation on an industry basis. Identify, develop, and promote those attributes in which we, the US industry has a competitive advantage. Develop those further that are sustainable advantages. Promote those attributes to the consumer directly to build core affinity and allegiance. Price our product with its attributes fairly and provide good value at every price-point in the category. Once we have these pieces in place, then extract value recognizing the need to reinvent ourselves on a five-year timeline to maintain those sustainable competitive advantages.

Here's to the industry exercising wisdom, prudence and good judgment over the next few years as we work our way out of this mess.