SVB WINE FORECAST: “THE NEXT TWO TO THREE YEARS WILL PRODUCE ABOVE-AVERAGE RETURNS.”

The SVB, or Silicon Valley Bank, released a study suggesting the 2006 premium wine segment in the U.S. “presents the best conditions for success the industry has experienced in several years.” As far as distribution goes, wholesalers reportedly feel that the 2005 harvest will have a positive outcome and that “things are heating up.” Pinot Noir continues to do well thanks to the “Sideways” trend despite high prices, and Merlot shows signs of recovering from waning sales. Oregon will likely see a profitable future as a result of Pinot’s success. Cabernet posed the largest volume trends in 2005 at 115,000 with Chardonnay and Merlot falling close behind at 107,200 and 63,000. Screw caps are gaining popularity but have failed to shake the low-end stigma associated with the closure along with doubts about aging. SVB notes that the “best alternative we have seen so far is the glass cork made by Alcoa Closure Systems International.”