“The consumer wants wine as their preferred alcoholic beverage. They just don’t know it.” That’s why Rob McMillan of the Silicon Valley Bank remains positive and optimistic about the future of the global wine industry despite the many challenges it faces. Here he shares his thoughts as the latest leading wine figure taking part in the Wine Future conference in Coimbra in Portugal in November.
Rob McMillan will be sharing the latest insights from Silicon Valley Bank into wine drinking trends in the US at Wine Future that takes place in Coimbra, Portugal between November 7-9. Click here to find out more about the event.
What do you see as being the biggest challenges the wine industry is facing?
The wine business faces multifaceted challenges. Climate change threatens vineyards. Alcohol as a category has wine losing share to beer and spirits. The regulatory landscape is complex, and the anti-alcohol lobby adds a layer of uncertainty. But the biggest threat is the aging of post-WWII consumers, who still control a significant portion of the world’s wealth. Finding a path to compete for the younger consumers is a work in process.
What do you see as the big outstanding opportunities and how do you see the industry capitalising on them?
If the industry growth pattern is flattening, we have to be more efficient in finding consumers who are more likely to buy our wine. The advances in data management paired with artificial intelligence create that opportunity. With the use of advanced and predictive analytics, a winery can now forecast customer behaviour, optimise marketing strategies, locate potential customers, and sell to them in the most efficient manner possible.
What do you think have been the big big step changes in the wine industry in the last 10 years?
The most impactful milestones is the accelerating use of technology and the internet, which has supported change in all phases of the business. In wine sales, the largest milestones are the routine sales of bulk wine on an international basis, and the growth in winery tourism and cellar door sales. Perhaps the most interesting milestone has been the creation of a New World, Old World wine discussion where both styles are accepted and consumer friendly.
The most disappointing milestone has been the great promise of a wine-loving consumer in China that has since lost its promise.
Are you optimistic or pessimistic about the future of the wine industry in the next 10 years?
If you draw trendlines starting from around 2010, everyone should be a pessimist. But that’s not the way consumer goods operate. Consumer categories go through periods of adaptation. Understand the problem, create solutions, execute, and iterate. The tools are aligned for success if we evolve.
In my opinion, the consumer wants wine as their preferred alcoholic beverage. They just don’t know it.
How and why did you first get into the wine industry?
I was assigned the task of identifying business verticals that weren’t in favour and underbanked. At the time I was a novice consumer favouring white Zinfandel with 7up. The anti-alcohol industry had made significant strides in slowing demand, and banks indeed were abandoning the industry.
In the original business plan, I saw an indication that the boomer consumers would create significant category demand, and we opened the new business practice in 1994 which was exactly the trough of the last down cycle. Since then, I’ve built the practice and in the middle 2000s, moved away from managing and into the role I have today.
What do you most enjoy about working in the sector?
There isn’t a day that goes by that I don’t find something interesting that I didn’t know about the business. I love learning, understanding and creative ideation.
What do you find frustrating and would like to change about the wine industry?
As someone who observes the wine business, I think it’s important to approach new information with an open mind and a willingness to understand different perspectives. While it’s easy to embrace positive news, it’s important to dig in to information and remain curious, asking questions when the news is more critical.
So, if I could change one thing, it would be that our industry becomes more open-minded about the business. Trust your instincts, but let data guide decisions. Ultimately, the first step in making positive change is understanding the issues at hand. To bring it full circle, I think that’s one of the pillars of why Wine Future exists.
Can I ask why you want to be involved in Wine Future?
The wine business is one of the most complex imaginable with risks from farming, regulatory, consumer shifts, and a robust and effective anti-alcohol group, among others. But despite all of this, there are some truly impressive individuals and companies out there making a difference. That’s why I’m always excited to see Wine Future bring together the best and brightest in the industry.
Collaborating with these leaders is an incredible opportunity to learn and grow, and I feel grateful to be a part of such an amazing community this year.
What is the theme of your talk and why have you chosen that topic?
I’m going to present some information that will show sales patterns in the US. The wine industry is experiencing a shift in consumption patterns – that is something most everyone can agree with. But it’s important to identify the reasons behind it. The information is not what most of us would expect, but it fits in with the rest of the narrative I’ve developed over the past decade about the road ahead.
- Rob McMillan, EVP and wine division founder at Silicon Valley Bank, a division of First Citizens Bank, will be presenting a keynote talk on “The current status of the wine industry” at Wine Future during a session at 9am on November 9. taking part in a panel debate.
Wine Future 2023 – Coimbra November 7-9
Wine Future 2023 promises to be the leading event in the world to tackle the biggest challenges facing the global wine industry and what steps its stakeholders need to be taking and focusing on to succeed in the future.
It is the fourth Wine Future event to take place following other editions first in Rioja in 2009, Hong Kong in 2011, Wine Future Virtual 2021 and Green Wine Future in 2022. Founder Pancho Campo claims the ambition and overall goal for Wine Future has not changed since 2009 when, in the middle of an economic crisis, it looked to assess its impact and offer solutions and inspiration to everyone involved in the global wine industry.
Close to 25 years later and the world is again facing huge financial difficulties, rampant inflation, a global climate emergency and a declining wine market in most major wine consuming countries. It is against that backdrop that Wine Future hopes to make a difference.
Key themes to be addressed at this November’s conference include:
- Engaging new consumers – particularly Generation Z and Millennials.
- The impact of global economic uncertainty, especially inflation.
- The opportunities of greater diversity, equity and inclusion in the wine industry.
- How we can reach new audiences and better engage with existing wine drinkers through celebrity endorsements, influencers, and working with major international music and sporting events.
- The use of digital marketing and social media to gain a new consumers.
- Using new technologies to improve sales.
- What can we learn from the competition from alternative beverages?
- The human impact of sustainability.
Key wine figures lined up to take part and share their insights and hopefully offer inspiration to the sector are: Emma Bertrand, Rob McMillan, Sonal Holland MW, Ian Ford, Adrian Bridge, Frederico Falcao, Martin Reyes MW, Robert Joseph, Dirceu Viana MW, Siobhan Turner MW, Natalie Wang, Alder Yarrow, Stephen Wong MW, Ulf Sjodin MW, Michael Wangbickler and Paul Schaafsma.
The event will also hear from inspirational figures from outside the industry including: Sir Christopher Pissarides, awarded the Nobel Economy price in 2020; the Secretary General of the UN International Youth Organization, Max Trejo; and the lead singer of Iron Maiden and entrepreneur Bruce Dickinson.
- To find out more and to register go to the Wine Future website here.