The wine business certainly is not immune to America’s… and the world’s… economic conditions.
Because Oregon’s Willamette Valley Vineyards is a publicly-traded company, we’re able to take a look at its financial results, and its numbers tell what many believe is a common tale in the wine business today.
According to the report issued for the quarter ending Sept. 30, 2010, WVV’s case revenues increased to $4.6 million in the quarter. That represented a 5.5% increase over the same quarter in 2009.
The year-to-date revenues increased to $12.25 million, a 1.6% hike.
So much for revenues. What about profits?
For the quarter, net income fell 30.9% to $171,345, resulting in gross profit declining by 7.4%.
Year-to-date net income was worse. It stood at $111,288 – down 83.3% compared to the first nine months of 2009.
WVV saw the increase in sales as a positive sign, especially considering how poorly some households have been faring. The company blamed higher cost of goods for the margin shrinkage, and said it’s taking steps to address that matter.
Business 101 tells us, however, that if cost of goods goes up, retail prices are likely to follow. Some expenses simply are out of the hands of wineries.
Every business and every winery is unique, but the “numbers” at Willamette Valley Vineyards provide some insight into how the wine world has been faring during the sudden economic downturn and slow recovery.