The industry has been assisted by rising wine consumption in the United States over the past decade
Los Angeles, CA (PRWEB) December 04, 2013
The Wine Bars industry has enjoyed a stellar run over the past five years and has taken advantage of the changing hospitality landscape. The industry, which consists of bars that primarily serve a range of wines by the glass, along with a limited food menu, has comfortably outpaced the broader Bars and Nightclubs industry. While the recession caused industry revenue to decline 0.7% in 2009, wine bars have recovered strongly, fuelled by consumer preferences for affordable gourmet products. Demographic trends have also played a role in the industry's growth. According to IBISWorld Industry Analyst Andy Brennan. “Younger consumers are increasingly taking to premium beverages, such as wine and craft beer, and opting for small inviting venues that offer a unique dining experience.” Over the five years to 2013, the industry has grown at an average annual rate of 2.7%. In 2013, despite shaky consumer confidence, the industry is expected to increase 3.0% to $619.7 million.
The industry has been assisted by rising wine consumption in the United States over the past decade. According to the Wine Institute, an advocacy organization for the wine industry in California, per capita wine consumption increased 35.8% between 2000 and 2012 to 2.73 gallons. Wine bars have continued to spring up to cater to this demand. An estimated 1,146 are currently in operation throughout the United States. The main growth has occurred in major metropolitan areas such as New York and San Francisco, where incomes are higher than average and consumer tastes have a preference for premium products. Wine bars are also comparatively cheaper to set up and require less ongoing expenses than a full-scale bar or restaurant, which has been a big advantage during a time of anemic economic growth. By providing limited food services and a defined product range, operators can better control costs and enjoy the high product margins that wines provide.
“IBISWorld expects the industry to continue to steal market share from other forms of bars and restaurants over the next five years,” says Brennan. Consumers with rising incomes will continue to seek affordable gourmet dining experiences. However, wine bars will need to adapt to evolving consumer preferences, especially among younger demographics, which represent the industry's key market. On the back of these trends, industry revenue is expected to grow in the five years to 2018.
The industry is highly fragmented and consists of a large number of small operators, many of which are family owned and operated. There is also a very low prevalence of wine bar operators than own more than one location. There are limited economies of scale that can be gained from operating more than one wine bar, mainly due to the high labor intensity of the industry, although industry knowledge and experience certainly helps. Also, the varying state liquor laws make it difficult for owners to form large chains.
For more information, visit IBISWorld’s Wine Bars in the US industry report page.
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IBISWorld industry Report Key Topics
The Wine Bars industry comprises lounges and bars that primarily focus on selling wine for immediate consumption. These establishments may also provide limited food services.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.