BUS 400 DAKZR1
Capstone Project
Situation Analysis: Willamette
Valley Vineyards
Kurt Berning
Amanda Aplet
Demi Stinson
Ryan Key
Zach Steinkamp
BUS 400 10/26/11
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Contents
Introduction of Company .............................................................................................................................. 3
Timing of New Product Entry .................................................................................................................... 4
Strategic Alignment and Threats .............................................................................................................. 5
Five Forces Analysis ...................................................................................................................................... 5
Threat of Entry .......................................................................................................................................... 5
Threat of Competition .............................................................................................................................. 6
Threat of Substitution ............................................................................................................................... 6
Threat of Powerful Buyers ........................................................................................................................ 6
Threat of Powerful Suppliers .................................................................................................................... 7
Analysis of Existing Competition ................................................................................................................... 7
Competitive Factors .................................................................................................................................. 8
Financial Analysis ...................................................................................................................................... 8
Supply Chain Issues ................................................................................................................................... 9
Industry Segmentation and Demand Issues ................................................................................................. 9
Size of Target Market and Market Segmentation................................................................................... 10
Target Consumers ................................................................................................................................... 11
Product Strengths and Weaknesses ....................................................................................................... 12
Market Penetration Strategy .................................................................................................................. 13
Internal Resource Assessment ................................................................................................................ 13
Opportunities in the Industry ................................................................................................................. 14
Recommendations ...................................................................................................................................... 15
Appendix
Appendix A .................................................................................................................................................. 18
Appendix C ................................................................................................................................................. 19
Appendix D- Financial Charts and Graphs................................................................................................... 19
Figure D.1- Percentae Change in Sales from 2008-2011 ........................................................................ 19
Figure D 4.2- Percentage Change in Net Income from 2008-2011 ......................................................... 20
Figure D 4.3- Net Income/Net Sales for 2007-2011................................................................................ 20
Figure D 4.4 – Debt Ratio Analysis .......................................................................................................... 21
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Introduction of Company
This situation analysis is written about Willamette Valley Vineyards (WVV). WVV is a publicly
traded company categorized as a Vineyard Management and Maintenance Service based in the
Willamette Valley of Oregon. Within the context of this analysis, WVV will be used as a model to gain
better insight into the wine industry, specifically the viability of the use of AstraPouch to distribute
packages of wine. Doing so will provide insight into this unique packaging scheme for the Freewheel
Wine brand on behalf of Stone Jug Beverages, LLC.
Competitive Advantage
WVV has three main competitive advantages as an organization. These are its founder, Jim
Bernau, the process used to grow the grapes and the embodiment of the characteristics of the region in
which they are grown in their wine, and the fact that the vineyard receives most of its funding from
public rather than private investors.
The founder, Jim Bernau, is one the distinct advantages that WVV has on its side. He is
renowned in the industry as a “unique part of the Oregon wine industry” and credited with coming up
with “the blueprints that the rest of us are still building on” according to an article from OregonLive
Tims. Bernau was able to convince public shareholders to supply him with $5 million in capital and open
the winery in 1989. His leadership is a key reason that WVV became the first Oregon Winery to start its
own distribution company, which now distributes to all states and eight foreign countries.
WVV’s product line is differentiated because it is able to offer wine with characteristics unique
to the Willamette Valley region. It uses a canopy management system with fruits that are native to the
region, fermenting and barreling each vineyard lot separately. The stylistic qualities of the wine
emphasize the characteristics of the fruit, mainly “depth, richness of mouth feel and balance,” and the
underground cellar used can replicate the effects of wine made in Romaneé-st-Vivant in Burgundy,
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France since it is placed near the top of ancient, volcanic, redder soil giving the wine a unique
“perfumed, satiny” traits (Willamette Valley Vineyards)
Timing of New Product Entry
A recent study by the California Polytechnic State University examined generational differences
in consumer perceptions of wine packaging based on whether a traditional cork, a synthetic cork or a
screw cap was used. The study broke its sample into two categories, the Millennial age group and the
non-Millennial age group. Their study involved a survey that found that non-Millennials were “not very”
to “somewhat familiar” with screw tops, stating that they were more familiar with traditional corks.
However, the millennial group was the most familiar with screw-caps, stating that they could easily
extract wine from the bottle and it had an appealing appearance. The changing perceptions of wine
packaging across these two age groups makes this a good time to take advantage of the changing
perceptions, the researchers blatantly stating in their report that “it is recommended that wineries with
segmented product lines include a screw cap as a packaging option for the brands they target to
Millennial wine consumers” (Pyle, McGarry Wolf and Magill).
Trends in the Industry Environment
The most significant recent changes in the wine industry is strong demand for win that has
spurred large growth in the wine industry. A recent study done on the Top 10 Consumer Packaged
Goods in 2010 by the Nielson Foundation found that wine is the third quickest growing consumer
packaged good in 2010 in terms of dollar growth and unit growth. Also, Nielson found that from 2000
through 2010, total US table wine sales show a trend of increasing year to year (see appendix A).
Starting around 205 million cases in the year 2000, it is estimated that in 2010, 278 million cases of wine
were sold (Brager).
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The consumption of wine “on-premise” or at vineyards, restaurants, etc., has decreased as
restaurants suffer according to the economic climate and consumer confidence. However, there is an
increase in the amount of wine consumed “off-premise” or wine that is purchased at a store and
brought home. Regions that reported higher unemployment rates also reported drastic increases in
wine sales, with the exception of more luxurious and expensive bottles.
Strategic Alignment and Threats
For the most part, WVV’s strategy has aligned with that of its competitors. It currently offers
services that allow customers to buy wine online and WVV maintains a blog for enthusiasts to stay
connected and informed with the company. As far as sustainability, WVV was “the first winery to use
certified-sustainable cork in all of its bottlings, being named agribusiness of the year in 2009; being one
of the first wineries to gain certification from every group monitoring environmental and sustainability
initiatives; and, just a few weeks ago, winning two "best of class" awards at the prestigious San Francisco
Chronicle Wine Competition in Sonoma County” (Tims).
Five Forces Analysis
Threat of Entry
The threat of entry into the wine industry is low to medium. The market is extremely saturated
with wineries from all over the world, and without brand loyalty or recognition of the label, the odds of
penetrating the market are not good for start-ups. “In Oregon alone there are over 400 wineries and
Oregon wines are a small percentage on the shelves compared to both Washington state and
California”, says Jim Bernau, the owner of Willamette Valley Vineyards. Additionally, 33% of the wine
being bought is imported from Italy, France, and Australia (Mintel Oct. 2010). Besides a saturated
market and consumers that have tunnel vision for known brands, the investments needed for land,
equipment, and workers is very large. According to a study called “Bulk Winery Investment and
Operating Costs,” the total investment costs of a winery looking to produce 100,000 gallons of wine are
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around $1,168,575.00, or $11.69 a gallon. Although this price changes based on a variety of factors,
starting a winery anywhere is a very large investment.
Threat of Competition
The threat of competition is high to moderate. A main competitive struggle for wineries is
gaining market share in a saturated market dominated by established firms. Oregon growers pulled in
$1.5 billion in annual revenue in 2011, while California made $19 billion in annual revenue last year
(Bernau). Combine this with competition from other states and international wineries, it becomes clear
that competition very important in the wine industry. Product differentiation is one of the best ways to
limit the threat of competition, but the low switching costs of the wine industry make differentiation
difficult. To the inexperienced wine connoisseur the wine aisle is intimidating. A person might choose
the two or three wines they like rather than look through a hundred different wines for specific traits or
qualities. New customers especially are more likely to spend a small amount of time looking for a wine
that fits their tastes and price level. The amount of established firms and the difficulty of differentiation
makes competition high to moderate in the wine industry.
Threat of Substitution
The threat of substitution is high. Oregon is known for having a large amount of quality craft and
microbreweries. According to the Oregon Brewers Guild in 2010, there were 97 brewing companies that
were operating 128 facilities in 54 cities within the state of Oregon. In Portland alone there are 41
operating breweries which is more than any other city in the world. Willamette Valley Vineyards, along
with any winery operating in Oregon, faces substantial challenges in expanding their market share of the
alcohol industry versus these local brewers. With Oregon being the second largest producer of craft
beer in the US, it is clear that the substitute is a threat.
Threat of Powerful Buyers
The threat of powerful buyers is high. With regards to the average consumer, the threat is high
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because there is no real way to lock down individual consumers due to the low switching cost and the
high volume of different wines. Wines can be marketed to demographics but even certain demographics
change their taste or like different varieties. The threat level is also high when considering retailers and
distributors. Restaurants, liquor stores, and grocery stores buy large quantities of wine based off of
consumer demand projections and given supply of the wine type. The can choose almost entirely based
on price, simply because of the volume of wineries looking to sell their product. To compound this
problem, supply of grapes is rising higher than demand, causing a small dip in prices. This is good news
for consumers, but hurts the profits of most wineries in the industry.
Threat of Powerful Suppliers
The threat of powerful suppliers is low. Generally speaking, there are two major types of
suppliers in the wine industry. There are vineyards which supply grapes and wine makers which take the
grapes and make wine. The majority of wine makers have their own vineyards and supply their own
grapes. Unless something extreme happens like a bad growing season that would lead to a shortage of
grapes, the supply is quite stable. Even in extreme cases, grapes would be sold or bought from different
vineyards to compensate for other losses. The threat would be high if the wine maker does not own a
vineyard, and this is a rising trend. Entrepreneurs are able to buy the wine wholesale and bottle it
without all of the start-up costs that are normally associated with owning or running a winery. This small
minority would face a higher threat of supplier because they do not own the production process.
Analysis of Existing Competition
Competition in the wine industry has changed over the past two decades in a way that
dramatically impacts Willamette Valley vineyards. Small wineries like WVV are becoming less and less
common as competitive forces have increased consolidation, creating a situation where the top eight
companies produce more than 75% of the wine in the US. This means that the remaining 1600 wineries
produce only 25% (Blue Ocean). These large companies benefit from economies of scale, which allows
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them to succeed at the key factors of the wine industry. These factors include earning a higher return on
each bottle of wine or spirits sold, gaining brand or product recognition to drive sales, and having a
diverse product line that can withstand volatility in the price of inputs or consumer tastes.
Competitive Factors
Willamette Valley Vineyards competes against both regional wineries and large national and
international producers and distributors. We have selected one company from the small regional
market, Castle Wines, and two companies from the large national market, Constellation Brands and
Beam, Inc. to compare financials with WVV. We feel that this comparison is apt because it compares
WVV to a small but growing wine maker, Castle, and with industry giants like Constellation and Beam
whose actions drive market expectations and set prices and industry standards. If WVV is to achieve
sustained profitable growth, it will have to take market share from these industry giants. To do so, it
must record a strong pattern of growth while beating the industry ratios.
Financial Analysis
After a study of WVV’s financials, changes must be made by the company to stay competitive.
WVV’s financials reveal some red flags that WVV must address in order to compete in the industry. First
off, although WVV has experience strong revenue growth, it’s net income growth has fallen in 2011 and
is below the industry average of the last 4 years(D4.2). Even worse, WVV’s percentage of net
income/sales has fallen consistently over the past four years, even as profits have risen (D4.3) On the
other hand, Beam Inc. and Constellation Brand are both in a strong financial position, seeing growth in
both Net Income and Net Income/Sales over the past two years (Mergent Database).
The main way that WWV’s large competitors compete is through size and diversity of product.
Beam Inc. is dedicated to selling premium spirits, including well-known brands like Maker’s Mark and
Jim Bean, and generates $3 billion in annual revenue. Altogether, it owns more than 50 subsidiaries in
the wine and spirit business. Constellation Brands is similar, owning well over 50 subsidiaries and
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generating about $3 billion in annual revenue. This may be the source of the recent financial advantage
had by these wineries over WVV.
A strength of Willamette Valley Vineyards relative to its competitors is its relatively low debt
ratios (See Appendix D 4.4). WVV has a LT D/E ratio of .18, compared to an average of .94 for Beam and
Constellation. Also, WVV had a much better Current Ratio, meaning it is very able to pay any current
debt or obligations with its current assets. Both Beam and Constellation have accumulated debt through
acquiring companies and expanding their portfolio. If WVV can create or expand its market share
through debt financing, it will be difficult for either large firm to respond because they are already
heavily invested and have relatively high levels of debt. (Mergent database)
Supply Chain Issues
Competitors of WVV can leverage their strong relationships with retailers and distributors
through the supply chain to gain prominent shelf positions and lower prices. There is also a
consolidation of retailers and distributors across the US in the wine industry, also raising their bargaining
power relative to wine companies (Blue Ocean). As a small local winery, WVV receives worse margins
from distributors and retailers and struggles to compete for prominent shelf space. This means that
WVV must resort to direct sales to earn the margins needed to stay profitable as a company
Industry Segmentation and Demand Issues
As the recession has continued to worsen people are exercising caution when it comes to
discretionary spending. Due to these conditions and the fact that in 2009 overproduction in Australia,
California and Europe, prices declined and consumers spent less than before (Wine US). However,
purchase volume did increase, these increases stemmed from consumers trading down to lower priced
brands and waiting for sales (Wine-US). In response, boxed wine and wine under $10 did especially well.
In addition, more consumers moved off-premise in order to save money instead of consuming onpremises such as in restaurants or bars.
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The growth rate for the wine industry peaked at 7.5% in 2006 and then began to slow as a result
of the economic downturn (Wine-US). In 2009 sales of wine in the US were more than $30 billion
however, this was a 1% decrease from 2008 (Wine-US). The Wine industry is on the rebound however,
in fact, the U.S. surpassed France as the world's largest wine-consuming nation in 2010, with wine
shipments grew 2% from the previous year to nearly 330 million cases, which is a record high for the
industry (2010 California/U.S. Wine Sales). The number of US wineries is growing as well showing
promise for the industry; the number of bonded wineries in the US grew from 6,705 wineries in 2009 to
7,626 wineries in 2010 (Number of California Wineries).
Size of Target Market and Market Segmentation
Based on Census Bureau population projections and incidence of drinking wine, there were an
approximated 75 million wine drinkers 21 and older in 2010 (Wine-US). Also in 2010, the US consumed
784 gallons of wine (Wine Consumption in the US). Older generations have the highest incidence of
drinking wine; 41% of Adults ages 55-64, 36% of adults ages 45-54, and 36% of adults 65 and older
report drinking wine. In comparison, 20% of adults 21-24, 30% of adults age 25-34 and 35% of adults 3544 years old who report drinking wine (Wine-US). In addition, women are much more likely to consume
wine than men are. According to Mintel's Wine Report, 39% percent of women say they drink wine
compared to 29% of men (Wine-US).
There are many segments of wine within the industry. There are imported wines and domestic
wines and within these categories there are premium wines and budget wines which are categorized by
quality. Wines are classified as still red, still white, still rose, sparkling or champagne, and fortified wines.
There are also many different types of wine based on the type of wine grapes used; the wine offerings
of Willamette Valley Vineyards include Riesling, Chardonnay, Pinot noir, and Pinot gris.
Consumers in the wine industry have been segmented in several different ways, but each
segmentat is very similar. Constellation Wines US breaks the market up into six segments. These
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segments include enthusiasts, image seekers, savvy shoppers, traditionalists, satisfied sippers, and the
overwhelmed consumers. Enthusiasts are considered to be 12% of wine drinkers and are enthusiastic
about the whole wine experience from researching what wine to buy to sharing it with their family and
friends (Constellation Wines US). Image seekers are considered to be 20% of the market and they need
to feel sophisticated, fun, adventurous, and trendy (Constellation Wines US). Savvy shoppers are 15% of
wine drinkers and they are looking for a great wine at a great value (Constellation Wines US).
Traditionalists are said to be 16% of wine consumers, these consumers need to feel that their wine is
made by a well-known winery that has been around for a while (Constellation Wines US). The Satisfied
sipper segment accounts for 14% of consumers and they want a sensible choice they can feel
comfortable serving to family and friends (Constellation Wines US). Finally, the overwhelmed consumer
accounts for 23% of consumers in the wine industry, these consumers want good shelf descriptions or
recommendations by retail or wait staff (Constellation Wines US).
Target Consumers
As previously mentioned, wine drinking is more prevalent in older generations. Spending on
wine follows this pattern as well; Generation X spends about $78 annually on wine while younger
Millennials spend $61 (Wines-US). Baby Boomers spend the most with an average of $125 annually on
wine (Wine-US). Aforementioned, women comprise a larger wine segment of wine consumers than men
do. In fact, wine is the only alcoholic beverage that is more widely consumed by women than by men.
This may be due to wine’s sophisticated and gentler image. Although women are more likely than men
to drink wine, women are also more likely to drink spirits than wine, Mintel’s report shoes that 39% of
women report drinking wine and 43% report drinking spirits (Wine-US).
Some wine drinkers claim that their wine consumption has been effected by the recession.
Mintel found that approximately 27% of wine drinkers are drinking more wine at home and 22% say
they are drinking less wine in general due to the recession (Wine-US). About 20% of have started
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drinking less at bars/restaurants to save money while 15% have traded down to less expensive bottles of
wine (Wine-US). Also, 7% report drinking less imported wine, which tends to be more expensive than
domestic wine and 5% say that they will continue to drink cheaper wine even when the recession is over
(Wine-US). However, 42% of all wine drinkers report that the recession has not impacted their wine
drinking or buying habits (Wine-US).
Customers who do not drink wine may drink beer or spirits as a substitute. The wine report by
Mintel explains that 46% of adults report that they drink beer and 47% drink spirits both of which are
much higher than the 34% that report drinking domestic or imported wine (Wine-US). While there are
projected to be 75 million wine drinkers over the age of 21, there are approximately 102 million beer
drinkers and 102 million people who drink spirits (Wine-US).
Product Strengths and Weaknesses
Willamette Valley Vineyards’ strengths are that its products are unique and of high quality. Their
wine has won many awards for quality and taste. WVV’s products are unique in the fact that, as
mentioned previously, the wine is produced with characteristics unique to the Willamette Valley region.
However, a major weakness of WVV and the wine industry as a whole is that wine makers are not
effectively targeting younger generations such as the Millennials. Adults ages 21-24 are the smallest
group of wine drinkers. Due to the economic condition and the increasing variety in cocktails spirits and
beers, young adults are often choosing substitutes over wine.
Willamette Valley Vineyards is currently supplying all of its wine in glass bottles. This type of
container is used by the majority of wine producers and is thus the most frequently purchased container
by all age groups. However, boxed packaging is preferred by 31% of wine drinkers between the ages of
21-24 (Wine-US). Box wine is mainly used for inexpensive wine and is commonly bought by this
particular age group, however, it is also considered more convenient and more environmentally friendly
than traditional glass bottles.
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By packaging wine in an AstraPouch, WVV would be able to capture customers seeking the more
convenient and environmentally friendly products while still providing the perceived quality of a bottle
that boxed wine lacks. Consumers are moving towards greener living and are looking for ways to live
more sustainably and younger people, typically those between the ages of 25 and 34 are the most
willing to go out of their way to buy green products (Green Living-US).
Market Penetration Strategy
There is a growing market for green, sustainable products and by providing a product in more
eco-friendly packaging WVV will be able to target those customers. The AstraPouch would reduce waste
and the package is fully recyclable. There are products like the AstraPouch in existence in other
countries such as Australia; these products are marketed as convenient and easy to take with you. The
aspect of convenience will attract the young and active consumers as well. By selling the wine in stores
such as Trader Joe’s, New Seasons, and Whole Foods as well as on WVV’s website, WVV will be able to
reach the younger, active, and green customers that the AstraPouch is targeted towards.
Internal Resource Assessment
Willamette Valley Vineyards profits from being a small, publicly traded company. This allows for
WVV to gain more investment than privately held wineries, but still keep a close relationship with
consumers. In addition to owning shares in the company, shareholders are able to attend special events,
receive priority ordering of limited products, and have priority wine tasting events and receive discounts
through the WVV Wine club. A blog is provided on WVV’s website that allows loyal customers to learn
more about wine and to participate in the wine consumer culture. WVV allows for more than owning a
piece of a company, it offers an experience in being part of the company.
Willamette Valley Vineyards competitive advantage lies in the public reception it gets from
winning wine tasting awards and placing high in wine competitions. WVV’s most recent award was the
2011 Best Winery of the Year by Wine & Spirits magazine. Also, by having a strong sustainable policy,
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WVV is also creating a competitive advantage by being an actively eco-friendly company. For a Pacific
Northwest based company this is a good advantage as the Pacific Northwest is the leader in the green
sustainable movement in the United States. As WVV sells wine in each state and in some foreign
countries, it will be able to use its sustainable policies to stay ahead of traditionally run wineries. By
continuing its eco-friendly policies and continuing to place high in competitions Willamette Valley
Vineyards will be able to stay ahead of competitors.
Opportunities in the Industry
In the United States Hispanics and high income earning African Americans are a relatively under
targeted segment by the wine industry, even though reports indicate that wine consumption is going up
among both groups. Hispanics are expected to reach a buying power of $1.2 trillion in 2012, while
African Americans spend $100 billion annually on wine, spirits, food and entertainment. (Wine- US) For
an industry suffering from overproduction, wineries would do well to expand into these underserved
segments. African Americans that drink wine tend to be well-educated and of middle to upper income.
They also tend to drink in more social settings with friends and colleagues from multicultural
backgrounds. Wine is more likely to be given as a gift to others among Hispanic wine consumers, and
brought to different celebrations. Hispanics are also the most likely group to drink wine from alternative
packages, while African Americans tend to be the least likely to use alternative packages. Both groups
tend to be more image conscious of the wine they are drinking, then Whites, but at the same time
prefer modern screw top bottles to traditional corkscrew bottles. African Americans are more likely than
any other group to buy wines with less traditional names, like Three Blind Moose, while both groups
prefer fruitier flavored wines than the White demographic.
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Recommendations
As already discussed, the wine industry is experiencing growth, but has only seen a minimal
level of innovation and new business practices. WVV could target customers from these companies that
are already thinking about locally bought products, and sustainable production through innovative
packaging. The AstraPouch designed by Constellation is a great example of differentiated packaging (See
Appendix C) that WVV could use to gain a competitive advantage. It allows for the contents to stay fresh
longer once opened, it is easier to travel with, and it can hold twice as much liquid. This approach to
selling wine decreases the threat of competition because it sets the product apart from the rest of the
industry. WVV has set itself apart as a vineyard that produces product sustainably, but it needs to
greatly expand this pitch to a broader audience to take market share from the large industry companies.
We recommend that that Willamette Valley Vineyards bring out a line of alternatively packaged
win using the AstraPouch technology. This alternatively packaged wine would not be targeted at
traditional wine consumers, but younger Millennials and Generation X-ers. As Hispanics purchase
alternatively packaged wine more than any other group, this would likely draw more Hispanic
consumers to WVV, which with WVV proximity to California could be a large potential customer base.
Less serious and more active label names, such as Red Bicyclette, could be used to appeal to younger
generations, while more Hispanic titled labels with serious design styles could be used to appeal to the
Hispanic population. As alternative packaging tends to be less costly, and more eco-friendly than
traditional bottles, WVV would be able to produce differentiation and scale cost-based packaging to
different levels or income. Expansion into alternative packaging would best serve Willamette Valley
Vineyards in such a highly competitive industry, and by creating another line for the alternatively
packaged wine, WVV will not alienate its base of older consumers.
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Works Cited
"2010 California/U.S. Wine Sales." The Wine Institute. Wine Institute, 17 Mar. 2011. Web. 25 Oct. 2011.
<http://www.wineinstitute.org/resources/statistics/article584>.
Brager, Danny. State of the Wine Industry – from a Consumer Perspective. Sacramento: The Nielson
Company, 2011. Document.
Chan Kim , W. , and Renee Mauborgne. Blue Ocean Strategy. 1st ed. Boston, MA: Harvard Business
Press, 2005. Print.
Constellation Wines U.S. "The Six Key Premium Wine Consumer Segments." PerfSpot. PerfSpot, 2005.
Web. 25 Oct. 2011. <http://www.perfspot.com/docs/doc.asp?id=83008>.
Dr. Vino. (2011, October 6). Wine politics: Oregon Congressman supports HR 1161 & more! Retrieved
October 23, 2011, from Dr. Vino Website: http://www.drvino.com/2011/10/06/kurt-schrader-stevegrossman/
Folwell, Raymond J., and Mark A. Castaldi. "Bulk Winery Investment And Operating Costs." Docstoc –
Documents, Templates, Forms, Ebooks, Papers & Presentations. Agricultural Research Center, 2004.
Web. 23 Oct. 2011. <http://www.docstoc.com/docs/46716795/Bulk-Winery-Investment-And-OperatingCosts>.
"Green Living-US." Mintel. Mintel Group Ltd., Feb. 2010. Web. 25 Oct. 2011. http://0academic.mintel.com.clark.up.edu/sinatra/oxygen_academic/search_results/show
Lal, Garima G. "The Recession Re-Shapes Wine Purchase and Drinking Behavior." Wine (2010). University
of Portland Patron Authentication. Mintel, Oct. 2010. Web. 23 Oct. 2011. <http://0go.galegroup.com.clark.up.edu/ps/retrieve.do?sgHitCountType=None>.
McMillan, Rob. 2011-2012 State of the Wine Industry. Santa Clara California: Silicon Valley Bank-Wine
Division, 2011. Document.
Mergent Online. (2011). Specfic Industry Reports and Financials on WVV, Constellation, Castle, and
Beam, Inc. (2011).Retrieved October 15th, 2011, from Mergent Online database.
"Number of California Wineries." The Wine Institute. Wine Institute, 19 Apr. 2011. Web. 25 Oct. 2011.
<http://www.wineinstitute.org/resources/statistics/article124>.
"Oregon Brewers Guild » Facts." Oregon Brewers Guild. 2007. Web. 23 Oct. 2011.
<http://oregonbeer.org/facts/>.
Pyle, Blake, et al. "Comparing Millennial Wine Consumers’ Attitudes toward Wine Closures with the
Attitude of Non-Millennial Wine Consumers: A Case Study." Case Study. 2011. Document.
Tims, D. (2010, February 19). Visionary drives Willamette Valley Vineyards. Retrieved October 23, 2011,
from Oregonlive.com:
http://www.oregonlive.com/business/index.ssf/2010/02/visionary_drives_willamette_va.html
"SIC 2084 Wines, Brandy, and Brandy Spirits." Encyclopedia of American Industries. Ed. Lynn M. Pearce.
4th ed. Vol. 1: Manufacturing Industries. Detroit: Gale, 2005. 101-109. Gale Virtual Reference Library.
Web. 23 Oct. 2011.
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Tims, Dana. "Visionary Drives Willamette Valley Vineyards | OregonLive.com." Oregon Local News,
Breaking News, Sports & Weather - OregonLive.com. The Oregonian, 19 Feb. 2010. Web. 23 Oct. 2011.
<http://www.oregonlive.com/business/index.ssf/2010/02/visionary_drives_willamette_va.html>.
Willamette Valley Vineyards. (2011). About Us: Willamette Valley Vineyards. Retrieved October 23,
2011, from Willamette Valley Vineyards: http://wvv.com/about/our_story/
"Wine Consumption In The U.S." The Wine Institute. Wine Institute, 19 Apr. 2011. Web. 25 Oct. 2011.
<http://www.wineinstitute.org/resources/statistics/article86>.
"Wine-US." Mintel. Mintel Group Ltd., Oct. 2010. Web. 25 Oct. 2011. <http://0academic.mintel.com.clark.up.edu/sinatra/oxygen_academic/my_reports/display/id=482949&anchor=a
tom/display/id=552087?select_section=552084>.
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Appendices
Appendix A
Appendix B
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Appendix C
Appendix D- Financial Charts and Graphs
Figure D.1- Percentae Change in Sales from 2008-2011
0.15
0.1
0.05
0
2008
2009
2010
2011
-0.05
-0.1
-0.15
-0.2
Constellation Brands Inc.
-0.25
Beam, Inc.
Willamette Valley Vineyards
-0.3
Castle Brands
BUS 400 DAKZR20
Figure D 4.2- Percentage Change in Net Income from 2008-2011
6
5
4
3
2
1
0
2008
2009
2010
2011
-1
-2
Constellation Brands Inc.
-3
Beam, Inc.
Willamette Valley Vineyards
-4
Castle Brands
Figure D 4.3- Net Income/Net Sales for 2007-2011
0.15
0.1
0.05
0
2007
2008
2009
2010
2011
-0.05
-0.1
Constellation Brands Inc.
Beam, Inc.
-0.15
BUS 400 DAKZR21
Figure D 4.4 – Debt Ratio Analysis
Willamette Valley Vineyards
Liquidity Ratios
Current Ratio
Net Current Assets % TA
Debt Management
LT Debt to Equity
Total Debt to Equity
12/31/2010
12/31/2009
12/31/2008
12/31/2007
12/31/2006
5.98
52.61
4.98
50.92
4.23
46.47
5.94
53.32
4.29
49.44
12/31/2010
12/31/2009
12/31/2008
12/31/2007
12/31/2006
0.18
0.21
0.22
0.25
0.15
0.18
0.07
0.09
0.11
0.13
12/31/2010
12/31/2009
12/31/2008
12/31/2007
12/31/2006
0.84
2.06
17.64
0.9
2.65
19.47
0.85
2.91
18.84
0.54
1.81
12.09
0.46
1.56
9.64
12/31/2010
12/31/2009
12/31/2008
12/31/2007
12/31/2006
0.64
0.75
0.87
0.88
1
1.01
0.69
0.77
1.06
1.23
03/31/2011
03/31/2010
03/31/2009
03/31/2008
03/31/2007
2.8
36.78
3.02
36.57
1.88
3.05
43.41
2.23
3.8
39.77
1.55
2.97
31.33
03/31/2011
03/31/2010
03/31/2009
03/31/2008
03/31/2007
0.36
0.38
0.02
0.04
0.01
0.02
1.26
1.27
0.78
0.8
02/28/2011
02/28/2010
02/28/2009
02/29/2008
02/28/2007
0.63
3.14
19.81
0.4
1.89
15.03
0.4
1.91
15.03
0.43
1.86
14.73
0.57
1.9
15.17
02/28/2011
02/28/2010
02/28/2009
02/29/2008
02/28/2007
1.23
1.27
1.27
1.49
2.08
2.32
1.68
1.9
1.09
1.22
BEAM, Inc.
Liquidity Ratios
Quick Ratio
Current Ratio
Net Current Assets % TA
Debt Management
LT Debt to Equity
Total Debt to Equity
Castle, Inc.
Liquidity Ratios
Quick Ratio
Current Ratio
Net Current Assets % TA
Debt Management
LT Debt to Equity
Total Debt to Equity
Constellation Brands
Liquidity Ratios
Quick Ratio
Current Ratio
Net Current Assets % TA
Debt Management
LT Debt to Equity
Total Debt to Equity
BUS 400 DAKZR22
As a student of the Dr. Robert B. Pamplin Jr. School of Business Administration I have read and
strive to uphold the University’s Code of Academic Integrity and promote ethical behavior. In doing
so, I pledge on my honor that I have not given, received, or used any unauthorized materials or
assistance on this examination or assignment. I further pledge that I have not engaged in cheating,
forgery, or plagiarism and I have cited all appropriate sources.
Student Signature: R. Ryan Key, Demi Wilkinson, Amanda Aplet, Kurt Berning, Zack Steinkamp