Environmental and Entrepreneurial Resilience of Large and Small Wine Businesses
July 31, 2019
Rohnert Park, Calif.—The Wine Business Institute in the School of Business and Economics at Sonoma State University today announced new research findings from a study on the influence of environmental factors on entrepreneurial thinking in wine businesses of different sizes and age. Results indicate that larger, older wineries are more likely to respond to environmental and economic shifts quickly and entrepreneurially compared to smaller, younger firms. However, regardless of age, size, and strategy, both types of firms share concerns for the environmental, legal, and ecological challenges, with the top three being economic cycles, laws and regulations, and climate change. The research paper titled “Environmental Perceptions on Entrepreneurial Thinking in the Wine Industry,” co-authored by Dr. Armand Gilinsky, Korbel Professor of Wine Business, Dr. Robert Eyler, professor of Economics, and Dr. Sandra Newton, professor of business, and was recently accepted for publication in the Small Enterprise Research journal and is available to the public here: https://doi.org/10.1080/13215906.2019.1570319.
Consistent with emerging research, the study further confirms that the wine industry shifts from market concerns to macro-economic concerns because of the maturity of the sector.
“The market to macro-economic shift is evident when we look at recent events, such as the North Coast fires, the California drought, and changes to immigration policies," said Dr. Armand Gilinsky. "Firms’ entrepreneurial behavior or ability to respond to changing regulatory, economic, geopolitical, and other environmental conditions before competitors will affect overall performance.”
Furthermore, when faced with environmental and economic challenges, the top three management strategies wine businesses employed were to change training and skills, systems for management control and procedures, and management style. Among the top business skills leaders needed to develop to stay competitive were entrepreneurial thinking, marketing, and strategic planning.
“A key component to leadership and execution success lies in the understanding of agricultural and business environments. While smaller wineries tend to focus on marketing to compete with established firms, this study suggests that small firms can also benefit from focusing on entrepreneurial thinking in this mature industry,” said Dr. Sandra Newton.
Research findings were based on a survey of 338 respondents out of a sample of 11,784 wine businesses – 58 percent were small producers, less than 20,000 cases, and 56 percent were newer wineries with less than 20 years in business. Eighty-nine percent of respondents were privately-held wineries, nine percent were publicly-held, and two percent were co-operative wineries.