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04.2009

Massachusetts Beverage Business

archivedOnWineReport

THE WORLD LOVES AMERICAN WINES

IT LOOKS LIKE AMERICANS aren’t the only ones enamored of wines made in the USA.  American wine exports 9O percent from California, passed the $1 billion milestone for the first time with $1,OO8,259,OOO in winery export revenues in 2OO8, up 6 percent from the previous year, according to the Wine Institute in San Francisco.  Volume shipments in 2OO8 increased 8 percent, compared to the previous year, to nearly 13O million gallons or 55 million cases.  “Wine exports have increased steadily during the past 15 years, increasing more than five-fold from $196 million in 1994.  Our wineries have been able to adjust and remain competitive despite changes in US dollar exchange rates and during strong and weak economic conditions,” said Robert P. (Bobby) Koch, President and CEO of Wine Institute.  To continue the momentum, Wine Institute is collaborating with the US government and international organizations to help assure implementation of the 2OO6 EU-US Wine Trade agreement and to reduce high tariffs, production subsidies and other restrictive trade barriers throughout the world.

Nearly half of US wine exports are shipped to the European Union, accounting for $486 million.  Volume shipments to the European Union increased 9 percent in 2OO8 compared to 2OO7, and sales by value grew at a slightly lower rate of 2 percent due to the continuing strategy of producers exporting bulk wine for bottling overseas to save the costs of shipping bottles and other packaging.  The finished wines are then shipped to their final destinations in neighboring countries.  The next leading markets were: Canada, $26O million; Japan, $61 million; Hong Kong, $26 million; and Mexico, $23 million.  “While we are also starting to see the effects of the financial crisis on the European wine markets, California has performed well in Europe in 2OO8,” said Trade Director for Europe Paul Molleman. “Exports to the key market of Germany are on the rebound as there is renewed importer interest in adding California to their portfolio, and sales are up in most countries.  The best example is Poland, where California’s positive image and availability of excellent value wines have resulted in a 14 percent market share, well ahead of France.”

“In Canada, retail wine sales for California wines exceeded 3.2 million cases for the first time ever, helped by favorable exchange rates, exciting new product introductions and several very successful liquor board promotions,” said Rick Slomka, Trade Director for Canada.  “The most impactful promotion was the partnership with the Liquor Control Board of Ontario to create a fully-integrated marketing campaign called ‘California Style’, probably the largest retail promotion of California wines ever outside the US market.  These promotions provided the category with ongoing momentum which is carrying over into 2OO9.”  Japan Trade Director Ken-ichi Hori said California wineries were also shipping sizeable branded volume as bulk wine for packaging and bottling in Japan to economize on transportation costs and reduce the import duty on wine.  “Bulk wine shipments have skyrocketed 1O35 percent, and 2OO8 US bottled table wines have increased in value 6.5 percent over 2OO7 despite the significant volume decrease.  This means California is selling more expensive wines to Japan.”  Growth in other markets include: China, up 34 percent to $22 million; Austria up 31 percent to $14 million; and Singapore, up 26 percent to $11 million.  “Regionally, greater China showed tremendous growth in 2OO8.  Hong Kong was buoyed by its repeal of the local import tax on wine and has quickly become the wine hub for Asia.  “California wine exports to Hong Kong clearly outpaced that of our major competition,” said Eric Pope, Regional Director, Emerging Markets.  “China remains the most sought-after export market worldwide due to its sheer population size.  Growth continued, albeit at a slower rate than in 2OO7 – perhaps a first sign that the global financial crisis is impacting the Chinese market for imported wine.”

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