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A look at California exports – wine – Statistical Data Included

A look at California exports – wine – Statistical Data Included – Brief Article

Exports remain a strong point for California wines, with the market in 2000 growing at a faster pace than the national market. Overall, wine sales to all markets were virtually flat, growing by only 0.4%, compared to a 3% gain for exports. If you factor out exports, California wine sales were actually down by 1%.

(Worth noting is the fact that 90% of exports are from California. Not so very long ago, exports were all from California. The Pacific Northwest and New York have made strong gains on a small base in the past five years.)

At any rate, 79 million gallons of U.S. wine were exported in 2000, at a value of $560 million. Continuing a long-term trend, wine exports from the United States have increased dramatically over the last 14 years, growing 16-fold from 1986’s $35 million.

A 3% gain may not seem like much, but when the state of the Asian economy and the strong dollar are taken into account, it’s a respectable number, as Joseph Rollo, Wine Institute international director, pointed out. Also, competition from Chile and Australia is becoming very tough, especially in the top U.S. market, the United Kingdom.

“The U.S. holds only a 4% share of the world export market. The potential is there for greater sales for California wine, a prospect we vigorously intend to pursue,” said John De Luca, Wine Institute president and CEO.

De Luca explained that the Institute is dedicated to reducing international trade barriers for California wine. Initiatives are ongoing with New World wine producing countries and with the European Union. The approximately 150 California wineries that export to 165 countries face a host of protectionist measures, such as high tariffs, distribution restrictions and foreign wine production subsidies.

De Luca recognized the potential for exports in the early 1980s, when Wine Institute championed passage of the Wine Equity and Expansion Act (WEA). Passed by the U.S. Congress in 1985, the WEA marked official U.S. government recognition of the significant trade barriers faced by U.S. wine producers in foreign markets throughout the world and confidence that American wines could contribute to the overall growth of U.S. exports. This recognition set the stage for a concerted effort by Wine Institute and its member wineries to develop foreign markets for California wine.

The WEA for the first time positioned American wine as a significant item of trade for the U.S. government.

Last year, the UK was again the top U.S. wine export market, with $144 million in revenues to U.S. wineries. Canada accounted for $105 million; Netherlands, $77 million; Japan, $69 million; Switzerland, $24 million; Federal Republic of Germany, $15 million; Belgium, $14 million; Denmark, $13 million; Ireland, $12 million; and Sweden, $8 million.

International buyers preferred packaged California wine brands, which grew 3% to $449 million and accounted for 80% of sales. Exported bulk wine declined 22% to $34 million; champagne and sparkling wine totaled $28 million; dessert wine, $24 million; and grape must and other fermented beverage exports, $25 million.

“California wine is firmly established as a major presence in the United Kingdom’s wine scene,” said John McLaren, Wine Institute’s trade director in the UK. “Continual attendance at important trade shows, along with stepped up retailer promotions and more coverage in key wine trade publications, have all supported the 7% increase in California wine sales in the UK last year despite stiff competition.

“In Europe, interest in California wine continues to be strong, but the dollar has slowed volume increases. Where it was 20% to 30% growth in previous years, it was an average of 2% to 3% last year, some countries better than others,” said Paul Molleman, Wine Institute’s trade director in Europe. “California wineries, however, still came out in record force at major trade shows, such as Prowein in Germany, for they recognize that the sales potential in Europe is enormous.”

In Asia, Daniel Chan, Institute trade director for Hong Kong/China, observed that “the industry is committed to exploring realistic opportunities in China as well. Tariff reductions will have to wait for the country’s entry into the World Trade Organization, which would help open China’s distribution systems and provide more market access.”

In keeping with a drive to increase exports, a record 128 California wine brands were present at VINEXPO last month.

California vintners once again created a full-scale, world-class restaurant at VINEXPO: the California Grill. California wineries used the grill to host important clients and show them California cuisine and California wines while conducting major business.

U.S. Wine Exports, 1986–2000

VOLUME VALUE

(IN MILLIONS) (MILLIONS OF DOLLARS)

YEAR GALLONS LITERS REVENUES TO WINERIES

2000 79.3 300.2 $560.4

1999 76.8 290.6 $560.3

1998 71.9 272.3 $537

1997 60.0 227.1 $425

1996 47.5 179.7 $326

1995 38.8 147.0 $241

1994 35.2 133.4 $196

1993 34.9 132.2 $182

1992 38.9 147.2 $181

1991 33.1 125.2 $153

1990 29.0 109.8 $137

1989 21.9 82.9 $ 98

1988 16.9 64.1 $ 85

1987 11.9 44.9 $ 61

1986 7.3 27.5 $ 35

Source: U.S. Dept. of Commerce, National Trade Data Bank. History

Revised. Copyright: Wine Institute.

Gallons/liters do not convert exactly due to rounding.

U.S. Wine Exports

In Millions of Dollars

1986 $35

1987 $61

1988 $85

1989 $98

1990 $137

1991 $153

1992 $181

1993 $182

1994 $196

1995 $241

1996 $326

1997 $425

1998 $537

1999 $560

2000 $560

Source: U.S. Dept. of Commerce, National Trade Data Bank, History

Revised. Copyright: Wine Institute.

Note: Table made from bar graph

COPYRIGHT 2001 Hiaring Company

COPYRIGHT 2001 Gale Group