The Wine Institute

SAN FRANCISCO – Weathering through a worldwide recession, 2009 U.S. wine exports, 90 percent from California, slid 9.5 percent in value to an estimated $911.8 million in winery revenues. Volume shipments decreased 14.9 percent to 417.9 million liters or 46.4 million nine-liter cases.
      “The California wine industry was not immune to the global recession, but fared better than most wine producing countries. Fourth quarter sales were up nearly 16 percent compared to the same period in 2008, giving us reason to believe that 2010 will be a good year,” said Robert P. (Bobby) Koch, Wine Institute President and CEO.
      “In this economy, we’re pleased to see that consumers abroad are still enjoying wine. Consumption is not really down as much as foreign importers are buying conservatively to reduce their investment in any significant inventory,” said Linsey Gallagher, Wine Institute’s International Marketing Director.
      “California exports about 20 percent of its wine production, so exports are an important portion of the industry’s business to preserve. Our goal is to remain consistent in working with our federal government and international organizations to remove restrictive trade barriers as well as encourage key free trade agreements,” said Wine Institute’s International Trade Policy Director Joseph Rollo.
      Nearly 42 percent of U.S. wine exports are shipped to the European Union, accounting for $380 million of the revenues. Volume shipments to the European Union decreased 21 percent in 2009 compared to 2008. Sales by value also dropped 22 percent, due in part to the continuing strategy of producers exporting bulk wine for bottling overseas to save the transportation costs of shipping bottles and other packaging. The finished wines are then shipped to their final destinations in neighboring countries. The next top markets were: Canada, $242 million; Japan, $79 million; Hong Kong, $47 million; and China, $36 million.
      “2009 was a tough year in an already highly competitive UK wine market, with pressure on prices, reductions in stock holdings, and cutbacks in the number of wine offerings occurring in all sectors. Duty increases exacerbated the situation. But despite all challenges, California, because of its adaptability and pragmatism, held up well and maintained the number two slot,” said John McLaren, Wine Institute Trade Director for the United Kingdom. “The consumer’s affection for the Golden State and our wines and lifestyle imagery, along with the boom in sales of the rosé styles promising to continue throughout 2010, indicate that California will continue to enjoy its prominent position in this important market, and increase its presence on retailer shelves and restaurant lists.”
      “The 2009 year was challenging for California wines in Europe, but in comparison to some of our competitors, we did reasonably well, especially in new wine markets such as Poland and Russia. In Germany, our largest export market on the continent, imports of California wines increased by 2 percent, according to the German Statistics Office. The most impressive market was Norway, where a "U.S. Focus month" in all monopoly stores in January of 2009 resulted in an increase in sales of California wines over 2008 of 65 percent,” said Paul Molleman, Wine Institute’s Trade Director for Continental Europe.
      “California wines continue to perform well in the Canadian market,” according to Rick Slomka, Trade Director for Canada. “Although total U.S. exports to Canada including bulk were down, bottled sales increased by more than 7 percent through the various distribution channels last year.” Slomka attributed much of this growth to the strong trends in the Quebec market where U.S. wines sales increased by more than 23 percent during 2009. “Quebec consumers are discovering that new world wines, especially from California, are offering outstanding quality and value” stated Slomka. “Despite a soft wine market in Canada overall, California wine drinkers have been loyal during the past few years. The category continues to attract new consumers, as a result of more competitive pricing from more favorable exchange rates as well as exciting new products introduced to the market during the past year.”
      In 2009, the U.S. became the largest bulk wine exporter to Japan by overtaking Chile.  California wineries were shipping sizeable branded volume as bulk wine for packaging and bottling in Japan, to reduce import duty and economize on transportation/warehousing costs.  The U.S. bulk table wine export to Japan was up 42.0 percent by volume and up 34.4 percent by value in U.S. dollars, reported Wine Institute Trade Director in Japan, Ken-ichi Hori.
      “China and Hong Kong continued their resurgence in 2009 after year-upon-year gains, reflecting the growing popularity of California wine in mainland China’s rapidly developing market,” commented Eric Pope, Regional Director, Emerging Markets. “The China wine market is quickly expanding into second-tier metropolitan markets beyond the traditional wine hubs of Shanghai, Beijing and Guangzhou. For Hong Kong, the February 2008 wine tax repeal ushered in strong momentum in the local wine market which is still ongoing today, and wine is gaining in popularity in this developed and mature market. Because of its geographic location, a portion of the growth continues to be attributed to re-exports to mainland China.”
      Since 1985, Wine Institute has served as the administrator of the Market Access Program, an export promotion program managed by the USDA’s Foreign Agricultural Service. Currently, more than 150 California wineries participate in the Wine Institute’s International Program.

# # #

U.S. WINE EXPORTS 1994-2009

Source: Wine Institute using data from U.S. Dept. of Commerce, Trade Data & Analysis.
Statistics may not convert exactly due to rounding.



Source: Wine Institute using data from U.S. Dept. of Commerce, Trade Data & Analysis.

Source: U.S. Dept of Commerce, STAT-USA. Copyright: California Wine Export Program.
Preliminary numbers. History revised. Statistics may not convert exactly due to rounding.

*All totals include re-exported wines.

To convert liters to gallons, multiply liters by .26418

To convert liters to cases, divide liters by 9