The Wine Institute

SAN FRANCISCO – During the recessionary 2009 economy, California vintners shipped 467.7 million gallons (196.7 million cases) of California wine to the U.S. wine market in 2009, up a modest 0.2% compared to the previous year’s volume.  The estimated retail value of these sales was $17.9 billion, down 3% from 2008 as consumers traded down to lower-priced wines, according to wine industry consultants Gomberg, Fredrikson & Associates in Woodside.
      California wine shipments worldwide to all markets in the U.S. and abroad decreased 1.2% to 563.5 million gallons (237.0 million cases).
      “Although consumers were cautious in their spending last year, the underlying consumer trends in the U.S. have kept wine on the dinner table during this tough economy.  The baby boomer generation has enjoyed wine for decades and now millennial consumers, who grew up in families who served wine, are also showing an affinity for wine,” said Robert P. (Bobby) Koch, President and CEO of Wine Institute.  
      Wineries that were reliant on restaurant sales found that on-premise sales were off 6-9% as consumers dined more at home and business travel was curbed.  Some wineries diverted inventory to off-premise retail accounts and many placed new emphasis on direct-to-consumer sales with tasting room staff training, more wine club events, social media outreach, special offers and upgraded web site content, according to Gomberg-Fredrikson.  Fourth quarter results were encouraging with shipments from several coastal warehouses reporting improved sales.  Less expensive wines (priced up to $7 for a 750 ml) accounted for much of the growth in 2009.
U.S. Economy Wines Increase in Food Stores
      Wine sales from all production sources in U.S. food stores grew in volume 2% in 2009 according to The Nielsen Company, a global provider of media and consumer information and analytics. All the growth was with American wines, while foreign wine volume was flat.
      Wines, priced up to $7 per 750 ml. bottle, were the most popular in U.S. food stores by volume, increasing 2% and accounting for 72% of the sales quantity.  Higher priced wines also grew in volume: $7-$10 wines were up 3%; $10-$14, up 7%; and $14 and over wines increased 2% by volume.
      Chardonnay shipments were up 4% with 22% volume share in supermarkets for varietal wines, followed by Cabernet Sauvignon, 12% share, up 7%; Merlot, 11% share, up 1%; and White Zinfandel, 8% share, down 3%.  Together these four varietals held a 53% market share of the volume.
Retail Value Down 4%, but Volume Grows 2% in the U.S.
      Wine sales to the U.S. from all production sources—California, other states and foreign producers—grew 2% to 767.4 million gallons (322.8 million cases) in 2009, according to Gomberg-Fredrikson.  Estimated retail value fell 4% to $28.7 billion.  Table wine volume accounted for 670 million gallons, dessert wine 64 million gallons, and sparkling/champagne 33 million gallons.  The 467.7 million gallons of California wine shipped to the U.S. represented a 61% share of the U.S. wine market.
Sparkling Wine/Champagne
      Similar to table wine trends, sparkling wine and champagne grew in volume because of gains in value-priced offerings. The category’s 33 million gallons were a 3% increase from the previous year and represent 4.3% of all wine sales in the U.S. California sparkling wine and champagne jumped 8% to hold a 60% volume share of the U.S. market, while sales of foreign products were flat.
Exports Decrease to Europe, Rise in Asia
      Under the difficult conditions of the worldwide recession, 2009 U.S. wine exports, 90 percent from California, slid 9.5 percent in value to an estimated $912 million in winery revenues.  Volume shipments decreased 14.9 percent to 110.4 million gallons or 46.4 million nine-liter cases, according to U.S. Department of Commerce data. 
      Shipments to the European Union decreased 22 percent to $380 million in winery revenues in 2009 compared to 2008, 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.  After the European Union, the top markets were: Canada, $242 million, -7%; Japan, $79 million, +28%; Hong Kong, $47 million, +84%; and China, $36 million, +64%.

California Winery Shipments¹
(In millions of gallons)

¹Includes table, champagne/sparkling, dessert, vermouth, other special natural, sake and others.
Excludes foreign bulk shipped by California wineries.  Source: Gomberg-Fredrikson & Associates and Wine Institute.
To convert gallons to cases, divide gallons by 2.3775

           

TABLE WINE VOLUME SHARE BY COLOR
In U.S. Supermarkets

Source: Based on U.S. supermarket data from The Nielsen Company.

WINE SALES IN THE U.S.—1991 to 2009 in millions of gallons

(Wine shipments from California, other states and foreign producers entering U.S. distribution)

Sources: Volume—Wine Institute, Department of Commerce, Estimates by Gomberg, Fredrikson & Associates.  Preliminary.  Totals may not add up exactly due to rounding.  Excludes exports.  To convert gallons to cases, divide gallons by 2.3775 1Includes all still wines not over 14 percent alcohol; excludes Canadian malt coolers. 2Includes all still wines over 14 percent alcohol and sake.