SAN FRANCISCO — U.S. wine exports, 95% of which are from California, totaled $876 million and 404.5 million liters in 2006, an increase of 30% in value and 4% in volume compared to 2005, according to the Wine Institute International Department.
In Europe, where the U.S. ships more than half of its sales abroad, exports surged 48% in value. Wine exports to Canada grew 29% by value.
“The growth is impressive, considering the trade barriers that California wineries face in markets worldwide, such as protectionist tariffs, distribution restrictions and competition from foreign producers who receive production subsidies from their governments,” said Joseph Rollo, Wine Institute director, in a statement.
The new U.S./European Union wine agreement gives California wineries assurance that the E.U. market will remain open to California wines and that trade requirements will be consistent, providing producers in both markets a stable environment for trade, according to the Wine Institute.
According to United Kingdom retail statistics, U.S. wines grew by value 8% off-premise and 18% by value in on-premise accounts. The growth in volume at off-premise was greater than any other major country of origin and led to a 16% market share, compared to France at 16.4%. Australia leads at 22.3% in market share volume, but grew only 4.2% in 2006.
“California wineries are producing wines that suit the international palate and are leaders in the rosé category, a growing segment in Europe that has become a year-round drink,” said John McLaren, the Wine Institute's U.K. director, in a statement.
California exports to Europe have grown steadily as wineries have adjusted to the challenge of an increasingly price-sensitive consumer. Many California wineries now ship finished wines to Europe for bottling and distribution in other E.U. member states in order to reduce the freight costs of shipping bottles. Exports to Canada are once again in a growth mode.
Hurt by the strong dollar several years ago and the emphasis on other New World wines, California was challenged to maintain its market share. Steady growth in 2005, plus a 29% increase in terms of value in 2006, demonstrates that the California segment is strong.
“The liquor boards across Canada are again looking to California for exciting new brands and adding premium wines to their specialty portfolio,” said Rick Slomka, Wine Institute's Canada director, in a statement.
Other major growth markets outside of Europe and Canada include China, up 53% by value; Singapore, 68%; and Hong Kong, 19%.
“China's increased growth rate is significant because of the market's huge potential — the country's economic growth and the number of consumers who can afford imported wine continue to grow,” said Eric Pope, Wine Institute's manager of International Winery Programs, in a statement. “In addition, Hong Kong has again become a growth market and should continue to increase now that the import tariff of 80% has been cut in half.”