US: Wine exports hit near record levels

Mar 2, 2015

(VTD) - Despite a pair of significant challenges, U.S. wine exports in 2014 hit near-record levels in volume and dollar value — important benchmarks since 90 percent of all exports come from California, according to the San Francisco-based Wine Institute.

Exports reached $1.49 billion in 2014, the second highest dollar value for U.S. wine exports and a 64 percent increase from five years ago, which translates into 49.2 million cases shipped to ports far and wide.

Both value and volume could have easily set records if not for a strong dollar and the West Coast port slowdown that began last July. When the dollar rises against the currency of the importing country, it costs more to import U.S. products.

Of the top 10 export markets for California wines, the European Union's 28-member countries were the largest accounting for $518 million; followed by Canada, $487 million; Japan, $88 million; China, $71 million; Hong Kong, $69 million; Mexico, $24 million; South Korea, $22.2 million; Nigeria, $21.9 million; Vietnam, $20 million; and Singapore, $16 million.

Robert Koch, president and chief executive officer of the Wine Institute, said the prestige associated with California wines is one of the reasons for increased exports.

"With three back-to-back California vintages (2012, 2013 and 2014) heralded for their high quality and size, we have the ability to meet consumer demand for our wines both in the U.S. and abroad," Koch said. "Despite our strong dollar and heavily subsidized foreign competition and their high tariffs, consumers worldwide are attracted to all things California — our iconic lifestyle, scenic landscapes, great wine and food, and emphasis on environmental stewardship."

Wine grapes are important sources of revenue for both the San Joaquin and the Salinas Valley, posting a 2013 gross revenue totals of $65 million and $227 million, respectively, according to Tulare and Monterey County's crop report. Data for 2014 will be released in the spring.

Experts attribute the marked growth from 2012 to 2014 as part skill, part luck. Jeff Bitter, vice president of Allied Grape Growers, a 600-member wine grape growing cooperative based in Fresno, said the quality of the grape is defined by the weather throughout the growing season, and Mother Nature has been cooperative during the export growth spurt.

"Growers can control some of the elements, like irrigation management, but the majority comes from Mother Nature," Bitter said. "It's a throw of the dice, and while there is some skill in the throwing, it's still rolling the dice."

On the other side of the Gabilan Mountains, Amanda West Reade with the Monterey County Vintners & Growers Association also pointed to Mother Nature for the successful streak and the international demand.

"Our Central Coast weather pattern really does impact grape growing and the final outcome of harvest," West Reade said in an earlier interview with The Californian. "Mother Nature presented us with ideal growing conditions in 2013 — a warm early spring, followed by a rather mild summer weather.

"We've had more ideal growing days this year than any in this decade," she added.

Both Bitter and West Reade said the quality of the wine is being accepted well by the consuming public. Linsey Gallagher, vice president of international marketing for the Wine Institute, said much of that acceptance has come from marketing efforts by individual vintners and the institute. Branding campaigns have now penetrated 25 countries with 15 representative offices around the world.

"We introduced several new tools this year, including the translation of our consumer website (discovercaliforniawines.com) into eight languages," Gallagher said.

Social media campaigns are also live in 16 countries, using sites such as Facebook, Twitter and Weibo. The institute has also partnered with the nonprofit Visit California — formerly the California Travel & Tourism Commission.

Politics is also an issue affecting wine exports. Tom LaFaille, international trade counsel for the Wine Institute, said he is working with Congress and the Obama administration to remove trade barriers. Among the barriers are tariffs — consider them import taxes other countries place on U.S. goods — that are being addressed in the proposed Trans-Pacific Partnership negotiations.


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