U.S. wine exports, 95 percent of them from California, surged to nearly $800 million last year

February 18, 2005

Wine exports surge to $800M

U.S. wine exports, 95 percent of them from California, surged to nearly $800 million last year, according to preliminary U.S. Department of Commerce data.

The San Francisco-based Wine Institute announced Friday that overall U.S. wine exports rose to $794 million based on 2004 revenue to wineries, a 28 percent jump over the comparable 2003 figure of $621 million. The value of the increased export volume -- $173 million -- was by far the largest yearly increase ever, according to Wine Institute officials. By volume, exports increased 29 percent to 119 million gallons (or 450 million liters).

The report did not break down the source of exported wines by geography, but winegrapes are a major agricultural product in parts of Greater Sacramento and Lodi, El Dorado County and Amador County are among the local areas with wineries.

"More than 60 percent of California wine exports are to the EU (European Union), despite the fact that our vintners face significant trade barriers, including high tariffs and a heavily subsidized EU wine industry," Robert Koch, the Wine Institute's president and CEO, said in a statement. "We are hopeful that the ongoing bilateral wine trade negotiations with the EU and the next round of World Trade Organization negotiations will lower those barriers."

Officials said the weaker U.S. dollar has made California wines more competitive in the world export market, but wine industry leaders said that's not the only factor.

"Wineries are now reaping the benefits of their hard work and marketing efforts of the last few years and establishing brands in major markets," said Joseph Rollo, the Wine Institute's international director.

The top market for California wine is the United Kingdom, where wines from the Golden State made a 20 percent leap in volume last year, to 38 million gallons, and a 41 percent jump in sales revenue, to $299.1 million. Nearly 1 in every 7 bottles of wine sold in the United Kingdom comes from California, the Wine Institute reported.

Other leading export markets for California wine include:

Canada, $123.8 million
Netherlands, $85.6 million
Japan, $82.1 million
Germany, $26.8 million
Mexico, $14.5 million
Switzerland and Denmark, $14 million each
Ireland, $13.9 million
Belgium/Luxembourg, $13.4 million.

The Wine Institute has managed the California wine export program since 1985, and runs promotional efforts in more than 20 countries. U.S. wine exports have shot up from $37 million in 1986 to $794 million last year.