US wine exports set new record in 2012 with strong growth in Canada and Asian markets

SAN FRANCISCO – New figures show U.S. wine exports grew for the third consecutive year in 2012, setting a record of $1.43 billion in revenue, the San Francisco-based Wine Institute said Thursday.

Ninety per cent of those exports were from California. Volume shipments reached 424.6 million litres or 112.2 million cases.

The European Union remained the top market for California wines, accounting for about 34 per cent of all sales. The state’s wineries also saw significant growth in Canada and Asia.

Sales in China reached $74 million in 2012, up 18 per cent from the previous year. South Korea, at $16 million, was up 26 per cent. And Vietnam, at $27 million, was up 22 per cent.

Exports to Mexico also grew for a second consecutive year, to $20 million, an amount that was double the 2009 figure.

In Canada, the second largest market for California wines, sales reached $434 million, up 14 per cent.

The increase came despite a highly competitive global market, significant trade barriers and a recovering economy, according to institute president Robert P. Koch.

The institute, which serves as the administrator of an export promotion program managed by the U.S. Department of Agriculture, promotes California wines through a video campaign, website and social media campaigns across the globe.

California winemakers say they’ve seen increased demand from overseas but still face some barriers to exporting wine.

“We’ve seen a big demand,” said David Gates, vice-president of vineyard operations at Ridge Vineyards in Cupertino. “And as demand has picked up, we pushed a little harder into the more developing markets, the biggest one being China.”

The winery exports 25 per cent of its production, Gates said. Its top export destinations are Canada, United Kingdom, Japan, Mexico and China.

As exports pick up, the main barrier for a smaller winery is production, Gates said. The company has to allocate its wine carefully in order to supply demand from the growing export market.

Another barrier is price, said Skylar Stuck, general manager at Halter Ranch in Paso Robles. Land and labour in places such as Chile or Australia are cheaper than in the Napa or the Sonoma valleys. Even French or Italian wines can cost less to make, he said. The result is that iconic California wines that have cache sell well at high prices, but less known wineries have a harder time competing.