California wine sales in US jump for sixth consecutive year to reach record value
Californian wine sales in the US grew for the sixth consecutive year to hit a record high of over $32bn in 2017, driven largely by premium wines according to the Wine Institute.
This represents a 3% increase on 2016, with the state shipping 241 million nine litre cases in the US, a 1% increase on the previous year.
“Consumers in the U.S. and worldwide continue to trade up to higher-priced premium wines,” confirmed Bobby Koch, Wine Institute President and CEO. “The quality, selection and commitment to sustainability make California wines well-positioned for growth.”
And in the past decade, Californian wine sales in the domestic market have jumped by 15% from 209 million cases in 2008 to 241 million cases in 2017, with most of last year’s growth coming from those wines priced above $10.
According to Jon Moramarco, founder and managing partner of BW166 and editor of the Gomberg-Fredrikson report, demographic trends are playing a significant role in wine sales. While per capita consumption has been stagnant over the last ten years, wine sales have grown in line with the legal drinking age population, which increased roughly 10% over the same time period.
Other trends which have been boosting sales include wineries focusing on tasting room and direct-to-consumer sales, which accounted for nearly $2.7 billion in retail value and 5.8 million cases in 2017.
Danny Brager, Senior Vice President of Nielsen’s Beverage Alcohol Practice Area pointed out that another factor boosting Californian wine is that selling locations in the US have increased by a fifth compared to a decade ago, with 565,0000 on and off licence premises now offering wine for sale.
And with such a diverse range of consumers, from millenials who have less disposable income than a generation ago, to baby boomers who are retiring and likely reducing their wine consumption, marketers need to find the right balance in attracting these different groups, he claimed Brager.
"E-commerce is increasingly having an impact on expanding consumer access to wine, and wineries are working on several digital platforms where wine is being sold,” he added.
The best selling varietals of Californian winein the US by volume are Chardonnay, Cabernet Sauvignon, Red Blends, Pinot Grigio/Gris, Pinot Noir, Sauvignon Blanc, Merlot, Moscato/Muscat, Rosé and White Zinfandel/Blush, according to Nielsen-measured U.S. off-premise sales.
Rosé continues to enjoy phenomenal growth with sales volume jumping 60% compared to the previous year. Total shipments of sparkling wine and champagne to the U.S. reached 26.3 million cases in 2017, up by 8% from the previous year, and accounting for 7% of the total US wine market. Meanwhile, wine shipments to the U.S. from all production sources — California, other states and foreign producers — grew 1% to 403.4 million cases in 2017, with an estimated retail value of $62.2 billion, up 2% from the previous year.
The U.S. has remained the world’s largest wine market by volume since 2010. California’s 241 million cases shipped within the U.S. in 2017 represent a 60% share of the U.S. wine market.
U.S. wine exports, of which more than 90% orginate from California, reached $1.53 billion in winery revenues in 2017. Volume shipments were 380 million liters or 42.2 million cases with the EU the top market for US exports, accounting $553 million; followed by Canada, $444 million; Hong Kong, $119 million; Japan, $94 million; China, $79 million; South Korea, $25 million; Mexico, $23 million; Singapore, $17 million; and Philippines, $14 million.