California powers record year for U.S. wine exports
February 15, 2017
United States wine exports generated a record $1.62 billion in revenue for wineries in 2016. Ninety of the country’s wine exports came from California, according to the Wine Institute, a California wine industry advocacy group.
The value of American wine exports reached a record high in 2016, even though the dollar was strong and the volume of exports decreased by more than 10 percent. That is due in large part toward the trend of “premiumization” — something California vintners are cashing in on, according to the Wine Institute.
“California wine exports continue to reflect the trend toward premiumization with the dollar of our wine sales outpacing volume shipments. California wines are well positioned for this trend — our vintners are offering quality, value, diverse styles and environmental stewardship in their winemaking. Combined with the state’s iconic lifestyle, innovative cuisine and beautiful destinations, California wines continue to gain attention from consumers worldwide,” Wine Institute President and CEO Robert P. Koch said.
Last year, the United States exported 49.5 million case of wine. The top market for California wine was the European Union, which accounted for $685 million in sales. Canada, which accounted for $431 million in sales, was the individual country that purchased the most California wine.
California wine exports have increased in value by 78 percent over the last decade despite heavily subsidized foreign competitors and high tariffs, according to the Wine Institute. Exporter also face non-tariff barriers, such as a regulation in the Canadian province of British Columbia that mandates grocery stores only sell locally produce wines.
The Wine Institute is an advocate for free trade deals, such as the canceled Trans-Pacific Partnership (TPP) and the North American Free Trade Agreement. President Donald Trump halted the TPP before it was fully ratified, and he has vowed to tear up or renegotiate NAFTA.
Trump has also threatened a 20 percent tax on Mexican imports, which if enacted, could trigger retaliatory measures. Mexico has risen to the fifth largest export market for California wine, accounting for $24 million in sales.