Region-wide upturn predicted for 2010, industry reps say
By JULIA HOLLISTER
For the Capital Press
The value of the nation's wine exports tumbled last year 9.5 percent to $911.8 million, according to a report just released by the Wine Institute.
Despite the overall dip, Washington state was a bright spot in the report, with gains in domestic and export sales. California and Oregon wine revenues slipped.
"Overall, total domestic revenues of Washington wine grew by 9.1 percent in 2009," said Washington Wine Commission spokesman Ryan Pennington.
Generally speaking, Washington wines are delivering a very high value across all price points, which could explain the increase, he said.
About 1.5 percent of Washington's total production -- roughly 125,000 cases -- is exported. The state's exports were up slightly last year.
Exports appear to be rebounding, though. California's fourth quarter sales were up nearly 16 percent compared to the same period in 2008.
"This increase gives us reason to believe that 2010 will be a good year," said Robert Koch, Wine Institute president and CEO. "The California wine industry was not immune to the global recession but fared better than most wine-producing countries."
California has 300 wineries that export. An increasing number of mid-price brands have begun exporting as well. About 90 percent of all U.S. exports are from California.
The Wine Institute's international trade policy director, Joseph Rollo, said California exports about 20 percent of its wine production, making it an important portion of the industry's business.
The European Union is the biggest wine export market -- nearly 42 percent -- and accounts for $380 million of the revenues. Volume shipments and sales by volume both dropped in 2009 compared with the previous year. The next largest markets for U.S. wine were Canada, $242 million; Japan, $79 million; Hong Kong, $47 million; and China, $36 million.
According to the Oregon Wine Board, the state exports most of its wine to Canada, followed by Japan, South Seas and United Kingdom.
Export sales for Oregon wine in 2009 slipped to 35,664 cases from 51,647 cases in 2008.
Total U.S. wine sales for 2009 totaled 1,660,202 cases, down from 1,748,282 cases in 2008.
"California wines continue to perform well in the Canadian market, too," said Rick Slomka, trade director for Canada.
The top market for Washington wine is Canada, followed by Japan, the United Kingdom, Germany and South Korea.
The Far East market continues to expand. The Wine Institute reported the United States became the largest bulk wine exporter to Japan, overtaking Chile. U.S. exports were up 42.0 percent in volume.
U.S. wineries have followed a trend of exporting bulk wine for bottling overseas.
"This has been going on for the last two or three years, and there are good reasons to ship in bulk," Rollo said. "First, it saves money by not shipping glass and the technology of shipping bulk has improved so that brand owners are comfortable with the quality and of the wine when it arrives on the 'other side'."
Bulk wine is shipped in a specially designed bladder to keep the product fresh.