Lower yields and higher quality grapes push prices up

By TIM HEARDEN

Capital Press

U.S. wine exports -- 90 percent of which come from California -- set a record for winery revenue in 2011, totaling $1.39 billion, according to the San Francisco-based Wine Institute.

The revenue mark was an increase of 21.7 percent compared to 2010 as volume shipments were up nearly 6 percent to 117.7 million gallons, the institute reported.

"Our success in removing trade barriers and opening new markets as well as significant marketing investments by our wineries will allow us to reach our goal of $2 billion in exports by 2020," institute president and CEO Robert Koch said in a statement.

The brisk pace of exports came as late freezes and untimely rain impacted last year's California winegrape harvest, which was down 7 percent from 2010 to 3.3 million tons, according to a USDA report.

While yields were down, many winemakers were pleased with the quality of the harvest, Wine Institute spokeswoman Gladys Horiuchi said.

"It's always a heartbreak to get lower yields, but people tend to be happy with the quality they were seeing," she said. "You always have to wait and see what you get. These are wines that still haven't been released."

The reduced supply is combining with higher export demand to push prices up. Napa County recorded the highest prices for grapes with an average of $3,400 per ton, up 5 percent from the previous year. Sonoma and Marin counties received the second highest return of $2,081, up 3 percent from 2010, the USDA reported.

According to the institute, which markets American wines overseas, 34 percent of U.S. Wine exports by value were shipped to the 27-nation European Union.

The shipments accounted for $478 million in revenues, a 10 percent jump from 2010. In all, 28 million cases of American wine were shipped there in 2011, up 1.4 percent from the previous year.

Other top destinations included Canada ($379 million in shipments in 2011, up 23 percent from 2010); Hong Kong ($163 million, up 39 percent), Japan ($105 million, up 39 percent); and China ($62 million, up 42 percent), according to an institute news release.

"California has this reputation for sustainability and high quality that consumers seem to be looking for," Horiuchi said.

Exports account for about 20 percent of production in California, she said.

Online

The Wine Institute: www.wineinstitute.org

California Grape Crush Report, Preliminary: www.nass.usda.gov/Statistics_by_State/California/Publications/Grape_Crush/index.asp

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