With less money in their pockets, international wine drinkers turn increasingly to imported U.S. wines. As a result, the U.S. wine industry remains one of the few sectors seemingly immune to the economic crisis.
Last year the U.S. shipped nearly 130 million gallons of wine overseas, an 8 percent volume increase compared with the previous year.
Wine export revenue has steadily increased over the past 15 years, reaching an all-time high of over $1 billion in 2008 – more than five times the exports recorded in 1994, according to data from the San Francisco-based Wine Institute.
Wine Institute officials have sought to increase U.S. wine exports by collaborating with the U.S. government and international organizations.
Their goal is to lessen the impact of the 2006 E.U.-U.S. Wine Trade agreement by minimizing international trade barriers such as high tariffs and production subsidies established by the accord.
California, which accounts for 90 percent of U.S. wine exports and produces nearly 100 grape varietals, is the place to do it.
As the world’s fourth leading wine producer, California is geared to garner more than its current 6 percent share of the world export market, said Wine Institute International Marketing Director Linsey Gallagher.
But increasing exports may not be as easy as simply increasing the supply.
While determined partially by the cyclical supply and demand of the grape growing industry, wine prices and exports are also linked to currency values, said associate professor of viticulture and enology James T. Lapsley, who specializes in the history and economics of wine.
“As the exchange rate for the dollar became weaker, our goods became less expensive abroad,” Lapsley said, referring to last year’s exports.
Since the value of the Euro peaked at $1.60 last July, low prices of imported U.S. wine abroad were very enticing. Last year the European Union alone accounted for nearly half of U.S. wine exports, or $486 million.
The value of the Euro was $1.26 as of Tuesday.
When considering the 8 percent volume increase along with the 6 percent value increase in total exports, the Wine Institute’s data points to a decline in the overall value of exports, Lapsley said.
“This tells us that there is more of it, but less expensive wine being exported,” he said.
A current trend in U.S. wine exports is to ship less expensive wines in bulk containers, which reduces carbon footprint and saves on bottling and shipment costs.
“It’s a good thing in general,” Lapsley said of the increased wine exports, but future exports will likely remain subject to currency changes and trade regulations.
AARON BRUNER can be reached at firstname.lastname@example.org.