2005 California Wine Sales Continue Growth As Wine Enters Mainstream U.S. Lifestyle
- By CWF Sources
- Published 04/6/2006
- News
SAN FRANCISCO – California wine sales in the U.S. reached another record high of 441 million gallons (185.4 million nine-liter cases) in 2005 with a retail value of $16.5 billion, according to wine industry consultant Jon Fredrikson of Woodside and publisher of the Gomberg-Fredrikson Report. Total California winery shipments to all markets both in the U.S. and abroad reached 532 million gallons (223.9 nine-liter cases) last year.
The strong performance reflects the overall growth trend of wine demand in the U.S. and can be attributed to several developments.
“Wine has enjoyed the most positive image it has had in years from consumers, the media and government,” said Robert P. Koch, President and CEO of Wine Institute. “The May 2005 U.S. Supreme Court decision on direct-to-consumer sales not only benefited U.S. wineries, but had a favorable impact on public opinion and awareness of wine.”
Wine industry advisor Jon Fredrikson addresses
a morning audience at this January's
Unified Symposium in Sacramento.
Shortly after the ruling, a Gallup poll named wine as America’s most preferred alcohol beverage citing growth trends from several different demographic groups. The popularity of the hit movie “Sideways” continued to lift the public’s interest in wine, particularly in Pinot Noir from California.
“Production increases around the globe have resulted in scores of creative, value-oriented wines. The availability of more approachable, easy drinking “user-friendly” wines with memorable labels and affordable prices has made wine more interesting and attractive to greater numbers of American adults,” said Fredrikson.
U.S. wine consumption growth began a steady climb in 1991 after the CBS “60 Minutes” French Paradox broadcast and hundreds of other news media reported on the favorable health effects of moderate wine consumption. Since then, consumer demographic trends have continued to expand the U.S. wine market, with the adult population, aged 21 to 65, growing by 10.4 million since 2000. “Echo Boomers,” the adult children of the “Baby Boomer” generation that adopted wine in the 1960s and 1970s, are increasingly making wine more a part of their lifestyle.
“Wine consumption is gaining among all generational segments, led by Baby Boomers, with more interest not only by women, but men and nearly all ethnic groups and regions,” said Barbara Insel, Managing Director of Research at MKF Research in St. Helena. “Both retailers and restaurants are responding by expanding the quality and diversity of their offerings.”
California Table Wine Shipments by Price Segment
Premium wines, $7 and above, advanced 13 percent accounting for 35 percent of the case volume and 66 percent of winery sales revenues. Exciting brands, innovative packaging, critically-acclaimed California vintages and a good economy helped the strong growth of this price segment. Sales of everyday wines, priced up to $7, declined two percent, representing 65 percent of the volume and 34 percent of the revenues, according to Fredrikson.
The U.S. Market
Sales in the U.S. of wine from California, other states and foreign producers grew five percent in 2005 to an estimated 703 million gallons valued at $26 billion at retail. California wines represented a 63 percent share of the U.S. wine market or about two of every three bottles sold in the U.S. Of the total, table wine amounted to 619 million gallons; dessert wine was 53 million gallons; champagne and sparkling wine, 30 million gallons.
Wines in U.S. Supermarkets Continue Up Market Trend: Pinot Noir a Shooting Star
U.S. supermarket sales also reflected the growth of upscale wines, with wines priced $6 and above showing double-digit increases by volume, according to ACNielsen, which tracks laserscanning data from 3000 supermarkets across the country. For the second year in recent history, red wine edged out white as the top seller by volume in food stores, holding a 41.7 percent market share. White accounted for an estimated 41.0 percent share, while blush represented 17.4 percent share of volume. Still benefiting from the “Sideways” effect, Pinot Noir shipments experienced a dramatic 70 percent jump in food stores, compared to the previous year, though from a small base of two percent share by volume. Chardonnay remained the top-selling varietal wine, followed by Merlot, White Zinfandel and Cabernet Sauvignon. Together, these top four varietals totaled 53 percent of all table wine volume in food stores.
Champagne/Sparkling Wines Sales in U.S. Increased Two Percent
Total shipments to the U.S. from all production sources were 30.4 million gallons, up two percent, according to the Gomberg-Fredrikson Report. California champagne/sparkling wine holds a 60 percent share of this volume. The total champagne/sparkling wine category accounts for four percent of all wine sales in the U.S.
U.S. Wine Exports
Preliminary export numbers for 2005 declined 17 percent in value and 16 percent in volume, following spectacular growth in 2004 of 28 percent and 29 percent respectively, according to the U.S. Foreign Agricultural Service. The primary reason for the decrease involves a change in European sales. To save costs, some wineries are shipping their brands as bulk wine instead of bottled product. The bulk wine is then bottled abroad for distribution throughout Europe. The dollar’s two-year high against the Euro is also a contributing factor. U.S. wine exports, 95percent from California, totaled $658 million with 101 million gallons (384 million liters). Exports to Canada increased 16 percent in 2005 and Japan sales were steady following a significant increase in 2004.
The strong performance reflects the overall growth trend of wine demand in the U.S. and can be attributed to several developments.
“Wine has enjoyed the most positive image it has had in years from consumers, the media and government,” said Robert P. Koch, President and CEO of Wine Institute. “The May 2005 U.S. Supreme Court decision on direct-to-consumer sales not only benefited U.S. wineries, but had a favorable impact on public opinion and awareness of wine.”
Wine industry advisor Jon Fredrikson addresses
a morning audience at this January's
Unified Symposium in Sacramento.
Shortly after the ruling, a Gallup poll named wine as America’s most preferred alcohol beverage citing growth trends from several different demographic groups. The popularity of the hit movie “Sideways” continued to lift the public’s interest in wine, particularly in Pinot Noir from California.
“Production increases around the globe have resulted in scores of creative, value-oriented wines. The availability of more approachable, easy drinking “user-friendly” wines with memorable labels and affordable prices has made wine more interesting and attractive to greater numbers of American adults,” said Fredrikson.
U.S. wine consumption growth began a steady climb in 1991 after the CBS “60 Minutes” French Paradox broadcast and hundreds of other news media reported on the favorable health effects of moderate wine consumption. Since then, consumer demographic trends have continued to expand the U.S. wine market, with the adult population, aged 21 to 65, growing by 10.4 million since 2000. “Echo Boomers,” the adult children of the “Baby Boomer” generation that adopted wine in the 1960s and 1970s, are increasingly making wine more a part of their lifestyle.
“Wine consumption is gaining among all generational segments, led by Baby Boomers, with more interest not only by women, but men and nearly all ethnic groups and regions,” said Barbara Insel, Managing Director of Research at MKF Research in St. Helena. “Both retailers and restaurants are responding by expanding the quality and diversity of their offerings.”
California Table Wine Shipments by Price Segment
Premium wines, $7 and above, advanced 13 percent accounting for 35 percent of the case volume and 66 percent of winery sales revenues. Exciting brands, innovative packaging, critically-acclaimed California vintages and a good economy helped the strong growth of this price segment. Sales of everyday wines, priced up to $7, declined two percent, representing 65 percent of the volume and 34 percent of the revenues, according to Fredrikson.
The U.S. Market
Sales in the U.S. of wine from California, other states and foreign producers grew five percent in 2005 to an estimated 703 million gallons valued at $26 billion at retail. California wines represented a 63 percent share of the U.S. wine market or about two of every three bottles sold in the U.S. Of the total, table wine amounted to 619 million gallons; dessert wine was 53 million gallons; champagne and sparkling wine, 30 million gallons.
Wines in U.S. Supermarkets Continue Up Market Trend: Pinot Noir a Shooting Star
U.S. supermarket sales also reflected the growth of upscale wines, with wines priced $6 and above showing double-digit increases by volume, according to ACNielsen, which tracks laserscanning data from 3000 supermarkets across the country. For the second year in recent history, red wine edged out white as the top seller by volume in food stores, holding a 41.7 percent market share. White accounted for an estimated 41.0 percent share, while blush represented 17.4 percent share of volume. Still benefiting from the “Sideways” effect, Pinot Noir shipments experienced a dramatic 70 percent jump in food stores, compared to the previous year, though from a small base of two percent share by volume. Chardonnay remained the top-selling varietal wine, followed by Merlot, White Zinfandel and Cabernet Sauvignon. Together, these top four varietals totaled 53 percent of all table wine volume in food stores.
Champagne/Sparkling Wines Sales in U.S. Increased Two Percent
Total shipments to the U.S. from all production sources were 30.4 million gallons, up two percent, according to the Gomberg-Fredrikson Report. California champagne/sparkling wine holds a 60 percent share of this volume. The total champagne/sparkling wine category accounts for four percent of all wine sales in the U.S.
U.S. Wine Exports
Preliminary export numbers for 2005 declined 17 percent in value and 16 percent in volume, following spectacular growth in 2004 of 28 percent and 29 percent respectively, according to the U.S. Foreign Agricultural Service. The primary reason for the decrease involves a change in European sales. To save costs, some wineries are shipping their brands as bulk wine instead of bottled product. The bulk wine is then bottled abroad for distribution throughout Europe. The dollar’s two-year high against the Euro is also a contributing factor. U.S. wine exports, 95percent from California, totaled $658 million with 101 million gallons (384 million liters). Exports to Canada increased 16 percent in 2005 and Japan sales were steady following a significant increase in 2004.