Premiumization Continues Amid Challenging Exchange Rates

Toronto 2017 Wine Fair
The popular California Wine Fair in Toronto was attended by more than 1,000 trade and media.

SAN FRANCISCO — U.S. wine exports, 97% from California, reached $1.53 billion in winery revenues and 380 million liters (42.2 million cases) in 2017. Golden State exports were down 5.5% in value and 7.9% in volume due in part to the strong dollar, heavily-subsidized foreign wine producers and competitors forging free trade agreements in key markets.

“Global premiumization continues and California wines are well-positioned with our range of offerings, aspirational lifestyle, well-earned reputation for high quality and leadership in sustainable winegrowing,” said Robert P. (Bobby) Koch, President and CEO of Wine Institute.

“California wine exports have grown nearly 70% by value in the past decade. Our global marketing efforts focusing on the quality and diversity of California wine continue to gain traction with our trading partners throughout the world,” said Wine Institute Vice President of International Marketing Linsey Gallagher. Gallagher oversees Wine Institute’s California Wine Export Program, involving more than 175 wineries that export to 138 countries, and 15 representative offices conducting programs in 25 countries across the globe.

The top 10 export markets for California wines are: the European Union’s 28-member countries, accounting for $553 million, Canada, $444 million; Hong Kong, $119 million; Japan, $94 million; China, $79 million; South Korea, $25 million; Mexico, $23 million; Singapore, $17 million; Philippines, $14 million; and Dominican Republic, $13 million.

“Free trade agreements that place the U.S. on equal footing with other wine producing countries are absolutely essential to growing U.S. wine exports,” said Charles Jefferson, Wine Institute Vice President of Federal Relations and International Public Policy.

Wine Institute’s Regional Trade Directors in key export markets reported on 2017 exports:

“Despite a flat wine market in Canada and ongoing exchange rate challenges, Canada remains the top dollar value market for California wines. Canadian consumers have confidence in the quality and value offered by California wineries whose wines are successful in all price segments,” according to Rick Slomka, Wine Institute Trade Director for Canada. “Although recent price increases may lead to slower growth, new product introductions and line extensions for popular brands have kept the momentum strong for the California wine category. U.S. wines were the number one table wine category by value in Canada in 2017 for the fourth consecutive year with almost Canadian $1.1 billion in retail sales. “We anticipate continued growth in the liquor board stores and are also looking forward to working with the provincial governments to improve and equalize access to new grocery distribution channels.”

“As the Euro became stronger in the past 12 months, California wine exports to continental Europe improved. In Germany for instance, our key market on the continent, German customs reported an increase in California wine imports of 7% by volume. The data also shows increases in export value to key markets such as Sweden, the Netherlands and Denmark,” said Paul Molleman, Wine Institute Trade Director for Continental Europe.

“Sales of premium, super-premium and luxury Californian wines continue to be robust despite very challenging currency-led price increases. In 2016, the pound was valued at $1.46. A year later it dropped 17% to $1.21. Price increases were largely passed through to consumers as increased shelf prices. The pound has strengthened in the past six months, and we expect this will be positive for California wines in the first half of 2018 as importers look to replenish stocks at more favorable prices,” said Wine Institute United Kingdom Trade Director Justin Knock, MW.

“Due to the U.S. withdrawal from the Trans-Pacific Partnership and the Japan-EU Economic Partnership Agreement, all of the U.S.’s wine region competitors will enter Japan duty free by 2019 while the full 15% import duty will continue to be charged on California wines. Japanese importers have been importing U.S. bulk wine to reduce the import duties, but Chilean and Australian bulk wine is already duty free and European bulk will soon have duty free status. Bottled U.S. wine exports to Japan decreased 20% by volume in 2017, but value increased 12.1%. Ultra-premium wines are less susceptible to the import duty disadvantage, and Wine Institute’s Japan office has been consistently promoting the premium category with its wine-by-the-glass restaurant promotions,” said Ken-ichi Hori, Wine Institute’s Japan Trade Director. “U.S. wine importers in Japan hope the U.S. will establish a Free Trade Agreement with Japan as soon as possible to abolish the heavy import duty disadvantage of U.S. wines, which will help the entire American wine category grow in Japan.”

“U.S. wine exports to Greater China (Mainland China, Hong Kong and Taiwan) were strong with 10% growth to over $210 million in 2017. Also experiencing growth were South Korea, Singapore and the Philippines with value increasing more than volume, signaling the premiumization trend. For Asia, the main story is the economic growth in China, the largest country in the world in terms of population. China has a rapidly growing middle class that is traveling outside the country and adopting many Western tastes and lifestyle preferences. Consumption of imported wine has increased 2.5 times in the last five years on the Chinese Mainland. We expect this trend to continue for the foreseeable future,” said Christopher Beros, Wine Institute Trade Director for China and Pacific Rim.

Since 1985, Wine Institute has served as the administrator of the Market Access Program, a cost-share export promotion program managed by the USDA’s Foreign Agricultural Service. Wine Institute’s Export Program supports California Wines worldwide with a consumer website in eight languages, social media campaigns in 18 countries, educational tools and videos, and a strong partnership with Visit California to increase tourism to California wine regions. Wine Institute organizes California’s participation in international trade shows and trade missions, offers master classes and seminars as well as tastings for trade, media and consumers worldwide. Last year, the program also hosted 155 international media and wine buyers from 20 countries for visits to California wine country. For information, see: Wine Institute’s California Wine Export Program


Year to Date: January-December, 2017 and 2016
Value (U.S. Dollars)
Revenues to Wineries
’17 v ’16
Volume (Liters)
’17 v ’16
Ranked by 2017 Value</strong
European Union Total** $553,098,853 $685,230,481 -19.28 197,782,763 221,141,004 – 10.56
Canada $443,865,878 $431,402,689 2.89 83,983,119 88,793,202 – 5.42
Hong Kong $118,803,938 $98,532,044 20.57 9,364,978 12,428,906 – 24.65
Japan $94,103,357 $87,488,237 7.56 23,341,643 23,613,126 – 1.15
China $78,667,031 $81,480,265 – 3.45 14,190,217 14,861,019 – 4.51
South Korea $25,454,842 $23,337,670 9.07 4,898,207 4,261,903 14.93
Mexico $22,543,709 $24,059,600 – 6.30 7,138,570 7,825,030 – 8.77
Singapore $16,579,152 $13,635,128 21.59 2,274,968 2,237,766 1.66
Philippines $13,544,471 $13,202,614 2.59 4,784,109 4,317,825 10.80
Dominican Republic $13,230,785 $13,031,174 1.53 3,199,157 3,156,701 1.34
Taiwan $13,054,883 $12,167,856 7.29 1,456,869 1,645,785 – 11.48
OTHER COUNTRIES $137,320,004 $135,946,628 1.17 $27,631,318 $28,306,756 – 2.39
WORLD TOTAL $1,530,266,903 $1,619,514,386 – 5.51 380,045,918 412,589,023 – 7.89
Sources: Wine Institute & Global Trade Information Services, using data from U.S. Dept. of Commerce. Preliminary numbers. Includes hard cider. History revised.

* Statistics exclude re-exported wine due to U.S. DOC changing its reporting to exclude this wine.
** Stats for the 28 EU countries are combined because transshipments to final destinations in neighboring countries make a country-by-country breakdown not reflective of actual consumption in each country.
To convert liters to gallons, multiply liters by .26418 To convert liters to cases, divide liters by 9.


U.S. WINE EXPORTS 1997-2017

(In millions)


(In millions of dollars)

Revenues to Wineries
2017 100.4 380.0 42.2 $1,530
2016 109.0 412.6 45.8 <$1,620
2015 121.9 461.3 51.3 $1,603
2014 117.0 442.7 49.2 $1,494
2013 115.1 435.8 48.4 $1,553
2012 106.9 404.8 45.0 $1,336
2011 111.4 421.6 46.8 $1,297
2010 107.6 407.3 45.3 $1,064
2009 106.4 402.8 44.8 $859
2008 125.5 474.9 52.8 $963
2007 115.9 438.8 48.8 $911
2006 105.1 397.9 44.2 $843
2005 101.5 384.1 42.7 $659
2004 119.1 451.0 50.1 $796
2003 92.3 349.2 38.8 $621
2002 73.4 277.8 30.9 $542
2001 78.8 298.3 33.1 $531
2000 77.8 294.4 32.7 $551
1999 74.2 281.0 31.2 $541
1998 71.1 269.1 29.9 $532
1997 58.7 222.1 24.7 $415
Sources: Wine Institute & Global Trade Information Services, using data from U.S. Dept. of Commerce. History revised.


U.S. Wine Exports in Millions of Dollars

Sources: Wine Institute & Global Trade Information Services, using U.S. Dept. of Commerce data.

Wine Institute Communications Department, 415/356-7525