January 27, 2017 – Sacramento, CA is hosting the USA’s biggest wine industry trade show and conference for about 1,000 attendees. The good news for everyone is that the wine sales continue to grow. In 2016, wine shipments increased by 2.8 percent while revenue from domestic wine sales jumped 4 percent. For the first time the average price for a bottle of wine reached $10 confirming that Americans are moving to higher priced wines. A record 383 million cases of wine were sold in the United States in 2016.
As is the way of the world these days, the future is complicated. The U.S. dollar is strong so that affects exports. Imports are cheaper, not the best news for domestic producers. The effect of the U.K. pulling out of the European Union is another unknown. It should help the sale of California wine in the U.K. but our dollar is strong and the British pound has fallen. French, Italian and Spanish wines also are more expensive due to the pound’s fall, so a decrease in sales to the U.K. will likely result in producers from those countries turning to the U.S. A. to increase their exports. The U.S. wine market is the biggest and most lucrative in the world and everyone wants in.
On the good news side, the places where customers can buy wine have increased dramatically. There are now 553,000 places where wine is available for purchase or is served. The number is a combination of on-premise meaning bars and restaurants, and off-premise meaning retail outlets. That’s an astonishing increase of 120,000 locations in the last 10 years. Depending on the state, hair and nail salons, movie theaters, even car washes now serve wine.
While the news of a robust market and growth is positive, domestic growers and wineries still face vigorous competition from foreign wineries, which have increased market share. The strong dollar is a big driver of imports, especially in the luxury category. One of the biggest success stories is the increase of more than 25 percent annually in the bubbly category by Italian prosecco.