Decanter World Wine AwardsBulk wine imports to US 'soar' in 2012
- Wednesday 16 January 2013
Bulk wine in US: 'continued increase'
Silicon Valley Bank’s annual State of the Wine Industry survey – published yesterday – noted that bulk wine imports to the US 'soared' in 2012 as compared to the previous year, ‘from 13.7m cases, to 31.5m cases, and totalling over 40m cases in the past 12 months.’
According to the survey, the increase is due to higher domestic demand, better access to foreign bulk and favourable exchange rates.
In spite of a high-quality and high-volume California harvest in 2012, survey authors predict a continued increase in bulk imports this year, especially if the dollar strengthens.
Chile, Argentina and Australia were responsible for 75% of all bulk imports to the US in 2012.
The survey noted that ‘younger consumers are changing their views about the superior quality of traditional California gateway wines and drinking more foreign wines than generations of the past, demonstrating very different preferences.’
Using the example of popular food retailer Trader Joe’s, it says in 2011, the value wines in Trader Joe’s were domestic and appellation based. But in 2012, ‘international bargain wines have replaced domestic discounted wines.’
To stem the trend, survey authors call on industry to create a promotional campaign for US grapes because ‘the longer-term implication of developing a young consumer with loyalty to foreign products isn’t positive for the US wine business.’
They noted that marketing campaigns have successfully worked to improve the domestic almond and pistachio trades. ‘Why not US wine grapes?’
Any campaign should educate consumers about ‘the positive qualitative differences in US wine’ and stress an ‘improved carbon footprint from growing locally/regionally produced products, and the authenticity of our family-owned wine industry, where even Gallo is still a family business.’
The survey predicts sluggish economic growth in the US that will lead to slower growth in sales of fine wine. The survey’s accolades for the 2012 vintage in California in general lead authors to predict that fine wine consumers may ‘forego’ the 2011 vintage and ‘wait for the release of the 2012s.’
Founded in 1994, Silicon Valley Bank has the largest team of commercial bankers dedicated to the wine industry of any bank nationwide. Its wine division has offices in Napa and Sonoma counties and serves clients in the fine wine producing regions of California, Oregon and Washington.
Have your say!
Larry Chandler
January 16 17:57
What will the market be like in the US if and when China starts making good wine that Americans will like?
In 2008, wine merchant Berry Brothers and Rudd predicted that within 50 years the quality of Chinese wine will rival that of Bordeaux. (From Wikipedia, quoting Decanter.)
But sooner than in 50 years, the Chinese will be making pretty decent wine.
K. Morris
January 16 16:10
"[S]urvey authors call on industry to create a promotional campaign for US grapes because ‘the longer-term implication of developing a young consumer with loyalty to foreign products isn’t positive for the US wine business.’
They noted that marketing campaigns have successfully worked to improve the domestic almond and pistachio trades. ‘Why not US wine grapes?’"
Allow me to answer the surveyors "why not?" question directly ... The answer: Because a marketing campaign such as this would be a bust. The recent influx of foreign bulk juice is driven overwhelmingly by price point on the retail shelf, and we have been through this several times before. The influx of foreign juice occurred because bulk market juice required for lower-priced wines has been more expensive in the past two years for California grapes, due to smaller than average crops during a period of continued consumption growth.
To my mind, there has never been an effective "Buy American" wine marketing campaign conducted, because the category is so fractured and the consumer just doesn't care as much as some in the industry think they do. Most customers are simply buying $5.99 or $7.99 chardonnay - in a cool package, regardless of appellation. All the talk of carbon footprint and supporting American "family business" is far beyond the interests of the great majority of wine U.S. wine consumers.