US wine exports 2016: Record revenues

US wine exports earned a record US$1.62bn in winery revenues during 2016, boosted by gains in the UK and China despite a double-digit decline in shipment volumes.

US wine exports 2016

At 45.9 million cases, down 10.5% on 2015, shipments – 90% of them from California – dropped to their lowest level since 2012, but the strong dollar helped producers to increase their revenues by 1% on 2015.

Exports to the UK – California wine’s biggest overseas market – were up 18% by value and 5% by volume to $337 million and more than 13 million cases respectively.

This led the Californian Wine Institute UK trade director Justin Knock MW to claim that California was ‘on track’ to hit its target of achieving $400 million in UK sales by the end of the decade.

Meanwhile, shipments to China rose 46.6% by value and 11% by volume**, attributed to ‘meaningful growth in higher-value products’ by Christopher Beros, Wine Institute trade director for China and Pacific Rim.

While helping the value of shipments to grow during the year, the strong dollar poses a competitive challenge for producers and importers.

‘As the dollar moves towards parity with the euro, export volumes to Europe are down in most countries, mainly in the lower-priced segment,’ pointed out Paul Molleman, Wine Institute trade director for Continental Europe.

While exports to the EU as a whole rose 10.1% to $685 million, the value increase excluding the UK was just 2.7%, he added.

California’s main export markets experienced contrasting fortunes during 2016, with Canada, Japan, Mexico, Switzerland and Singapore all down in value terms.

However smaller markets, such as the Philippines, Dominican Republic and Taiwan, recorded strong gains.

There was particular disappointment in Japan at President Trump’s decision to withdraw from the Trans-Pacific Partnership trade deal, since key competitors such as Chile and Australia already have free trade agreements with Japan, and thus lower duty tariffs.

** Source of data: Global Trade Information Services which bases their info on the US Dept of Commerce. DecanterChina reported the Chinese Customs import figures which differ – read more here.