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My How You Have Grown ~ A Look at the Growth of the Wine Industry

by Monica Bennion on October 06, 2016


IMG_7007.CR2.jpgAs we wind down the 2016 harvest (Scott’s 43rd bounty), let’s take a moment to reflect on just how far the California wine industry has come.  By Proclamation of the Governor of California, September 2016 marked the 12th year that we have celebrated “California Wine Month”, and rightfully so!  The wine industry as a whole has grown exponentially over the last 50 years, and that growth has been seen largely throughout California.

While the 2016 harvest is finishing being picked, crushed and fermented, the 2015 numbers show us just how big the wine industry is getting, globally, nationally and here at home in sunny California.

 HOME & FOREIGN ECONOMICS
Domestically, the U.S. wine market continues to grow, and since 2010, the U.S. has been the largest wine consuming nation in the world.  Wine shipments to the U.S. from all production sources (California, other states and foreign producers), grew to 384 million cases with an estimated retail value of $55.8 billion.  California wines remained very popular in the U.S. with 229 million cases shipped within the U.S. in 2015.

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Quick Facts:

  • In 2015, wine shipments in and to the U.S. increased to 384 million cases (a 2% increase) from 2014.
  • In 2015, California represented 60% of the U.S. wine market with 229 million cases shipped within the U.S. (an estimated $31.9 billion dollar retail value).

Internationally, the United States remains in the #4 spot for “World Wide Production by County” (behind France, Italy and Spain).  But from 2011 to 2014, the United States saw a double digit jump in production.  Whereas France only had a 5.4% increase, Spain saw an 8.1% increase and Italy actually had a 4.3% decrease (from 2011-2014).  It is estimated that in 2015, the United States received 1.6 billion dollars in export revenue with record high sales of 51 million cases sold in 138 countries.  Needless to say, the United States, and California, is holding their strong grip on the international wine market.

Quick Facts:

  • As of 2014, The United States remains in the #4 spot for “World Wine Production by County” with a 12.2% increase from 2011.
  • In 2015, the U.S. wineries sold 51 million cases in 138 countries.  California wines represented 92% of those cases.

(Statistics and numbers provided by the Wine Institute)


JOBS & TOURISM
As the California wine industry continues to grow, we can see the impact the industry has on both the U.S. and California economy.  This includes job growth, tax revenue, economic activity, and tourism.  With more and more California wines being distributed throughout the U.S., for the first time we have numbers reflecting the impact of the California wine industry on the U.S. economy as a whole, as well as the impact on California alone.

In 2014, California recorded 4,285 bonded wineries.  In 2015, there were 4,600 bonded wineries, mainly family-owned businesses, and many multi-generational.*

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Quick Facts:

U.S. Economic Impact:

  • Employs 786,000 Americans
  • Generates $114 billion in annual economic activity
  • Pays $15.2 billion in taxes (annual local, state and federal business, excise taxes & personal taxes)
  • Pays $34.9 billion in wages annually

 

California Economic Impact:

  • Employs 325,000 Californians
  • Generates $57.6 billion in annual economic activity
  • Pays $7.6 billion in taxes (annual local, state and federal business, excise taxes & personal taxes)
  • Pays $17.2 billion in wages annually
  • Attracts 23.6 million tourists to California wineries each year (an 18% increase over 2014)

 (Statistics and numbers provided by the Wine Institute)

 

LAND OF MILK AND GRAPES
With fertile soil, good weather and an abundance of land, California is one of the nation’s leading agricultural states.  Over one-third of the country’s vegetables and two-thirds of the country’s fruits and nuts are grown in California.  This includes grapes, coming in at #3 in California’s top-ten valued commodities, only behind milk and almonds.  Although grapes fall within the top-five California commodities, roughly 1% of California land is planted to vineyards.

Wine grapes are grown in 49 of the 58 California counties.  Within those 49 counties, there are 5,900 winegrape growers and 608,000 acres of winegrapes.  California is broken down into six wine regions, and within those, there are 138 recognized American Viticultural Areas (AVAs).

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Quick Facts:
The three oldest California AVAs:

  • Napa Valley (Napa County), Effective 2/27/1981
  • Santa Maria Valley (San Luis Obispo & Santa Barbara Counties), Effective 9/4/1981
  • San Pasqual Valley (San Diego County), Effective 9/16/1981

The three newest California AVAs:

  • Squaw Valley-Miramonte (Fresno County), Effective 9/8/2015
  • Los Olivos District (Santa Barbara County), Effective 2/22/2016
  • Lamorinda (Contra Costa County), Effective 3/25/2016

More than 110 winegrape varieties are grown in California.  The top five planted and grape bearing varieties are Chardonnay, Cabernet Sauvignon, Zinfandel, Merlot, and Pinot Noir.

 (Statistics and numbers provided by the Wine Institute)

TRENDING NOW
If you’ve been enjoying wine now for a number of years, you may very well have seen the change in trends.  In the 1970’s and 1980’s White Zinfandel was all the rage.  In the 1990’s as our palates progressed, and Merlot and Chardonnay stole the spotlight.  In 2004, that all changed when the movie “Sideways” was released and Pinot Noir became the diva wine of the new century.  Over the last decade however, we have started seeing the trend that “trends” don’t mean a thing!  No longer are we judged by the wine we enjoy, no matter the varietal (or packaging).  In the wine world, equal enjoyment opportunity has been given to Zinfandel, Barbera, Syrah, Tempranillo, Sangiovese, Petite Sirah, Grenache, Pinot Gris, Moscato, Sauvignon Blanc, Red Wine Blends, White Wine Blends, Sparkling Wine and the unending other varieties out there.  However, with the “millennials” now over the age of 21, the trend toward sweeter wines is returning.

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Quick Facts:
The most popular table wine types by volume in 2015 were:

  • Chardonnay (21% share)
  • Cabernet Sauvignon (14%)
  • Red Blends/Sweet Reds (10%)
  • Pinot Grigio/Gris (9%)
  • Merlot (8%)
  • Pinot Noir (5.5%)
  • Moscato (5%)
  • Sauvignon Blanc (5%)
  • White Zinfandel (4%)

 (Statistics and numbers provided by the Wine Institute)

 

IT’S GETTING EASIER TO GET YOUR WINES
Although Prohibition ended nearly 85 years ago, lifting the constitutional ban on the production, importation, transportation and sale of alcoholic beverages, it’s presence is still felt today by way of strict shipping and sales laws.  Great strides have been made on the federal and state levels to increase the sales and distribution of alcoholic beverages.  These steps are evident by the increase in both wine sales and wine consumption throughout the U.S.  But there’s still a lot of work to be done to make it easier to get the wines you want the most.  Visit www.FreeTheGrapes.org for more information about your state’s laws and restrictions.  And if you don’t like them, get involved to get your juice!

Quick Facts:
States Where Direct to Consumer Shipping is Prohibited:

  • Alabama (Unless you work a deal with the ABC folks)
  • Delaware
  • Kentucky (Felony status)
  • Mississippi (You can’t even bring wine home!)
  • Oklahoma (Misdemeanor status)
  • Rhode Island
  • Utah (Felony status)

Recently Added or Modified Direct to Consumer States:

  • Arizona
  • Indiana
  • Louisiana
  • Massachusetts
  • North Dakota
  • Pennsylvania
  • South Dakota

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While many states are coming on board with Direct to Consumer shipping, the laws and hoops we as a winery must follow and jump through can be extenstive and expensive.  While more and more states are being added, just remember the winery you love the most may not meet the restrictions imposed by that state (i.e. distributor relationships, common carriers, volume production, etc.).

(Statistics and number provided by the Wine Institute & Ship Compliance)

 

IN CLOSING
The statistics from 2015 clearly show that the wine world is still booming; in California, the United States and all around the world.  With the ever increasing wine varieties, it’s not too often anymore that I hear someone say “Oh, I don’t like wine”.  There’s literally something for everyone.  California is remaining at the forefront of the wine world, producing high quality wines at a great value.  These wines are in high demand both here at home and internationally.  To that, I raise my glass and toast to the continued success of all in the wine industry and those who support us.

 

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References:
Wine Institute - www.wineinstitute.org
Discover California Wines - www.discovercaliforniawines.com
USDA - National Agricultural Statisitcs Survey
S
hip Compliance - www.shipcompliance.com

RELATED POSTS:
Harvest Report 2015 - Celebrating California Wine Month
2015 Harvest Report Recap

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