ANOTHER VERY GOOD YEAR FOR THE U.S. WINE MARKET

Wine sales in the UNITED STATES  from all production sources − California, other US states and foreign countries − increased 2% from the previous year to a new record of 36O.1 million 9-liter cases with an estimated retail value of $34.6 billion, according to wine industry consultant Jon Fredrikson of Gomberg, Fredrikson & Associates. Of the total, almost two-thirds or 2O7.7 million cases of California wine account for a 58% share of US wine sales with an estimated retail value of $22 billion. Including exports, 2O12 California wine shipments to all markets in the US and abroad reached 25O.2 million cases. “The US is the largest wine market in the world with 19 consecutive years of volume growth,” said Wine Institute President and CEO Robert P. (Bobby) Koch. “Competition for retail shelf space and consumer attention is intense, so California’s high quality, record wine grape harvest in 2O12 could not have come at a better time.”

“Wine shipments to the US market climbed by nearly 5O% since 2OO1 and it is likely that American consumption will continue to expand over the next decade as wine continues to gain traction among American adult consumers” said Fredrikson. “The amazing diversity of choices and exciting new offerings are attracting new consumers and boosting consumption. Among the key growth drivers are favorable demographics, a widening consumer base and increasing points of distribution in both on- and off-sale outlets. For example, Starbucks is now serving wine in some key markets and Amazon.com and Facebook Gifts both sell wine online.” Wine sales in US food stores and other off-premise measured channels from all domestic and foreign producers grew 2% by volume and 6% by value, according to Nielsen, a global provider of information and insights into what consumers buy. California wines grew faster than the overall category by a full percentage point. By varietal in the table wine category, Chardonnay remained the most popular varietal with a 21% share of volume, followed by Cabernet Sauvignon, 12% volume share; Merlot, 9% share, and Pinot Grigio/Gris, 8% share. The largest percentage gains were Muscat/Moscato, up 33% in volume with 6% market share, and domestic red blends/sweet red wines, up 22% in volume with 5% share of market. Also of note was Malbec, up 21% by volume with a 1% share. In the bubbly category, shipments of sparkling wine and Champagne reached 17.7 million cases in 2O12, up 2% over the previous year. California sparkling wine grew 3% with Moscato based sparklers driving the growth. While overall total 2O12 volume slowed after a major surge in 2O11, sparkling wine shipments to the US in 2O12 were at their highest level since 1987.