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Good Times Roll for U.S. Wine Industry

March 2017
by Wines & Vines editorial staff

Sacramento, Calif.—The state of the U.S. wine industry is strong but subject to numerous challenges, according to authoritative observers who spoke Jan. 25 at the Unified Wine & Grape Symposium in Sacramento.

Economist Mike Veseth, who has researched and written extensively about the global wine economy, acknowledged that the industry’s status is very healthy but added that a new administration in Washington, D.C., and the imminent exit of the United Kingdom from the European Union loom as unknowns that might upset the situation. He observed that the U.S. dollar is at its strongest point in 14 years, while the British pound has dipped dramatically since UK citizens voted in favor of Brexit.

The good news is that America’s love affair with wine endured and expanded in 2016, as consumers found wine available in more locations and traded up in price, said Danny Brager, vice president of the beverage alcohol practice at the Nielsen Co.

Purchases of wine grew at six times the rate of consumer packaged goods in general, and California wine gained four times more volume than its biggest import competitor, Italian wine. Brager said, “I really think wine is a trophy category.”

Table wine consumption in the United States grew by 1.8% in volume and 4.4% in dollars at the stores where Nielsen measures about 60% of U.S. off-premise sales.

One of the driving factors was increasing availability of wine. Brager noted that 553,000 U.S. on- and off-premise locations now sell wine, which is 120,000 more locations than 10 years ago.

He said the average price of a 750ml bottle of wine is passing the $10 mark for the first time, reflecting the continuing premiumization trend in which price tiers at $11 and up are growing rapidly while those in glass bottles priced less than $8 were flat or shrinking.

Brager singled out a number of brands that had the fastest rates of growth, particularly Josh and Apothic. Two wineries with more than 100,000-case increases and double-digit growth rates were Riboli Family Winery Estates and Delicato Family Vineyards.

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