15th August, 2013 by db_staff
If there is anything the recent worldwide recession has told us about the American wine market, it is that California winegrowers largely shrugged off the economic downturn, taking a small hit in 2009 before moving on to even greater sales volumes.
In the domestic market, California has also been able to meet whatever challenges foreign imports have thrown at it. “Californian wines have a pretty solid position overall,” says Peter Morrell, CEO of the New York-based Morrell & Company, which runs both a retail store and wine bar as well as a large internet-based sales and shipping business.
Katie Lazar, sales and marketing director for Cain winery in Napa Valley, says: “I see the convergence of two factors – the high-end consumer is back and [because of recent short crops] we have less wine to sell. I have a feeling of great momentum.”
Statistics from California’s Wine Institute bear them out. The most recent figures supplied by Gomberg, Fredrikson & Associates show US sales of Californian wines rose to 211.9 million cases in 2011, its highest volume ever, up 5.6% from 2010. Estimated retail value of these shipments was $19.9 billion (£12.9bn), up 5.9%. Except for a one-year fall off of a half-billion dollars to $17.9bn in 2009, growth in dollar volume of California’s domestic sales has been steady for the past 15 years. It is the world’s fourth largest wine producer, trailing only France, Italy and Spain, with 3,540 wineries – mostly family owned – and 4,600 grape growers.
That is not to say that there hasn’t been considerable pain to some producers. Those heavily dependent on the hard-hit on-trade or restaurant market or who had not managed their cash flow and inventories well were forced to have “fire sales”, often anonymously and heavily discounted, primarily to the dozens of internet marketing forms. But wine retailers helped wineries pick up the slack to their own advantage.
When many restaurants could not cover their wine allocations, Frank Pagliaro, owner of FranksWine in Wilmington, Delaware, says he and other retailers snapped them up. “I’ve sold more north-of-$100 Cali Cabs in the past five years than I did the previous five years,” he says, “mainly because I could get what my customers wanted.” There are also several wine trends, generated both domestically and internationally, that seem to be working in the Californians’ favour.