California wine sales in US hit $40bn in 2018

Sales of Californian in the US achieved a retail value of US$40.2 billion in 2018, up 3% on the previous year, with a total of 248 million nine-litre cases sold in the US last year.

According to figures published by the Wine Institute, sales of Californian wine, including exports, totalled 285 million cases last year.

Commenting on the findings, Robert P. (Bobby) Koch, Wine Institute president and CEO, said: “Consumer interest in premium wines continues to be the dominant trend. As consumers trade up, our California wines are emphasising high quality, value and sustainable winegrowing.”

Jon Moramarco, founder and managing partner of BW 166 LLC, and editor of the Gomberg Fredrikson Report, added: “California wine shipments experienced a 15% volume growth in the U.S. over the last decade, and increased 6 million cases in 2018 over the previous year.”

He also reported that direct-to-consumer sales have increased by 9% in volume and 12% in value compared to the previous year, with 6 million cases sold worth $3 billion in 2018.

He continued: “Baby Boomers are still the driving force in wine consumption, but while sales are still growing, it’s slowing as the boomer generation ages and presumably drinks less. Wine marketers are working to maintain the interest of boomers and attract gen x’ers and millennials with new and different wines.”

The US wine market

Danny Brager, senior vice president of Nielsen’s Beverage Alcohol Practice Area, noted the rise of moderation, leading to trends in smaller serve packaging and seeking drinking ‘experiences’ in a range of different venues. Wine sold on e-commerce platforms is impacting US wine sales, while packaging solutions such as three-litre boxes and wine in cans are also a growing trend.

He added that sites that sold wine in the US have increased by 8.5% compared to five years ago to total 567,000 off- and on-premise locations.

Imports and exports

Shipments of wine to the US, including wine made in the US as well as oversees, grew 1% last year to hit 406.5 million cases worth $68.1 billion. Of that, wine produced in California (245m cases) represents 61% of the total US wine market.

95% of US wine exports hail from California. Total exports of US wine generated $1.46bn in 2018, with a total of 375m litres (41.7m cases) exported.

In terms of top markets, the EU remained on top, accounting for $469m of sales, followed by Canada ($449m), Hong Kong ($130m), Japan ($93m), China ($59m), Mexico ($27m), South Korea ($25m), Nigeria ($15m), the Dominican Republic ($14.4m) and Singapore ($14m).

US sales by grape variety/style

According to Nielsen, which measured off-premise sales in the US, Chardonnay retained its crown as the best selling grape variety by volume, with an 18.3% share of the market. It was followed by Cabernet Sauvignon (15.5%); Red Blends (13.5%); Pinot Grigio/Gris (10.2%); Merlot (6.5%); Moscato/Muscat (5.7%) ; Pinot Noir (5.4%); Sauvignon Blanc (5.3%); Rosé/Blush 4.9%; and Zinfandel, 3.4%.

Among the top risers in 2018 was rosé, with sales by volume increasing by 17% compared to 2017.

Wine sales in the US and sales of Californian wine

Sources: Wine Institute, Department of Commerce, Estimates by BW166/Gomberg, Fredrikson & Associates. Preliminary.

Sources: Wine Institute and BW166/Gomberg-Fredrikson Report. Preliminary.