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Wine Production & Consumption

Wine Production Around the World

Wine production during the past 40 years has increased vastly. Europe accounts for over three-quarters of the world's wine production, of which Italy, France and Spain remain the biggest producers, although no longer the biggest consumers. According to a report published by the Wine Institute dated August 1999, Italy's consumption actually went down slightly, while the Netherlands, Switzerland, France, Spain, Belgium and Scandinavia increased their wine consumption. The United Kingdom, Ireland, Australia, Canada, Argentina, China, Yugoslavia, Brazil and Japan also increased their consumption, while Germany, listed as the fourth-largest wine consumer, showed no changes.

The report, based on data from Office International de la Vigne et du Vin (O.I.V.) (U.S numbers are provided from Gomberg, Fredrikson & Assoc.) notes that the Wine Institute believes the total wine-consumption numbers are under-reported.

American Wine Production
Americans drink a lot less wine than the Italians, Spanish, Germans, British or French. According to statistics, only about 18% of the American people are consuming wine today, and the average person drinks less than five gallons of wine per year. That is about one-tenth of the wine an average Italian, French or Spanish person consumes.

The United States is in fourth place among the leading wine-producers of the world. Boasting with a 12-billion-dollar-a-year wine industry, with over 750 wineries, California is the largest producer in this country. California produced 375 million gallons, or 91% of the total US production, up 20% from 1997 to 1998.

The second-largest producer in the U.S, New York, with about 100 wineries, produces 14 million gallons of wine and over half a million of champagne annually, which is 5% of the nation's wine production.
Washington and Oregon in the Pacific Northwest, with 160 wineries, produce over 22 million gallons per year.

How is it Changing?
Total wine sales in the U.S. in 1998, which includes wines from California, other U.S. states and foreign markets, reached 531 million gallons, or $17 billion, up only 1% from 1997. However, the estimated retail value was up 5.5%. This can be explained by the shift of American consumers moving from white and blush jug wines to high-end varietal wines.

The U.S. ranks ninth by volume as a wine exporter. The total export in 1998 was $537 million, up 26% from 1997. Over 125 California wineries alone export to 165 markets. Total California wine sales in the U.S. and abroad reached 437 million gallons, up 3% from 1997. U.S. consumers purchased most of the volume, as California wineries shipped 388 million gallons nationwide for a 73% share of the U.S. market. The estimated retail value of the state's wine shipments within the U.S. was $12 billion, up 5% from 1997 to 1998.

Who does the US export to?
The United Kingdom was the largest U.S. wine export market, representing over a quarter of the value shipped abroad. Export to the U.K. increased 32% from 1997, to $143 million in sales. Export to Japan increased 134% to $93 million, making it the second-largest export market for the U.S. Canada, with $91 million in sales and a 15% increase, ranks as the third-largest export market. The Netherlands shows a 170% increase with $48 million in sales; Switzerland shows a 27% increase with $23 million in sales, and Ireland shows a 15% increase with $11 million in sales.

California and other North American winemakers are gaining recognition for producing some of the highest-quality wines in the world. The U.S holds only a 3% share of the world export market by gallonage. Tariffs and distribution regulations limit American access to wine markets in many parts of the world. "Despite protectionist measures, most wine export markets have a positive business climate with significant opportunities," says John De Luca, Wine Institute president and CEO. "Global markets are being opened and expanded for California wine as foreign trade becomes more important to the future growth of our industry."