American exported wine earned a record $1.62bn in winery income last year, boosted by significant increases in the China and UK market. This is despite a big drop in shipment quantities.
And despite craft beer trying to muscle in on the alcohol market, U.S. consumers continued to prefer a glass of wine over other alcoholic drinks. In fact, according to the Wine Institute, America is still the largest wine drinking country since 2010.
But at 45.9 million cases, exports of wine last year experienced a drop of 10.5% on 2015, its lowest levels since 2012. However, the strong dollar help to boost producers’ incomes on 2015 by around 1%.
Shipments to the UK and China
Around 90% of American wine comes from California and its exports to the UK, its largest overseas market, increased by 18% by value to $337 million and 5% by volume to more than 13 million cases. The Californian Wine Institute says that these figures show that California remains on track to hit its target of reaching $400 million in UK sales by 2020.
And it was also good news for overseas exports to China for American wine. These experienced a rise of 46.6% by value and 11% by volume.
Alongside helping the value of exports to grow, the strengthened dollar has posed a significant challenge for importers and also producers. As the dollar gets closer to being on par with the euro, shipment quantities to Europe have fallen in most countries, particularly in the lower-priced sector. While exports to the EU overall rose by 10.1% to $685 million, the value increase not including the UK, was just 2.7%.
California’s main export markets saw a mixture of fortunes last year, with Japan, Canada, Mexico, Singapore and Switzerland all down in terms of value. However smaller markets, such as Taiwan, the Philippines and Dominican Republic recorded solid gains.
Trade deal Trumped
Certain political decisions have had a potential impact on U.S. exports. For example, Japan showed considerable disappointment at President Trump’s announcement that the U.S. should pull out of the Trans-Pacific Partnership trade deal. Significant competitors like Australia and Chile and Australia have already established free trade agreements with Japan, and consequently benefit from lower duty tariffs.