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WASHINGTON, DC - 05/11/05 - US wine exports could surge "well over" 10% this year thanks to the weak dollar and strong overseas marketing efforts by the largely California-based industry, according to figures recently released by the US Department of Agriculture.

That could mean another strong year for the wine industry following 2004's record 28% increase and 2003's 17% surge.

Those two years snapped a five-year period of stagnation, during which exports rose less than half of a percent per year on average.

The vast majority of US wine exports come from California's 1,294 wineries - more than half of which are located in Napa, Sonoma, Mendocino, and Lake counties - and are destined for Europe, which accounts for a full 61% of total US wine export sales.
 
The top markets for US-produced wine exports include Britain, which accounted for the sharpest increase in US wine consumption.

The largest importer of California wines for the past decade or more, UK consumers spent nearly 40% more on US wine last year, a fact the report attributes to greater availability to a quality product, increased affluence, and the fact that "existing consumers, particularly those in the 35-64 age range, are simply drinking more," the report said.

Japan, Canada, the Netherlands, and Germany also ranked high on the list, the report said, crediting the projected growth to "a weaker US dollar against the currencies of key trading partners, a general improvement in the global economy, and strong marketing strategies, which could bode well for increased sales of US wines in 2005."

Note the emphasis on "could," as "another strong year is not assured," the report warned.

The changing drinking habits of Europeans, governmental subsidies, and increasing production in other nations - all present challenges for US exports, it said.

"The situation must be tempered, however, with the fact that per-capita wine consumption is decreasing in some counties, such as Italy, France, and Spain," the report said.

Interestingly, wine consumption in Italy and France has dropped dramatically in recent years, from more than 100 liters per year per person 25 years ago to about half that today, the report found.

The trend is coinciding with production increases in several nations that compete with the US for the worldwide export market. France's production was up 23% last year, Italy's 20% and Australia's by some 4%.

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