Wine

January 19, 2011

California Wines Marketing Campaign Launched

The Wine Institute, a California Trade Group, has launched a new global marketing campaign intended to boost California wine exports. Using the tagline “Discover California Wines” the campaign will incorporates images of the state’s famous landmarks and will feature print advertising, brochures, video and trade show attendance. The campaign is scheduled to debut at several 2011 events, including The London International Wine Fair, Vinexpo and the California Wines European Spring Tour.

The Wine Institute—which manages its own international marketing and shipping export program—will provide campaign materials to winemakers, importers, retailers and restaurateurs actively pushing California wine overseas. “The ‘Discover California Wines’ campaign gives our international representatives the tools they need to build California wine sales exponentially around the globe,” said Robert Koch, president and CEO of The Wine Institute. “We’re setting an ambitious goal of more than doubling California/U.S. wine exports to $2 billion by 2022.”

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February 3, 2010

California Wine Shipment Drop for first time in 16 years

California shipments of wine have dropped in 2009 for the first time since 1993. As reported in the San Francisco Chronicle, sales figures show that consumption is up 2.1 percent nationally, but consumers are turning to cheaper imports from Chile, Argentina and Australia as global production exceeds demand.  ”

The numbers announced last week by Woodside wine research firm Gomberg, Fredrikson &amp Associates analyst Jon Fredrikson at the Unified Wine & Grape Symposium in Sacramento. “As we basically had a financial heart attack, people just reined in their spending and were very cautious,” Fredrikson said. “They moved dramatically down to lower price points, below $5 and $7. Small wineries in the North Coast that sell bottles from $25 to $100 were basically shut out. Inventories backed up, and that just made it an ugly year.”

The biggest drop in wine sales is for bottles that retail for more than $20. Sales were off between 20 and 30 percent in 2009, Steve Rannekleiv, an analyst for Rabobank told the Chronicle.  During the same time, sales for wines that cost less than $6 a bottle rose 5 percent.

As consumers have tightened their purse strings, bulk wine imports from countries with lower production and land costs have climbed. Between 2007 and 2009, imports more than doubled to 13 million cases to capture 32 percent of the U.S. market. “Argentina is the sleeping giant,” Rannekleiv said. Argentina has 510,000 acres planted in grapes, compared with 480,000 in California, which produces 90 percent of the wine made in the United States.

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November 17, 2008

Federal grant of $125,000 awarded for sustainable wine program

The California Sustainable Winegrow-ing Alliance, created by the San Francisco-based Wine Institute and the California Association of Winegrape Growers has received a $125,000 specialty crop block grant from the U.S. Department of Agriculture’s Agricultural Marketing Service to create a certification system for the effort. According to a Business Journal Report, the program started five years ago with the creation of the voluntary Code of Sustainable Winegrowing. Some environmental-protection advocates have called for third-party verification of compliance with the extensive best-management practices in the code. The alliance is currently drafting guidelines for certification.

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October 14, 2008

Wine Institute hires international marketing executive

The Wine Institute hired a director of international marketing, according to a report in San Francisco Business Times.  Linsey Simpson Gallagher will fill the new position at the San Francisco-based Wine Institute, created because Joseph Rollo, head of the institute’s international department for 20 years, had seen his work increase dramatically.  Rollo will continue full time work at the Wine Institute under the title director of international trade policy.  Gallagher, who starts Nov. 1, was vice president of her family’s real estate business on the East Coast. She was also marketing manager for E.&J. Gallo Winery and also manager of finance for the NBC Today Show.  Robert Koch is president and CEO of the Wine Institute.

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March 4, 2008

Crashing dollar makes wine exporters happy campers

As reported in the Los Angeles Times:

With the declining value of the U.S. dollar and increasing wine sales overseas, Charles Shaw wine, an American favorite, may seem in some places more like “One-Buck Chuck.”

That’s because the low value of the dollar is starting to turn California wines into bargains abroad. 2007 was a vintage year for wine exports, which grew by almost 9% to a record $951 million, the Wine Institute, the industry’s main trade group, said Thursday. California wineries make 95% of the U.S. wine sold abroad. Two large Central Valley companies, E. & J. Gallo Winery and Charles Shaw maker Bronco Wine Co., were among the biggest exporters.

Gallo, the nation’s largest wine exporter, has bottles on the shelves of supermarkets in China and 91 other countries, and Bronco is a big supplier of bulk wine that is bottled and sold in England, one of the largest foreign markets for California vintages.

The volume of U.S. wine sold abroad is growing by an even faster, 12% rate. California wine is now sold in 125 countries. On Thursday, the euro rose above $1.52 for the first time in its nine-year history. Further interest-rate cuts in the United States are likely to keep exchange rates favorable for wine exporters. At the same time, the low dollar helps California winemakers fend off foreign competition in the U.S. Jon Fredrikson, a Woodside, Calif., wine industry analyst, believes there are early signs that the low dollar is starting to pay off for California makers of premium wines.

“American wines are a bargain right now, and that’s showing up with what’s being shipped to Canada, where the value of our wine shipments is up nearly 25%,” he said. But exporters and industry analysts said the rosy numbers masked a more negative truth about the global wine market: There’s a huge trade imbalance.

Though the U.S. sold nearly $1 billion of wine abroad last year, it imported $4.7 billion worth, according to Fredrikson. The U.S. is a target for virtually every other wine-producing nation because it is the most lucrative market in the world, he said. Americans drink about $30 billion worth of wine each year.

High-end California vintners are having trouble breaking into many foreign wine markets abroad, where French labels still carry more prestige, he said. Much of the wine moving between the U.S. and Europe is less expensive bulk wine that companies are purchasing to bottle and market under their own labels. Fredrikson said the trade had taken on a certain irony with “these big ships of wine passing each other at night.”

Vintners, though, are bullish about exports. “We can compete very well with anywhere in the world,” said Joseph Gallo, chief executive of Modesto-based Gallo, the largest winery in the U.S. Constellation Brands Inc. of Fairport, N.Y., which owns the Ravenswood and Robert Mondavi brands, among others, said its sales of California wine grew by double digits through November.

“A lot of growth is happening with better wine at higher price points,” said Jose Fernandez, CEO of Constellation Wines North America. “It’s just not people looking for an inexpensive California Chardonnay.” Fernandez believes the low dollar has enticed overseas drinkers to sample California wine, and “once that happens, they discover that they like the quality of the wine.”

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June 1, 2007

Sonoma State unveils Wine MBA program

San Francisco Business Times reports that:

Sonoma State University, in the heart of the North Bay’s Wine Country, is offering what officials are calling the nation’s first Wine MBA program.  The school said Wednesday that the MBA program is meant to fill a growing need for winery executives and managers who understand both management techniques and the wine business’ unique needs. The program is “100 percent industry funded,” James Robinson, dean of Sonoma State’s school of business and economics, said in a statement. The university’s nine-year-old wine business program, the result of a public-private partnership between Sonoma State and the wine industry, now offers both a B.S. in business administration with a concentration in wine business strategies and the new MBA degree, with a concentration in wine business… Sonoma State’s wine business program is aided by an advisory board that includes industry executives from Diageo Chateau & Estates Wines, F. Korbel & Bros., Gallo Family Vineyards, Girard Winery, J. Lohr Winery, Wells Fargo, the Wine Institute and the Woodward-Graff Wine Foundation.

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Two Buck Chuck: five years and three hundred million bottles later

An AP report has noted that “Two Buck Chuck” -the two dollar wine sold in Trader Joe’s, has sold three hundred million bottles in its first five years of existence and now accounts for 8 percent of California’s in State wine sales:

It’s been five years since the first of these amazingly cheap chardonnays and cut-price cabernets started rolling off the line, released by maverick vintner Fred Franzia under the formal label of Charles Shaw wines.  Three hundred million bottles later, Two Buck Chuck is still selling, and Franzia is still preaching his message of wine for the masses.  ‘‘We’re not out to gouge people,’’ says Franzia. ‘‘What I would like to see is every consumer be able to afford to have wine on the table every day and not feel insecure about it.’’  The result — along with the cute ‘‘critter’’ labels and more user-friendly packaging like boxes and screw caps — has helped knock a little of the starch out of the industry, said the wine industry consultant. ‘‘I think it shook up the business in several ways, but certainly it created this interest among consumers to seek out wine values,’’ said Fredrikson. ‘‘It certainly plants a seed in everyone’s mind about what you get for the money.’’ Michael Mondavi, founder of Folio Fine Wine Partners, a Napa Valley-based importer and producer of high-end wines, takes the wine-glass-half-full approach to the Franzia effect.  ‘‘I think Two Buck Chuck has helped to make people aware that wine is not just for special occasions,’’ says Mondavi, son of California wine country pioneer Robert Mondavi and a longtime friend of Franzia’s. ‘‘I also believe that the vast majority of the people who originally start buying Two Buck Chuck, within a period of a year, trade up to better wines.’’

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April 4, 2007

U.S. Wine Exports Surge 30 Percent in 2006, Led by California

“U.S. wine exports, mostly from California, soared 30 percent in value and 4 percent in volume last year, after slipping in 2005, according to a new study of Commerce Department data by the Wine Institute trade group. Exports rose to $876 million and 404.5 million liters last year, with California generating 95 percent of the total. In Europe, where the U.S. makes more than half of its foreign sales, exports surged 48 percent by value. In Canada, they increased 29 percent. ‘This dramatic sales growth in 2006 must be placed in perspective, as it does follow a decrease in 2005,’ says Joseph Rollo, director of the international department at the Wine Institute, which represents more than 1,000 California wineries and related businesses. `Nonetheless, the long-term trend of California wine exports shows steady expansion in all major markets and growth in new, undeveloped markets. The 2006 number represents a 106 percent increase in exports by value in the last decade.’ The growth is particularly encouraging because Europe has long had a protected wine industry, with tariffs that can run 2 1/2 times the U.S. rate. `The export growth is impressive considering the trade barriers that California wineries face in markets worldwide,’ Rollo said in a phone interview, `where they have distribution restrictions and the wineries receive production subsidies from their governments’. “

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April 3, 2007

Brunton Vineyards signs Letter of Intent for wine distribution in China

Brunton Vineyards, Inc., a division of Brunton Vineyards Holdings, Inc. announced that it has received a Letter of Intent from Zhejiang Ouhai International Trade Corporation for the distribution and delivery of a minimum of 1,200 containers per year of the company’s wine brand, Addison Cole. The proposed transaction translates to approximately 1,000,000 cases of wine for the year, with an approximate annual contract value of $80,000,000. The first purchase order is scheduled to be received by mid to late April 2007, once details are finalized pertaining to label design and compliance specific to the Chinese market.

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March 15, 2007

California wine exports up

The Silicon Valley / San Jose Business Journal reports that wine sales are up: “U.S. wine exports, 95 percent from California, totaled $876 million and 404.5 million liters in 2006, an increase of 30 percent in value and 4 percent in volume compared to 2005, according to the Wine Institute International Department… ‘The dramatic sales growth in 2006 must be placed in perspective as it follows a decrease in 2005 compared to the 2004 shipments,’ said Joseph Rollo, Director of the Wine Institute International Department, in a news release. ‘Nonetheless, the long-term trend of California wine exports shows steady expansion in all major markets and growth in new, undeveloped markets. The 2006 number represents a 59 percent increase in exports by value in the last decade’.”

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March 14, 2007

Bay Area entrepreneurs buy Australian wine importer

“Mitch Clark and Jim Buckley, two Bay Area wine industry veterans with links to both Robert and Michael Mondavi, have purchased Scott Street Portfolio Inc., a wine importing company previously owned by Australia’s Evans & Tate Wine Group… The new owners are renaming the company Avanti Fine Wine Selections LLC. They also plan to expand its scope to include fine wines from California, Oregon, Washington and imports from France, Spain, Italy, Germany, Austria and South Africa, in addition to Australia.”

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