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US Wine Exports, Bulk Imports Drop – Rabobank

July 18, 2013 | Filed under Worth A Look | Posted by

Excerpts from The Rabobank Wine Quarterly—Q2 2013.
For a copy of the full study, contact: Stephen Rannekleiv, stephen.rannekleiv@rabobank.com

US SUPPLY UPDATE

“US production is in its early stages but appears to be advancing well. Early forecasts point to healthy yields in 2013, but not as large as last year’s bumper crop.

“High grape prices have led to an increase in vineyard planting and renewals. Allied Grape Growers estimates that in 2012 nurseries sold vines to plant approximately 30,000 acres (12,000 hectares) for the spring of 2013, though how much was for new vineyards versus vineyard replanting is not clear. By several reports, there is still pent- up demand to plant additional vineyards in California that is being held back by two factors: nurseries running short of plant stocks and rising land prices. Agricultural land is currently being bid to record high levels as farmers seek to expand highly profitable almond production.”

US EXPORTS

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“US export volumes declined 3% in Q1 2013. The positive impact of a 14% increase in bottled wine exports was more than compensated by the 20% decline in bulk exports. Canada remains the largest market for US bottled wines by value, and continues to register healthy growth (+28% value growth). The UK also registered healthy case volume growth (+28%), though at much lower prices. Other markets where US bottled wine exports registered strong growth include China, South Korea, Mexico, Panama and Malaysia.”

US IMPORTS

“In what may be interpreted as a marked departure from recent trends, US imports of bulk wine declined (-17%) during Q1 2013, while bottled wine imports grew (8%) (see Figure 4). Growth in bottled wine imports from Italy and France accounted for more than half of the approximately 1.3 million case increase in bottled wine imports.”

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“Australian bottled wine, which has struggled in the US market recently, has enjoyed some improvements, with bottled wine exports growing 5%, even as average pricing mildly improved (1.2%).

“Bottled wine import volumes from Argentina rose 7%, with average pricing up 5%. Bulk wine imports, however, declined 50%, dragging total volumes to the US market down by 31%.

“New Zealand continues to enjoy strong success in the US market, with volumes growing 21% in Q1, but perhaps the biggest and most surprising growth stories in US bottled wine imports continue to be Spain (+17%), Portugal (+38%) and South Africa (10%).”

BULK WINE PRICING

“With few exceptions, bulk wine pricing is beginning to ease across most regions and varietals. In spite of the declines of the past several months, pricing in Europe remains high by recent historical comparisons. For countries such as Chile, the recent decline appears to be an acceleration of a trend in declining prices that began as early as mid-2011.”