The United States of America (USA) is the world’s biggest wine market. According to Shanken’s Impact Databank, 327 million cases of wine were consumed in the USA in 2017. The International Wine and Spirits Record (IWSR) has forecast the USA market to grow by an additional 20 million cases by 2022, with the growth coming at the premium end of the market.
The USA is Australia’s second biggest export destination by value. In the year ended December 2018, exports to the USA declined by 5 per cent in value to A$425 million and 7 per cent in volume to 161 million litres (17.9 million 9-litre case equivalents). As the volume decline outpaced value decline, average value increased by 1 per cent to A$2.64 per litre FOB.
However, there were signs of the decline easing at the end of the year. In the last quarter of 2018, value increased by 1 per cent compared to the same quarter in 2017. While this shift may be small, the most recent trend is a contrast to the negative quarterly growth rates at the start of 2018, as illustrated in Figure 1.
Figure 1: Rolling quarterly value growth rates to the USA
The biggest growth segment is wines priced from A$7.50 to A$9.99, which grew by 40 per cent to A$19 million. It is also pleasing to see the above A$10 segment improve on recent performance; it increased by 21 per cent on a quarterly basis.
Australia’s positive performance in-market continues. According to IRI Worldwide and Nielsen-CGA, Australian wine is growing in both the off-trade and on-trade markets by 4 per cent in value to US$521 million and US$269 million respectively. The price segments that are driving Australia’s growth in the off-trade are US$8 to US$10.99 per bottle (up by 93 per cent) and between US$15 and US$24.99 (up by 14 per cent).