What’s happening in the USA, the world’s largest wine market?

The latest report from Wine Intelligence rates the USA as the most ‘attractive’ wine market in the world – not surprisingly perhaps as it is the largest market and imports make up a third of wine purchased. Furthermore, it is wealthy and has a relatively high per capita wine consumption.

Wine Australia’s Export Report Sept 2016 shows that Australian wine exports to the USA grew in value by 4 per cent to A$448 million compared with the previous 12-month period. In contrast, volume has declined. The USA Export Market Snapshot shows that 95 per cent of the volume is exported under A$5 per litre and weakness in this category is affecting aggregated figures. It is the price segments above A$5 per litre that are leading the way in terms of growth. These trends can also be seen in retail data provided by IRI.

IRI’s comprehensive data on off-trade sales also indicates that Australia’s performance in the USA in the 12 months to end September 2016 has been weak from an aggregated point of view. Total Australian off-trade wine sales were down by 5 per cent to US$546 million compared to the overall market, which was up 3.6 per cent to US$12 billion.

However, again there has been some nice growth in the middle price segments (US$8–25 per bottle). The best performance was in the US$8–11 (up 24 per cent) followed by US$20–25 (up 10 per cent). There is also further evidence of consumers trading up in the wider market – with sales of wine under US$8 in decline, whereas above segments are increasing at generally faster rates as the wine price increases.

For imported Australian wines, Cabernet Sauvignon, Pinot Grigio, Moscato and Sauvignon Blanc were the varieties that showed some positivity across all price segments.

However, recently published articles on Australian wine in North America, along with research commissioned by Wine Australia, indicate that positive sentiment for Shiraz among trade and consumers is still on the rise. Given our history with this variety, there’s a good case to be made that it represents our best opportunity for success. Some 35 per cent of our wine exports world-wide are Shiraz, however, it only represents 23 per cent of exports to the USA.

In a recent blog, Aaron Ridgway, our Head of Market, Americas, provided some tips and suggestions for re-contextualising Shiraz and giving it a fairer chance in the US.