CALIFORNIA WINE EXPORT PROGRAM Wine Industry Financial Symposium Linsey Gallagher Vice President, International Marketing, Wine Institute September 26, 2018 Napa, CA
Road Trip Video https://www.youtube.com/watch?v=lmh5abhwczc 2014 Wine Institute
International Ambassadors for California Wines Wine Institute is an association of more than 1,000 California wineries, that advocates on public policy matters and promotes the state s wines worldwide. Headquartered in San Francisco. Representation in Washington, D.C., all 50 state capitals and 16 international markets. Programs supporting California wines in more than 25 countries. Supporting sustainable winegrowing and winemaking practices. California Wine Export Program: awareness of and appreciation for California Wine around the world. 3
Growing Around the World California is the fourth largest wine producer in the world (after France, Spain, Italy) 49 of 58 counties grow winegrapes 4,700 bonded wineries, most family owned 5,900 winegrape growers 138 AVAs (American Viticultural Areas) approved by the U.S. government 110 winegrape varieties 570,000 acres (231,000 hectares) of winegrapes (less than 1% of California s total land)
85% of US wine comes from California 90%+ of US wine exports come from California California wines are sold in 125 countries 250 million 9-liter cases produced annually 4 million tons (3.6 billion kilograms) of harvested winegrapes annually
24 million tourists visit California wine regions annually 6
US WINE EXPORTS $1.53 Billion in 2017 U.S. Wine Exports In Millions of Dollars $ +70% 10 year trend $1,555 $1,494 $1,607 $1,620 $1,530 $1,295 $1,336 $1,008 $912 $1,064 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 More than 90% of U.S. Wine Exports are from California Source: Wine Institute & Global Trade Information Services, using data from U.S. Dept. of Commerce
U.S. WINE EXPORTS BY REGION +70% over past decade Continue premiumization trend Export Program primarily funded by USDA/FAS Market Access Program - ~ $6.5 million annually Country 2017 $ Exports ($ 000) % Change European Union $553,099-20% Canada $443,866 +2.9% Hong Kong $118,804 +21% Japan $94,103 +7.6% China $78,667-3.5% South Korea $25,455 +9.1% Mexico $22,544-6.3% Singapore $16,579 +22% Philippines $13,545 +2.3% Dominican Rep. $13,221 +1.5% Other Countries $137,320 +1.2% WORLD TOTAL $1,530,267-5.5% 2017-5.5% $ value -7.9% volume YTD July 2017 +1.8% $ value +1.7% volume Source: U.S. Dept of Commerce, STAT-USA. Copyright: California Wine Export Program. Preliminary numbers. History revised. *All totals include re-exported wines.
U.S. Position in the Global Market Category Rank % of World Vineyard Acreage 6 th 5.3% Wine Production 4 th 10.4% Wine Consumption 1 st 11.7% Wine Exports 7 th 4.4% Wine Imports 3 rd 10.5%
Global Wine Producing Competitors Country/Region Production HL (000) Exports HL (000) % of total production exported EU (France, Italy, Spain) 161,135 63,670 40% U.S. 24,274 4,909 20% Australia 14,750 7,017 48% South Africa 10,300 4,543 44% Chile 8,690 5,925 68%
EXPORT PROGRAM International Marketing More than 175 California wineries currently participate in the Wine Institute s International Program Wine Institute s promotional campaigns for California wine help develop markets in more than 25 countries. We provide support and guidance to wineries that export by: a Maintaining trade representation in 15 countries to provide critical market information and promotional assistance Organizing California's participation in international wine trade shows Facilitating California wine promotions in both retail and on-premise (restaurant) accounts Hosting trade, media and consumer tastings in more than 15 countries each year Encouraging coverage by top wine, food and lifestyle writers through an international media outreach effort and an active schedule of California wine country visits by foreign trade representatives. Membership in the California Wine Export Program is funded by both the USDA s Foreign Agriculture Service and industry contributions www.calwinexport.com
CALIFORNIA WINE EXPORT PROGRAM Country Priority Matrix Tier 1 Tier 2 Tier 3 o Canada o UK / Ireland o Greater China Mainland China Hong Kong Taiwan (Macau) o Japan o Mexico o South Korea o Sweden o Denmark o Key Trade Shows* GERMANY: ProWein Dusseldorf* FRANCE: Vinexpo Bordeaux* o Malaysia o Philippines o Singapore o Thailand o Vietnam o Brazil o Colombia o Costa Rica o India o Belgium o Finland o Netherlands o Norway o Poland o Russia o Switzerland
INTERNATIONAL COMPETITOR PROMOTIONAL FUNDING & TARIFFS Un-level Playing Field
US WINE EXPORTS TO CHINA +300% 10-year value trend U.S. Wine Exports to CHINA In Millions of Dollars $ YTD June $ +14% China ($38MM) +72% Hong Kong ($67MM) $81,480 $78,668 $73,031 $75,343 $71,331 $61,352 $55,742 $24,842 $19,880 $6,049 $9,269 $14,339 $34,438 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 More than 90% of U.S. Wine Exports are from California Source: Wine Institute & Global Trade Information Services, using data from U.S. Dept. of Commerce
Wine Institute Statement China Retaliatory Tariffs
GLOBAL ACTIVITY HIGHLIGHTS 2018 Mexico Vintner Tour 2018 Mexico City, Thursday, February 15 th European Spring Tour 2018 Hamburg March 12 th ; Copenhagen (Go West!) March 14 th ; London March 15 th & 16 th ProWein Dusseldorf March 18 th 20 th China Tang Jia Hui Trade Show Chengdu March 22 nd 24 th Canada California Wine Fairs April 2018 Vancouver April 9 th, Edmonton April 10 th, Calgary April 12 th, Quebec April 16 th, Montreal April 18 th, Ottawa April 19 th, Toronto April 23 rd, Halifax April 26 th China California STYLE! with Visit California week of April 9 th London Golden State Tasting May 14 th Edinburgh Tasting May 16 th Sonoma County Vintners Japan Tour May 26 th 28 th Hong Kong Vinexpo May 29 th 31 st NVV Hong Kong Trade Mission October 8 th - 11 th (Tentative) Fall Asia Tour 2018 October, proposed Hong Kong October 15 th, Guangzhou October 17 th, Chengdu October 19 th, Shanghai October 22 nd, Wuhan, Qingdao or Dalian TBD October 24 th, Taipei October 26 th ProWine China November 13 th 15 th Napa Valley Vintners London Decanter Fine Wine Encounter & NVV Events November China California Wines Master Classes: 12 Classes in 2 nd & 3 rd Tier Cities
MEDIA & TRADE VISITS TO CALIFORNIA 2018 Schedule NVV Experience Napa Valley from Hong Kong for PNV February 22nd 25th Asia Trade & Media Group week of March 5th SCV Barrel Auction with international guests April 21st Germany Sommelier & Media Group week of April 30th UK & Ireland Media & Trade Group week of May 20th NVV Experience Napa Valley JAPAN Group week of June 18th Mexico Trade & Media Group still TBD, July Japan Trade Group week of September 9th Vinexpo Explorer in Sonoma County September 23rd 25th Institute of Masters of Wine, MW Trip to California October 17th 28th SCV Sonoma Summit November During 2017: 150+ guests from 20 countries
Institute of Masters of Wine Trip to CA Showcasing wines from throughout the Golden State October 2018 Ø 55 Global MWs Ø 700 Wines Ø 300 Vintners & Spokespeople Ø 60+ AVAs
2014 Wine Institute
California Is Video https://www.youtube.com/watch?time_continue=2&v=qjpo8dteq3y 2014 Wine Institute
AWARENESS INCREASING For California Wines in China California is pulling ahead of the pack closer to France
AWARENESS, CONVERSION & CONSUMPTION - UP For California Wines in CHINA