Wine Exports Rise 17% on Weak Dollar

A cheap dollar helped make 2003 a very good year for California wine exports.

Overseas shipments of U.S. wine -- more than 90% of it produced in California -- jumped 17% last year to $643 million. That was the biggest annual increase since 1998, according to a report released Monday by the Wine Institute, a trade group based in San Francisco.

The report was the latest bit of cheery news for California’s wine industry, which is recovering from a three-year slump because of a surplus of grapes and heightened global competition.

Wine Institute executives attributed the export gain largely to growing consumer demand for California wines and the introduction of new products.

The biggest factor, though, may have been the exchange rate. Last year the U.S. dollar fell against major currencies such as the British pound and the euro. A fall in the dollar makes American-produced goods cheaper for consumers abroad.

California wine deliveries rose across Europe last year. Britain was by far the top export market, generating one-third of the $643 million in foreign sales. Exports to Canada increased 21% to $112.4 million. Shipments to Japan slipped 6% to $76.3 million as consumers there opted for lower-priced wines.

“Wine exports are a growing part of the California wine business,” said Robert Koch, the Wine Institute’s president, noting that exports accounted for 15% of the state’s total production in 2003. Last year’s exports were more than triple the value of such shipments a decade ago.

“I definitely see [exports] becoming more important,” said Vic Motto, a partner at MKF Group, a wine-industry consulting firm in Napa Valley. He said that it appeared the export increase last year wasn’t just because of the dollar but also stepped-up marketing.

Eric Wente, chief executive of Wente Vineyards in Livermore, Calif., said his company would be focused this year on Europe, Canada and Japan. “We’re making an equal number or more trips,” he said. Last year, Wente’s shipments overseas dropped slightly because of weakness in tourism in parts of Asia. But that’s coming around, he said, and with the dollar expected to stay low, Wente is projecting a pickup in its key export markets this year. Exports make up about half of Wente’s shipments.

“I’m feeling pretty good about things going forward,” he said.