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Californian wine under £20 boosts UK sales

Published:  09 April, 2019

US wine exports to the UK have seen a slip in value but a rise in volume, thanks largely to a growth in buyer interest in a previously difficult-to-source section of the market. 

In newly released results for 2018, the California Wine Institute noted strong volume growth of 15% vs 2017, while value dropped 1.4%.

“This is an impressive result considering that the British pound (GBP) closed the year at $1.26 against the US dollar versus its pre-Brexit buying power of $1.55 or higher,” Damien Jackman, Wine Institute trade director, UK and Ireland, said.

“These currency headwinds impacted the value/volume mix of many importers. At the same time, volume growth has resulted from growing trade interest and sales of Californian wines under GBP 20. This has been a key focus of our California Wine Institute programs in the UK and was the central theme of our recent Essential California Tasting in London which was praised by the trade for its focus.”

At last year’s Wine Stars, judges noted how difficult it was to find good quality mid–range wine from California in the UK.

Jess Puckering, wine shop manager at Old Bridge Wine, said it was difficult to find quality Pinot Noir below £30-£40 in the UK.

Christine Parkinson, head of wine at Hakkasan, also said: “Price points are extremely polarised. Very cheap wines from USA are widespread in pubs and retail, whereas in restaurants and bars the level is mainly premium and above. These wines appeal to interested consumers, but not so much to those who prefer something better-known, such as Rioja or Chablis.”

This comes at a time of a solid global performance for US wines – 90% of which hails from the Golden State.

Sales worldwide dropped 4.8% in value and 1.2% in volume in 2018 to $1.47 billion.

The institute’s president and chief executive Robert P. Koch said Californian wines performed well despite “very challenging circumstances”, including a strong dollar, tariffs and exchange rates.

Californian wine exports have grown nearly 60% by value in the past decade, backed up by exports but also growing domestic demand.

The Harvard Review recently noted that the number of US wineries has grown by 50% to nearly 10,000 just in the past decade, and its wines can command prices to rival top Burgundy and Bordeaux.

The EU’s 28-member countries remains the largest importer with $469 million in sales, followed by Canada, $449 million; Hong Kong, $130 million; Japan, $93 million; and China, $59 million.