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California Wines Expected To Drive Industry Growth Through 2020

July 19, 2017

The U.S. wine market is expected to continue its long-term growth streak in 2017, with a modest 1.1% gain to a new record of 330 million nine-liter cases this year, marking its 24th consecutive annual increase. The industry is then projected to expand by a further 9 million cases by 2020, according to the recently-released 2017 edition of The U.S. Wine Market: Shanken’s Impact Databank Review and Forecast.

California wine brands are expected to account for more than 80% of the market’s growth this year, and are projected to outpace the industry until at least the end of the decade. Continued high double-digit growth rates are estimated this year for super-premium priced California labels Josh Cellars and Meiomi. The largest case increases are expected to come from premium three-liter boxed California wine brands, Black Box and Bota Box. Barefoot Cellars continues to be the only wine brand with retail sales exceeding $1 billion, while Franzia remains far and away the largest seller in case volume terms.

While the import category has been sluggish lately, impressive gains will continue for specific segments, such as New Zealand Sauvignon Blanc, French rosé, Prosecco and Champagne. In general, sparkling wines have outperformed still wines the past five years, and will continue to do so for the foreseeable future. This year, sparkling wines are projected to record a solid 8% increase to 22 million cases, an all-time high.

Overall industry growth has been lackluster the past five years due to tepid economic conditions, averaging progress of well below 1% annually. Indeed, per-capita wine consumption has dropped every year since 2011, as Americans have gravitated toward whiskies and cocktails. Still, total market volumes have advanced more than 50% in volume terms over the past two decades, despite two major recessions in that time span, as well as the lingering impact of the global financial crisis.

For more information, and to purchase The U.S. Wine Market: Shanken’s Impact Databank Review and Forecast: 2017 Edition, as well as other exclusive Shanken reports, visit impactdatabank.com.—Juan Banaag

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