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CALIFORNIA / News and Insight on Business in the Golden
State | THE STATE / AGRICULTURE

Sales of California Wines Reach All-Time High

March 31, 1998|Martha Groves

Sales of California wines surged last year by 11% to an all-time high of $5.9 billion, according to Gomberg, Fredrikson & Associates, a research and consulting firm in San Francisco. Volume sales of California wines grew just 1% last year, reaching an estimated 410 million gallons. Fueling the growth have been the strong economy, changing consumer attitudes, high-quality vintages and booming export growth, said Jon Fredrikson, a principal in the firm. Positive news about the health benefits of consuming moderate amounts of wine has also contributed. However, Fredrikson noted, rising prices for wines, spurred by a grape shortage, have dampened demand. Barring weather damage, this year's harvest promises to be large, given the recent plantings. That could send prices into "the lower reaches" and spark more demand, Fredrikson said. "Four-to-five-dollar Merlot is really going to fly off the shelf," he added. Cabernet Sauvignon and Sauvignon Blanc, he suggested, will continue to be in short supply.

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