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California and the West

State's Wine Sales in U.S. Rise 3% to Record in 2005

The increase from 2004 is credited in part to the movie `Sideways' and a Supreme Court ruling.

April 05, 2006|From the Associated Press

California wine sales in the United States hit another record in 2005, a rise experts attribute to a combination of factors including the Supreme Court weighing in on wine shipments and the vino-centric movie "Sideways."

"Wine is enjoying this wonderful moment of very favorable attitudes," said industry consultant Jon Fredrikson, who compiled the figures released Monday by the San Francisco-based Wine Institute.

California wine shipments to U.S. markets amounted to 441 million gallons at a retail value of $16.5 billion, said Fredrikson, publisher of the Gomberg-Fredrikson Report. That was up 3% from 2004's record-setting 428 million gallons, which had a retail value of about $15 billion.

Total California shipments to domestic and international markets was 532 million gallons, up from 523 million gallons in 2004.

About two out of every three bottles of wine sold in the United States comes from California. Looking at sales of all wine, including other states and foreign producers, domestic sales grew by about 5% to 703 million gallons valued at $26 billion.

Sales have been growing ever since 1991 when CBS' "60 Minutes" did a story on the perceived health benefits of wine.

But the rate of growth picked up about four years ago, Fredrikson said, in part because of the introduction of "super values," such as Two Buck Chuck, the nickname of Charles Shaw wines that sell for $1.99 in California.

The success of the wine road- trip movie "Sideways," which opened in fall 2004, and last summer's Supreme Court shipping ruling -- forcing states to treat local and out-of-state wineries equally -- added to the momentum, Fredrikson said.

"I characterize it as wine finally really getting traction with the American public," he said.

Looking at wine by price, sales of wines $7 and up grew 13%, while wines less than $7 declined 2%. As in 2004, red wine edged out whites with 41.7% of the market versus 41%. Blush wine accounted for the remaining 17%.

At Joseph Phelps Vineyards in St. Helena, Calif., President Tom Shelton was glad to see sales on the upswing, but noted that U.S. consumption of wine still lagged totals elsewhere.

"Clearly, there's a lot of room for wine to continue its consumption growth," he said.

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