CALIFORNIA, A JOB WELL DONE

California’s wine sales hit another record in 2005. The state’s U.S. wine shipments amounted to 441 million gallons, while retail value went up 3% from 2004 to approximately $16.5 billion. Total California shipments to domestic and international markets reached 532 million gallons, up from 523 gallons in 2004. Industry insiders are attributing California’s success to the Supreme Court ruling on direct wine shipments and the popular movie “Sideways,” a wine-centric Indie film. "Wine has enjoyed the most positive image it has had in years from consumers, the media and government," said Robert Koch, President and CEO of Wine Institute. "The May 2005 U.S. Supreme Court decision on direct-to-consumer sales not only benefited U.S. wineries, but had a favorable impact on public opinion and awareness of wine." The recent introductions of super-value wine, or Two Buck Chuck, along with creative labels also improved wine’s popularity and accessibility. “The availability of more approachable, easy drinking "user-friendly" wines with memorable labels and affordable prices has made wine more interesting and attractive to greater numbers of American adults," said Jon Fredrikson, publisher of the Gomberg-Fredrikson Report.

Overall, 2/3 wine bottles sold in the United States come from California, while domestic sales increased 5% to 703 million gallons. Premium brands continue to excel in all alcohol segments as consumers keep on trading up. Sales of wine costing $7 and above increased 13%, accounting for 35% of the case volume and a 66% of winery sales revenue, while wine under $7 declined 2%, representing 65% of the volume and 34% of revenues. Red wine faired better than whites in food stores with a 41.7% increase versus 41% according to ACNielsen. Pinot Noir, “still benefiting from the ‘Sideways’ effect,” rose 70% while Chardonnay sustained its place as the top-selling variety followed by Merlot.