California Wine Losing It?

Filed in archive California Wines on December 9, 2006

Because of the shear size of California, the largest state in the United States, it has a lot of impact on the rest of the nation, and believe it or not, that includes its wine industry. It has boomed over the past few years due in part to marketing efforts and the fact that, well, just more people are drinking wine these days (yippy!). However, according to a recent survey, that may be slowing down in the near future.

From Report toasts state wine industry:

California's wine business packs a solid economic punch, according to a report released Thursday, but shifting trends and worrisome challenges could stunt the industry's growth.

The industry over a three-year period from 2002 through 2005 created more than 100,000 jobs in California, and also generated rising wages, sales, tourism, taxes and charitable contributions. But competition from foreign importers, coupled with consolidation in the industry, poses big obstacles for california wineries.

Wines produced in the state generated an economic impact valued at $51.8 billion during 2005 in California, as measured by a combination of revenues and wages, according to a study by MKF Research LLC. That's 14 percent higher than the $45.4 billion MKF previously estimated for 2002.

"The economic impact of California wines is growing steadily," said Robert Koch, president of the Wine Institute. "California also positively impacts the economies of the other 49 states."

California wines created nearly as great an impact on the remainder of the nation, with a total value of $51.5 billion in revenue and wages, the report released by the Wine Institute and the California Association of Wine Growers found.

"Wine is hot," said Barbara Insel, who produced the report for St. Helena-based MKF, which consults for the wine industry.

Perhaps the largest challenge could come from overseas.

"California has been losing market share, and imports continue to claim gain share," Insel said.