World Of Difference

Imported wine sales continue to expand, fueled by an increasingly sophisticated consumer base.

Imported wines to the U.S. exceeded 100 million cases in 2017 (Argentina’s Valentin Bianchi Vineyards pictured).
Imported wines to the U.S. exceeded 100 million cases in 2017 (Argentina’s Valentin Bianchi Vineyards pictured).

With an import-heavy wine list rotating on a weekly basis, MJ’s Wine Bar in Portland, Maine is consistently seeking new wine experiences for its clientele. “We strike a balance of Old World and New World wines—at about a 50/50 split—because the two categories have such distinct characteristics with a lot of variation,” says Mark Ohlson, owner and sommelier at MJ’s. When crafting a new menu, Ohlson prefers to seek out smaller, off-the-beaten-path producers from around the world.

Since opening about five years ago, MJ’s has expanded its by-the-glass program to about 50 options—as well as half glasses, flights, and a weekly tasting for sommeliers and interested consumers. Some recent options include Luis Pato Baga Bruto rosé from Portugal ($11 a 12-ounce glass; $44 a 750-ml.), Sauvion Chenin Blanc from Vouvray, France ($10; $40), Tikveš Vranec from Macedonia ($10; $40), and Nicolis Ambrosan Amarone from Valpolicella, Italy ($28; $95).

The imported wine market has been on a steady upward trajectory. Last year, total table wine imports to the U.S.—including bulk and bottled imported wine—blew past the 100-million-case mark on a nearly 6% rise, according to Impact Databank.

Among the leading import countries of origin, both European and non-European categories have showed healthy progress. Italy once again was the leading import market with a 35% share of last year’s total bottled imports, while second-ranked France shot ahead by 19% in volume and Spanish imports grew by 14%. Bottled imports from Australia, Chile, and Argentina were all in decline in 2017, however, while New Zealand continued to grow. South Africa was up 8% at just under 1 million cases sent to the U.S. market.

San Jose, California-based wine retailer Vintage Wine Merchants sees a strong import category even in the Golden State. The retailer says domestic wines move quickly and account for half of the store’s sales, but imports make up more than half the inventory, with France being the biggest category. “The euro-U.S. dollar exchange rate hasn’t been favorable of late, but considering the rise of prices in Napa Valley, we’ve found good relative value in Bordeaux and Tuscany,” says Vintage Wine Merchants owner Harry Fong. “Many Napa wines have breached their price ranges and have been pushed to the next tier without a replacement, but for someone wanting a $50 wine there’s still good value in Tuscans and fourth- and fifth-growth Bordeaux.”

Champagne and sparkling wines are also a large part of Vintage’s business, with a sweet spot of around $20-$35. Fong notes that Rhône red wines continue to be very strong at under $30, while Burgundy and selections from southern France are consistently popular with the store’s clientele.

While New Zealand brands like Craggy Range (Hawke’s Bay vineyard pictured) have enjoyed booming popularity in the U.S market thanks to Sauvignon Blanc, they’re now looking at new varietals like Pinot Noir.
While New Zealand brands like Craggy Range (Hawke’s Bay vineyard pictured) have enjoyed booming popularity in the U.S market thanks to Sauvignon Blanc, they’re now looking at new varietals like Pinot Noir.

Unshakeable Old World

While imports from some non-European markets faced challenges in 2017 as bulk wine shipments faltered, Old World imports showed considerable progress. As the second-largest bottled import market—and fourth-largest overall when including bulk shipments—French wine imports grew by 2.2 million cases last year to around 14 million cases, according to Impact Databank. With 98% of its U.S. exports comprising bottled shipments, the country is poised to benefit from a number of trends currently guiding the U.S. wine market higher in value. And with a solid footing in the white-hot rosé and sparkling segments, French imports are experiencing a new growth phase in the U.S. market.

Consumers have shown an inexhaustible curiosity for discovering new winegrowing regions and styles. France’s Conseil Interprofessionnel des Vins du Languedoc (CIVL) has been working to show that there’s still much to discover within the traditional winegrowing country. “Languedoc can be described as the New World of the Old World,” says Christine Molines, marketing director for the CIVL. “There’s a lot of opportunity for innovation here and producers are working to meet new trends, while integrating and respecting tradition.”

The CIVL notes that the Languedoc has a prominent presence within several trending categories, including rosé, red blends, sparkling wines, and dry French whites. The majority of its red wines are also priced in the fast-rising $15-$30 pricing segment. Languedoc produces around 80% blended red wines, which employ several grapes that U.S. consumers are already familiar with—such as Syrah and Grenache—as well as lesser-known varieties like Mourvèdre and Carignan. After Champagne, the region’s Limoux appellation is one of the most exported for French sparkling wines, with traditional sparkling options such as Blanquette and Crémant de Limoux. Producers in Languedoc have also increased production of rosé to compete with neighboring Provence, with 13% of AOP production and 32% of IGP production in rosé, according to the CIVL. The trade group is hoping to increase exports of Languedoc wines by at least 15% in volume and value. In the calendar year of 2017, export volume of Languedoc AOP wines grew 26% over the same period in 2016, while value increased 38%, according to the French department of agriculture.

Italian imports to the U.S. far exceeded any other import category last year, as the country inched closer to 28 million cases—about 97% of which were bottled shipments. While trends for rosé and red blends are driving the French imported wine category, Italy remains competitive with options like Prosecco. In 2017, total sparkling wine dollar sales grew 6.4% in IRI channels, while Prosecco outperformed the category with 21% growth to $212 million.

Constellation Brands’ Italian label Ruffino, led by high-end Chianti wines, also offers consumers sparkling options, which the company says is driving overall growth for Italian wines. “We believe imported wine growth will remain healthy and continue to outpace domestic wine growth in the near term because of the strength of categories like sparkling and rosé,” says Chris Stenzel, president of wine and spirits at Constellation.  Last spring, Ruffino relaunched its Il Ducale Toscana IGT ($18 a 750-ml.) as a modern Italian red blend made up of 60% Sangiovese, 25% Merlot, and 15% Syrah and tailored to U.S. consumer preferences. Constellation is keeping an eye on trends in white wines as well, noting that Friuli’s cool-climate wines are gaining recognition and growth as high-quality imported white wine options. “We’ve long been excited by the quality in Friuli, and last fall Ruffino released the Il Ducale Pinot Grigio ($18), a bright, crisp wine from the region that’s been performing very well since the launch,” says Stenzel.

The German wine category, the majority of which is bottled, also showed solid growth last year, rising 6.5% to 2.3 million cases. Spain, meanwhile, showed the highest growth rate after France for bottled table wine imports last year at 14.3% to just under 5 million cases, according to Impact Databank.

Portuguese wines also have been on the rise, with shipments of the country’s imported bottled wines up 8.1% to 1.6 million cases. Ohlson from MJ’s wine bar explains that while wines from Portugal often provide a great value proposition, more work needs to be done to raise awareness of the region. “Consumers have trouble delineating one wine from another because they’re all indigenous grapes and almost all are blends. The U.S. market doesn’t really know how to describe them,” he explains. “Portugal is slowly stepping into French growing techniques and they’re using modern technology, so the category is showing a lot of promise.” He also notes that the popularity of dessert wines has been slowly increasing among MJ’s clientele. The menu typically offers about 15 dessert wines by the glass, with Port comprising about half of the red dessert wines.

Imported wines reign supreme at MJ’s Wine Bar in Portland, Maine (MJ’s wine course pictured), where there’s a roughly 50-50 split between Old World and New World, as well as a focus on lesser-known regions.
Imported wines reign supreme at MJ’s Wine Bar in Portland, Maine (MJ’s wine course pictured), where there’s a roughly 50-50 split between Old World and New World, as well as a focus on lesser-known regions.

Ambitious New World

While Old World wines occupy a healthy slice of the U.S. market, New World wines are showing strength in strategic corners. Australian wines, while declining in bottled shipments in 2017, have been making a comeback in the U.S. market at the more premium end of the category. Since taking a hit after the 2008-2009 financial crisis, Australia has been reclaiming its position in the U.S. in value terms as consumer awareness of Australia’s various winegrowing regions advances. “Our efforts have been focused on providing education about what’s in the market, and creating an appetite for some of those companies that either were here and want to come back, or see this as a good time to enter the U.S.,” says Aaron Ridgway, head of marketing for the Wine Australia trade group.

Part of that outreach effort has involved highlighting the diversity of Australia’s regions, as well the growing confidence of the country’s winemakers to experiment and create wines reflective of the land. Wine Australia notes that many of the country’s winemakers are creating wines in line with trends toward lower alcohol levels, while Australia’s signature Shiraz grape, which comprises about 26% of the country’s plantings, satisfies the U.S. wine market’s taste for fruit-forward red wines. Winemakers are also producing higher levels of Pinot Noir and Chardonnay in addition to Shiraz. With the exchange rate currently 75 cents per Australian dollar, the competitive advantage for Australian imports remains strong.

New Zealand has also been a Southern Hemisphere success story, largely thanks to the surging popularity for its Sauvignon Blanc wines. The New Zealand Winegrowers Association recently reported that the country now ranks as the third-largest wine importer by dollar value to the U.S., reaching $422 million on a 6% rise over 2016. The country is aiming for total wine exports to reach $2 billion in 2020. The trade body says Sauvignon Blanc leads exports to the U.S., but Pinot Noir, Chardonnay, Pinot Gris, and Syrah are picking up steam.

As vineyards mature across the country, an increasingly developed array of styles is shining through. “Since the U.S. emerged as New Zealand wines’ largest export market over the past decade, it’s become important to distinguish our wines from U.S. domestic offerings,” says Matt Stafford, chief winemaker at Craggy Range, which has vineyards in Hawke’s Bay and Martinborough. “Ensuring that the yields are in check to allow for more fruit concentration and softer acid profiles in the wines is key.” While its Martinborough vineyard is well-suited for Pinot Noir, Craggy Range’s Gimblett Gravels vineyard in Hawke’s Bay produces a Syrah that has been a big success for the company, according to Stafford.

Constellation is also a major player in New Zealand wine. Its Kim Crawford brand has long dominated the New Zealand category, and the brand reached 1.27 million cases last year after a 10% volume rise. The company is now showing off the brand’s high-end credentials with a new Signature Reserve range beginning with a Sauvignon Blanc ($25) from the lower Wairau sub-region of Marlborough. “New Zealand wines continue to command a price premium of almost double the overall imported category, indicating that consumers recognize and are willing to pay more for the quality and consistency New Zealand offers,” says Constellation’s Stenzel, who also notes that New Zealand rosé is surging ahead, with sales ten times higher in 2017 over the previous year, according to IRI data.

Old World exporters Italy and France continue to dominate the U.S. import charts, with current trends highlighting rosés, particularly those from Languedoc (CIVL Boutenac commune), and Prosecco.
Old World exporters Italy and France continue to dominate the U.S. import charts, with current trends highlighting rosés, particularly those from Languedoc (CIVL Boutenac commune), and Prosecco.

As the second-largest overall imported country of origin—with bulk wines included—Chile saw a decline of 4.1% in bottled shipments to the U.S. and a decline of 15.6% in bulk shipments, which make up about a 60% share of Chilean imports, according to Impact Databank. Argentina also experienced declining shipments to the U.S., down about 6% in bottled and 29% in bulk imports. But like Australia, producers in Argentina are pointing to prospects in more premium Argentine wines. “We’ll be seeing more varietal diversification from Argentine wineries with the same quality-price ratio that helped drive the popularity of Malbec,” says Dennis Kreps, co-owner of Quintessential Wines, which imports the popular Argentine brands Valentin Bianchi and Pascual Toso. “Cabernet Sauvignon from Argentina, priced between $20-$40, will provide more enjoyability than many other similarly priced wines from other countries as better farming practices are employed.”

Despite the strength of the domestic wine market, imported wines from all over the globe continue to appeal to adventurous consumers seeking quality and value. Fong from Vintage Wine Merchants notes that while California Cabernet still reigns in terms of sales, most of his customers are eager to try popular styles of imported wine, like Champagne. “We’re looking forward to exploring English sparklers and getting reacquainted with Australia,” Fong says.

MJ’s Wine Bar in Maine is looking to introduce lesser-known imported options, like wines from Eastern Europe or Lebanon. “It’s a very complicated world with lots of wines from all over, so we try to take the time to explore it, and take out some of the smoke in mirrors while doing so,” Ohlson says.