Recession and Drinking Pair Well for California

Frugal drinkers buying bargain bottles keep vintners level


California winemakers should be raising their glasses in a cautionary toast upon recent news that even in a poor economy, people drink.

The Wine Institute on Thursday announced that California winemakers shipped nearly the same amount of wine in the United States last year as they did in 2008 but consumers bought lower priced wines because of the recession.

"Although consumers were cautious in their spending last year, the underlying consumer trends in the U.S. have kept wine on the dinner table during this tough economy." Robert Koch, president and CEO of the Wine Institute said. "The baby boomer generation has enjoyed wine for decades and now millennial consumers, who grew up in families who served wine, are also showing an affinity for wine."

California vintners shipped 467.7 million gallons, or 196.7  million cases, of their wine to the U.S. wine market in 2009. That was up a drop -- 0.2 percent increase over 2008. The estimated retail value of the 2009 wine sales was $17.9 billion, down three percent from 2008 as consumers bought lower priced wines.

But, restaurants suffered as a result of frugal diners, who opted to stay home and sip on  lower-priced bottles -- sales of wine in restaurants were off between six and nine percent.

Cheaper bottles of wine also meant an upside for stores, as sales of American-made brands  there increased by 2 percent, according to The Nielsen Company. The ever-famous "two buck Chuck" and other inexpensive bottles -- up to $7 for 750 ml -- helped keep vintners afloat last year, the numbers show. Foreign sales were flat.

The overall wine winner last year was Chardonnay, as its supermarket sales accounted for 22 percent of the share. Cabernet Sauvignon sales were up  12 percent;  Merlot, 11 percent; and White Zinfandel, a popular entry-level favorite, brought up the rear with its sales accounting for 8 percent overall.

California wine shipments here and abroad decreased 1.2 percent to 563 million gallons. Worldwide U.S. wine exports, 90 percent of which were from  California, fell 9.5 percent in value in 2009, the Wine Institute found.

Bay City News contributed to this report.

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