U.S. imports less wine, but spends more

The US wine market has witnessed some significant shifts in the first half of 2023. Detailed customs data from the United States sheds light on these evolving dynamics, painting a complex picture of reduced imports yet heightened average prices.

During the first six months of 2023, the United States experienced a decrease of 8.9% in terms of wine import volume, translating to 630.7 million liters. Additionally, the total value of these imports decreased by 2.6%, amounting to $3.404 billion.

However, it's essential to contextualize these figures by noting that the first half of 2022 had set a benchmark with record import levels. Thus, when comparing the recent decline to the preceding period's all-time high, the drop appears especially pronounced.

The month of June 2023 marked a particularly challenging phase for the US wine market. A stark decline of nearly 35% was observed in wine imports, a trend evident across all wine categories. To juxtapose, throughout 2022, US wine imports had grown by approximately 3.5% compared to 2021.

Rising Prices Amid Declining Imports

Despite the volume decrease, the average price of imported wine surged by 6.9% in the first half of 2023. This indicates an increase of 35 cents, positioning the average price at $5.40 per liter.

Interestingly, while the US continues to lead globally in wine import expenditure, it has been surpassed by Germany in volume. Simplistically put, the US pays the highest prices for wine, whereas Germany consumes the most.

Breaking Down Wine Categories

• Packaged Wine: The imported packaged wine segment experienced diverse trends. Although the volume of imports fell by 4.3% to 338.8 million liters, the total value increased by 2%, reaching $2.429 billion. This indicates a price jump of 6.6%, settling at an average of $7.17 per liter. Consequently, the US is spending more on packaged wine despite purchasing less.
• Sparkling Wine: With a market value close to $806 million, sparkling wine retains its spot as the second most valuable wine import for the US. Yet, it witnessed an 8.6% decline in value.
• Bulk Wine: Despite being valued lower at $158 million (a drop of 27.7%), the volume of bulk wine imports surpassed sparkling wine, registering at 205.8 million liters versus 82 million liters for sparkling wine. The marked price disparity between the two is evident, with sparkling wine priced considerably higher at $9.83 per liter compared to bulk wine's 77 cents per liter.
• Bag-in-Box Wine: This format saw reductions both in volume (down by 9.7%) and value (a decline of 14.4%). The figures equate to 4.1 million liters valued at $11.2 million, with the average price dropping 5.2% to $2.76 per liter.

The Leading Exporters to the US

The United States has consistently been a major player in the global wine market, with its diverse palate and emphasis on quality. Recent data suggests that the country has sourced its wine from as many as 64 different global suppliers, underlining its expansive reach. However, there are discernible shifts in the power dynamics of this landscape.

Italy remains the leading wine exporter to the US, although recent figures show a decline of 9.4%, bringing their export volume to 168.4 million liters. On the heels of Italy, Canada has made a significant mark, rising as the second-largest wine supplier to the US. Primarily known for its affordable bulk wine, Canada's exports have surged by 14.7%, equating to 114.4 million liters.

France, traditionally a titan in the global wine market, occupies the third spot in terms of US imports. Their exports, however, have seen a decline of 10.2%, translating to 86 million liters.

In contrast to the declining trend showcased by these major players, both Australia and New Zealand – the fourth and fifth suppliers to the US market – have bucked the trend. Their exports have surged by 16.7% and 32.7% respectively. Chile, previously the fifth-largest supplier, witnessed a substantial decrease of 53%, relegating it to the sixth position with 34.6 million liters exported.

Spain, while being the seventh-largest wine supplier in terms of volume, has shown modest growth of 0.2%, reaching 32.6 million liters. This places it just ahead of Argentina, which has seen its exports decline by 41.6% to occupy the eighth position with 21.8 million liters.

Value Over Volume: A Deeper Insight

While volume provides an essential metric, the value of imports offers a nuanced perspective on quality perceptions and consumer preferences. France retains its leadership in terms of value, with sales nearing $1.26 billion, followed by Italy with $1.056 billion. Significantly, these two nations account for 68% of the total value of wine imports into the US for the observed period.

New Zealand cements its third position, boasting a value of approximately $343 million, marking it as the supplier with the most substantial growth in both volume and value. Spain, countering the global declining trend, has moved up the value ladder, securing the fourth position with sales of $187.5 million.

Interestingly, Canada, despite being the second-largest in volume, ranks 11th in terms of value with a mere $35 million. This disparity is attributed to the low average price of its exports, pegged at 31 cents per liter, given its predominant export of bulk wine.

Average Prices: A Gauge of Quality

France emerges as the leader in terms of average pricing, with a rate of $14.65 per liter. It is closely followed by Italy and New Zealand. Spain has made notable strides in this category, boasting an average price of $5.74 per liter. This figure not only surpasses the US market average but also eclipses other key players such as Australia, Argentina, Chile, Portugal, Germany, and South Africa.