SACRAMENTO -- U.S. wine shipments rose 2 percent last year to 363 million cases, but foreign wineries continue to capture a growing share of the lucrative American wine market.
It all adds up to ample choices and relatively stable prices for U.S. wine consumers, wine analyst Jon Fredrikson said Wednesday in a presentation at the industry's largest trade show.
"This market was brutally competitive," Fredrikson told a crowd of 1,200 wine industry executives gathered at the annual Unified Wine &amp; Grape Symposium in Sacramento.
Federal regulators approved 126,000 new wine labels last year, providing consumers with an array of choices in the wine aisle, Fredrikson said.
Increasingly, they are walking away with wines made overseas. Imports now account for 35 percent of the wine sold in the U.S. by volume, Fredrikson said. Short harvests and high grape prices in California in 2010 and 2011 drove both wineries and consumers to look for for value-priced alternatives overseas.
Argentina was the greatest supplier of bulk wine imports to California, followed by Chile and Australia, said Glenn Proctor, a partner and broker with Ciatti Company. New Zealand could become a larger player in coming years, because the country boosted its planted vineyard acreage by 23 percent from 2007 to 2010, and is appreciated as a producer of sauvignon blanc, he said.
As wine consumption declines in France and Italy, foreign vintners are targeting American consumers. The U.S. is now the largest wine market in the world, consuming 13 percent of the wine produced globally, Fredrikson said. But despite the growth of wine, the beer market is still eight times bigger than the wine market, he said.
"Wine . . . is still small, compared to other categories," he said.
There will be even more California wines for consumers to choose from in the future. While the numbers are not yet final, the 2012 harvest appears to be the largest on record, said Nat DiBuduo, president of Allied Grape Growers. The California crop will likely weigh in at 3.8 million tons, compared to the state estimate of 3.7 million tons, he said.
"If we get our numbers, it should be the largest crop in history," DiBuduo said.
Growers are continuing to plant new vineyards and replant older vineyards, which could lead to even larger harvests in the future. Growers purchased enough vines to plant or replant 27,000 to 36,000 acres of vineyards, based on a survey of nurseries, DiBuduo said.
"I suggest we all exercise caution to avoid oversupply," DiBuduo said.
In the North Coast and other regions, prices of bulk wine are already declining after shortages drove up prices over the past two years, Proctor said.
"It's a balanced market. We think that's a good thing," Proctor said. "Prices are stabilizing. I just don't see the craziness we saw last year."
About 12 percent of wineries raised retail prices last year, passing along higher costs for grapes used primarily to make higher-priced bottles, Fredrikson said. But lower-priced wineries are starting to test pricing, too.
Earlier this month, the Charles Shaw brand -- better known as "Two Buck Chuck" -- went up in price in California by 50 cents, its first increase in 11 years.
Fredrikson commended E&amp;J Gallo Winery and Constellation Brands, based on their growth in both volume and value.