US wine market sees volume growth slowing, but value growth continues to rise, Rabobank says

By Erin Smith

Published: 14 April, 2015

The American wine market is slowing in terms of volume growth, despite continued expansion throughout 2014, according to Rabobank's Wine Quarterly Q2 2015 report. But a report from the financial service agri-food team said US value growth is actually accelerating, making it a desirable market for premium brands.

The report said the US wine market continued to expand in 2014 though volume growth (under 2% by most estimates) which was "well below" rates seen in previous years. "Value growth, on the other hand, accelerated at a faster pace, as all growth was generated from wine priced above US$ 9 per bottle."

The challenges for most importers is not just trying to initially break into the US, but having to continuously compete with premium brands within the domestic market. The competition in the US is fierce and imports actually declined in 2014.

"With broad availability of good-quality domestic supplies, domestic wines outperformed imports for 2014. Total US import volumes decline 2% for the calendar year 2014," it said.

However for those international wine brands which have been able to grab a foothold in the US market "value trends were positive (2%)," according to Rabobank's figures.

Even with the drastic strengthening of US currency in the later half of 2014 which has made importers more competitively priced, the quality of wines within the domestic market still could pose a challenge.

The report said: "The dramatic strengthening of the US dollar in the second half of 2014 may create a more favourable context for imported wines in 2015, but the broad availability and good quality of the current domestic supply will continue to make the market highly competitive."

Australians wines within the US market found 2014 particularly challenging with volumes declining by 8% and value declining by 10%. Argentina equally had a challenging year in the US market, which until 2014 has seen positive growth trends for a number of years. Argentina's total import volume declined by 15% and value decline by 7%, according to report.

New Zealand wines however continue to gained substantial ground in the US market with an increase of 19% in volume and 17% growth in value.

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