Global supply chain issues have dominated news cycles since the start of the pandemic in March of 2020. According to WhiteHouse.gov, over 50 percent of manufactures in industries from accommodation and food services to wholesale trade and retail trade have reported supply chain disruptions. One industry however, found the opposite to be true. In 2021, U.S. wine exports surprisingly grew by over 10 percent, resulting in the largest annual gain in eight years, with over $1.4 billion in reported revenue. California remains the largest wine-producing region in the United States, producing 95 percent of exports.
According to the Wine Institute, which gathers data from Trade Data Monitor and the U.S. Department of Commerce, the United States wine export market has grown by over 16 percent since 2013. Wine Institute President and CEO Bobby Koch stated in a press release that “we are very pleased to see our exports return to growth after several challenging years, and we are grateful for the administration’s diligent work to address a number of trade irritants.”
These trade irritants go beyond the restrictions from the Covid-19 pandemic. The European Union dominates world market production of wines, accounting for 60 percent of all wine produced year-over-year; The United States by comparison, while still the second largest wine-producing region in the world, only accounts for 10 percent. This leads to issues with exporting U.S. wine when it comes to preferential market access — there are free trade agreements already in existence between the EU and other countries, making it extremely difficult to compete when it comes to exporting. Further “trade irritants” include, but are not limited to, import tariffs, import licensing and costumes clearance requirements, and foreign wine producer subsidies.
Despite these challenges, the U.S. wine export industry has been able to hold strong. In the past year, eight of the 10 largest markets for U.S. wine exports have grown with Canada’s market share of 35.6 percent being the largest driver of growth, gaining value of 11.5 percent in 2021. The two markets that did not experience growth, the United Kingdom and the European Union, declined in size due to shipping challenges in the supply chain.
Vice President of international marketing for the Wine Institute stated in the same release that “while we continue to see some challenges in the international marketplace for U.S. wine exports, we’re encouraged export data shows a trend toward countering the impact of the global pandemic, retaliatory tariffs, unfavorable exchange rates and other external circumstances.”