USA BUSINESS Flashcards
How does the USA rank in terms of wine production?
4th largest
after Italy, France, Spain
Break down US production by region.
California 80%
Washington 5%
New York 4%
Oregon 1.4%
Describe the importance of brands to US wine marketing.
Very important
- in the absence of well-known appellations wines were marketed using doppelganger names e.g. “California Burgundy”
and their producers brands which were advertised with celeb endorsements e.g. Gallo
Describe the history of production in California.
To what extent was this expansion accompanied by changes in quality?
Plantings grew rapidly along with population expansion 1860-1900
Prohibition + economic downturn paused expansion
Demand revived in 60s - number of wineries grew from 240 in 1970 to 4000 by 2014
Q greatly improved with better use of varietal plantings to match microclimate, improved winemaking and higher consumer involvement
Where else in the US has winemaking expanded?
Ohio, NY, Virginia - plantings from VV and French hybrids like Seyval Blanc
Mid-west e.g. New Mexico, Texas
Northern state e.g. Michigan, Minnesota, Wisconsin planted with Riesling + hybrid Brianna
Broadly speaking what are three key challenges to US wine production?
- Global warming - drought, forest fires in warmer areas
- Irregular climate conditions more generally
- Restrictions on the sale of alcohol across state borders
To what extent do AVAs restrict grape growing or winemaking practices?
Not at all - simply define the geographic area of wine production
Why does the US rank #4 in terms of wine production (24 m hL) but #8 in terms of export by volume (3.5 hL)?
How much of US wine consumption is imported?
domestic consumption is high
small % of volume is exported
US imports 38% of total consumption
Why is the distribution and sale of alcohol in the US complex?
How have smaller producers attempted to get around these rules?
Three-tier system preventing direct producer → retailer sales
Differing rules in all 50 states
Small-medium sized wineries use DTC sales via wine clubs and cellar door where allowed
How much of California’s production is exported?
10’s%
Describe typical production structures.
- Large wine-producing companies who own vineyard and purchase grapes from growers across state → produce variety of wines
- Small estate wineries - cult wine producers
Outline factors in price of grapes (3).
- AVA - certain districts command premiums e.g. Cab from Napa 10x price of Lodi
- Grower reputation - some growers have prestige which commands prem
- Consumer demand
Which parts of California’s labelling laws differ from Federal labelling laws?
State 100% from California (>75% in Federal law)
Vineyard name >95% from named site
Estate bottled if vineyard and winery are in the same AVA - ridiculously flexible given the size of some AVAs
Compare the size of Oregon’s production to California.
How large are most producers?
How do producers acquire grapes?
Small → but rapid growth
Small - 75% produce <5,000 cases
Many are estates - 52% use own grapes
How important is DTC for Oregon wine?
Where is Oregon wine sold?
- Very important ~25% sold DTC including tasting rooms, wine clubs and online orders
- 16% sold in state - hospo + retail
- 60% in rest of US
- 2.5% exported - Canada, UK, Japan
