Global Wine & Spirits - Market Reports 2013U.S. WINE MARKET

by Marie-Claude Veillette www.globalwinespirits.com

MARKET TRENDS & ONLINE WINE SALES IN THE UNITED STATES

1 U.S. WINE MARKET

TABLE OF CONTENTS

2 THE UNITED STATES: THE WORLD’S LARGEST WINE- CONSUMING NATION2 1.1 Imports3 1.2 American « Wine Monopoly »4 1.3 Wine Production5 1.4 Exports5 1.5 Market Trends: Sparkling Wines and Rosé on the Rise7 1.6 Average Sale Price 8 1.7ConsumerProfile

8 LAWS AND REGULATIONS9 2.1 The Three-Tier System9 2.2 Direct Wine Sales

10 RETAIL TRADE & ONLINE SALES10 3.1 Key Wine Retailers in the Country11 3.2 Online Wine Sales 11 3.3 Key Online Retailers13 3.4 Types of Online Wine Retail Websites13 3.5 The Importance of the Scoring System in the Online Wine Purchase Process

15 THE IMPORTANCE OF DOING BUSINESS WITH PROFESSIONALS16 4.1 Major Wine Events17 4.2 General Information on the United States17 4.3 Laws and Regulations by State25 4.4 Bibliography

2U.S. WINE MARKET

1THE UNITED STATES:

THE WORLD’S LARGEST

WINE-CONSUMING NATION

With a growth rate of 3 to 4% per year and a total of 333 million cases of 9 liters consumed in 2012, the United States remains the most important market for wine today, ahead of France and Italy.1 Number one in both volume and value, the U.S. market is expected to grow in volume and sales at a rate of 12% by 2016.2

The number of wine consumers reached a milestone of 100 million people in 2012.3 The Baby Boomers and consumers aged 37 to 48 make up the largest group of wine consumers in the United States. Unlike their elders, younger generations are starting to drink wine earlier and are interested in a wider range of grape varieties and appellations from different countries.

Currently, Americans mainly consume wine produced in the United States, but the country is opening up to imports due mainly to a younger generation of enthusiasts. The share of imported wines is expected to grow gradually as new consumers become more mature and reach the 45-65 year-old demographic, within which consumption usually reaches its peak.

In terms of per capita consumption, the U.S. is still far behind more traditional markets such as France, Italy, Spain and Argentina. In 2012, per capita consumption was estimated at about 13 liters per year, as opposed to 52 liters in France.

1 IWSR (Vinexpo, 2013) 2 IWSR (Vinexpo, 2013)3 Wine Market Council

4 IWSR (Vinexpo, 2013)

1.1 ImportsA quarter of all wines consumed in the United States are produced abroad. This percentage is expected to increase by approximately 10% within the next 3 years due to the growing interest of young consumers towards imported wines.4 The top suppliers of the American market are Italy, Australia, France, Chile, Argentina and Spain.

Currently, Americans consume about

13% of the world’s wine production.

Source : Huffington Post, 25 novembre 2013

“In the long term, U.S. production will

not be sufficient to quench the thirst

of Americans”

- Robert Bonneau, Chief Executive Officer of JJ

Buckley Fine Wines, one of the premier online

fine wine retailers in the United States.

Wine imports to the U.S. market have

increased by nearly 50% since 2001

Source : Wine Institute, avril 2013

3 U.S. WINE MARKET

1.2 American « Wine Monopoly »

The United States has many national or local importers, but the market is dominated by five large wine companies that control more than 50% of market shares. In 2012, three of them - E & J Gallo, Constellation Brands & The Wine Group – accounted for nearly half of all the wine sold in America. In contrast, boutique wines are seldom exported. They are more often subject to direct sale to vineyard visitors, a phenomenon that is also observed in Australia and New Zealand. In terms of volume, E & J Gallo, the producer of the country’s second-largest brand, Barefoot, and Constellation Brands, owner of Mondavi and Ravenswood, dominate the world market with 59 and 76 different brands respectively. Based in California, The Wine Group is the third largest producer of wine in the world by volume. Well known for its Franzia box wines sold in 3 and 5-liter cartons, its portfolio consists of 42 different brands.

Countries 2007 2011 Evol 07/11

Italy 26.605 29.985 12.70%Australia 21.920 18.205 -16.95%France 12.405 10.346 -16.60%Chile 6.202 7.076 14.10%Argentina 3.027 6.255 106.64%Spain 4.69 5.455 16.31%Germany 3.370 3.205 -4.90%New Zealand 2.085 3.009 44.29%Portugal 0.705 0.955 35.46%South Africa 0.814 0.860 5.65%

E&J Gallo Average Retail Price - 750 ml - ex. Tax USD $

Gallo Family Vineyards $ 5 / 750 mlBarefoot Wine & Bubbly $ 6.99 - $ 10.99 $ / 750 mlThe Naked Grape $ 7 / 750 ml

Ghost Pines $ 16 - 20 / 750 ml

Constellation Brands Average Retail Price - 750 ml - ex. Tax USD $

Woodbrige by Robert Mondavi $ 7-9 / 750 ml

Ravenswood $ 10-17 / 750 ml

Simply Naked $ 9 / 750 mlClos du Bois $ 12-16 / 750 ml

Source : The IWSR world wine and spirits market study (Vinexpo 2013)

TOP SUPPLIERS FOR THE AMERICAN MARKET – Volume/Millions of 9L cases/Still light & sparkling

4U.S. WINE MARKET

The Wine Group Average Retail Price - 750 ml - ex. Tax USD $

Franzia $ 3-16 /750 ml

Big House $ 6 / 750 mlCupcake vineyards $ 10 / 750 ml

Gray Fox Vineyards $ 8-12 / 750 ml

Source : https://www.msu.edu/~howardp/winebrands

MacaronSilver Birch

E&J Gallo Constellation Brands

The Wine Group

Treasury Wine Estates Trinchero Family Estates

The Top Five U.S. Wine Firms

1.3 Wine Production

95% of all wine production in the United States comes from California (90%), Washington, Oregon and New York. The remaining 5% are from the remaining states, led by Texas and Virginia.

Although wineries exist in all 50 states, nearly half (47 %) of the wineries are located in the state of California mainly in Sonoma County, Napa Valley and Monterey.

The two main varieties grown in the U.S. are Chardonnay, planted on 95.074 hectares and Cabernet Sauvignon planted on 80.630 hectares.5 Pinot Noir, Merlot, Zinfandel, Syrah and Sauvignon Blanc are among the other varieties grown extensively.

With 847.000 hectares of vines in

California alone, the United States are

the fourth largest wine producer in

the world after France, Italy and Spain.

5 California Department of Food

and Agriculture – California Grape

Acreage Report, 2012

5 U.S. WINE MARKET

6 Wine Institute,

Press Release, April 8 2013 7 Wines & Vines – IRI,

Market research Company

(52 weeks through June 12, 2013)

1.5 Market Trends: Sparkling Wines and Rosé on the Rise

Nearly 18 million cases of sparkling wines and champagne were exported to the United States in 2012, an increase of 2% compared to the previous year.6 In fact, imports of sparkling wines, mainly from Italy and Spain have reached their highest level since 1987.

Imports of Italian sparkling wines have seen increases of 14 % overall while Prosecco imports jumped by 47%. Moscato and Lambrusco have also recorded strong sales.7

Top Markets for California Wines

2012 $/Millions

1 - Europe (+) 1,7 % 4852- Canada (+) 14 % 4343- Hong Kong (-) 30 % 1154 - Japon (+) 6 % 1115- China (+) 18 % 746 - Vietnam (+) 22 % 277 - Mexico (+) 4 % 208 -South Korea (+) 26 % 16

Source : Wine Institute, février 2012

Four Italian brands saw their import

volume increase by more than 10%:

Mionetto, Bartenura, Raspberry

Sparkletini and LaMarca.

1.4 Exports

Europe remains the largest buyer of California wine with sales reaching $485 million in 2012, up 1.7%.

Exports to Canada, the second largest market for the United States totaled $434 million, up 14%.

Hong Kong is California’s third largest export market by value, although the value declined in 2012 compared to impressive growth the previous years following elimination of Hong Kong’s 80% import duty.

Elsewhere in Asia, demand for American wine was on the rise in Japan, China, Vietnam and South Korea.

Exports to Mexico totaled $20 million in 2012, up 4%.

6U.S. WINE MARKET

8 Food manufacturing (2013 Wine

Tab report from Technomic)9 Réussir Vigne, 29 août 2013

10 Vins de Provence,

Press Release, February 19 2013

(Data from Nielsen Research Firm)

314.65

18.41

350.51

2012 Forecast

+12.16%

2016

23.06

+11.40%

333.05373.57

+25.26%

Still Light Wine

Sparkling Wine

Source : The IWSR world wine and spirits market study (Vinexpo 2013)

Shipments of Spanish sparkling wines have increased by 4.8%. Several brands of cavas and sparkling Moscato have made significant volume gains: Segura Viudas and Opera Prima.8

French sparkling wines and Champagne have seen their sales increase by 3%.

Americans are increasingly fond of rosé wines. In 2012, a quarter of all rosé sales were made to young people (21-34 years), more often women than men.

From November 2011 to November 2012, exports of rosé from Provence climbed by 41% in volume and 43% in value according to the Provence Wine Council and the French customs agency.

In 2012, retail sales of imported rosé wines costing more than $12 a bottle increased by 28% in volume and 23% in value. By comparison, all table wines showed an overall increase of 1.8% in volume and 4.8% in value.

Since 2003, Provence rosé exports to the United States have grown at double-digit rates each year.

AMERICAN WINE CONSUMPTION Volume – Millions of 9L cases

7 U.S. WINE MARKET

11 Wine Market Council’s annual

consumer survey, 201212 Wines &Vines - July, 2013

Year

Volu

me

in li

ters

Source : Provence Wine Council and the French customs agency

1.6 Average Sale Price

The figures clearly show that young Americans assign a smaller budget per bottle than Baby Boomers or consumers aged between 37 and 48 years old. With a generally larger discretionary spending availability, this demographic of ‘core’ drinkers are more likely than younger or older (65 +) to spend more on a bottle of wine.

The most recent data compiled by research firm IRI indicates that between June 2012 and June 2013, bottles of wine at $20 or more experienced a sales increase of 18%. Regular wine drinkers - 46 million U.S. adults - made 90% of all purchases of wine bottles priced above $20.11

However, wines bottles sold between $5 and $7.99 accounted for the largest share of sales with $1.6 billion in revenues.12

A little more than half of all wines are

sold in big box stores, 21% in hotels

and restaurants and 29% through

other channels

Source: Sud de France Développement

Millennial (21-34 year olds)

Boomers (47-64 year olds)

Gen X (35-46 year olds)

Matures (65+)

Average Retail Bottle Price

% o

f Res

pond

ants

Source : Silicon Valley Bank – State of the wine industry 2013

Provence Rosé Exports to the U.S.

2012 Wine Sales by Age Group

8U.S. WINE MARKET

13 Wine Market Council, 2012 survey

1.7ConsumerProfile

Of all wine consumers, 57% of them are considered “core” drinkers, which mean they consume wine at least once a week or more. In 2012, this group was responsible for consuming 93% of the 175 million cases of wine sold off-premise.

Baby Boomers represent 40% of “core” wine drinkers; 28% are Millennials (19-36 year olds); 20% are Generation X (37-48 year olds) and 12% are from the Silent Generation (people born between 1925 and 1942).13

51% of core wine drinkers in the U.S. are women; 49% are men.

A Gallup poll of alcoholic preferences conducted in July 2013, revealed that women’s preference for wine is wider today than it was 10 years ago, with most of the increase coming at the expense of beer. Among surveyed women, 52% say they drink wine most often, while 22% of men name wine as their favorite drink.

To truly understand the U.S. laws, it is essential to consider all 50 states like independent countries with their separate regulation. The sale of alcoholic beverages in the United States is subject to two levels of regulation:

1- The Federal legislation dictated by the Alcohol and Tobacco Trade Bureau (TTB);

2- The State legislation implemented by each of the 50 states often in addition to federal laws in place.

Pennsylvania and Utah are the only two states whose governments maintain a complete monopoly on alcohol sales, determining what brands to sell, how much to sell them for, and where and when they can be purchased.

Other States exercise some form of control over the sale of alcohol. Called “control states”, these states intervene at various levels in the sale or distribution of certain categories of alcoholic beverages such as beer, wine and spirits.

States that are not involved in the sale of alcohol, but who regulate the sale through licenses are called “open states.”

2LAWS AND

REGULATIONS

During the past decade, sales of wine

and spirits have increased at the

expense of beer sales, which have

diminished in terms of volume, with

the exception of craft beers for which

sales volume increased by 15.5% last

year.

Source: Demeter Group, State of the

Craft Beer Industry, 2013

9 U.S. WINE MARKET

2.1 The Three-Tier System The “Three-Tier System” is a term used to describe the three stages of alcohol distribution in the United States. In this system, set up after the repeal of national prohibition in 1933, it is illegal for producers or foreign suppliers to sell their products directly to retailers or consumers. The importer is the only one authorized to bring alcoholic beverages on the market and fulfill the customs import formalities. The distributor / wholesaler is then allowed to purchase wine or spirits from the importer for resale to retailers (restaurant, bar or liquor store).

Note that some importers also act as a wholesaler/distributor on behalf of foreign producers.

2.2 Direct Wine Sales

Each state has its own laws and regulations surrounding the shipment of wine to consumers. About half of the states allow for some form of direct shipping from wineries to consumers, although various regulations and laws may apply in both the sender’s and the receiver’s jurisdictions. For example, in many states vendors must obtain a permit that defines a strict maximum quantity of wine that can be sold to any individual for their personal use.

Retailers can ship to fewer states than wineries. At the moment, wine retailers can only ship, with certain restrictions, to 14 states. These states currently include AK (Alaska), CA (California), ID (Idaho), LA (Louisiana), MO (Missouri), ND (North Dakota), NE (Nebraska), NH (New Hampshire), NM (New Mexico), NV (Nevada), OR (Oregon), VA (Virginia), WV (West Virginia), WY (Wyoming).

Note that shipment of wine to “dry zip codes”* is illegal and considered a felony crime.

The importer is the only one authorized to bring alcoholic beverages on the U.S. market.

He also is autorized to fill the custom import formalities.

The importer must detain 2 licenses: 1 federal permit issued by the Alcohol and Tobacco Trade Bureau (TTB) and 1 license issued by the autorities where the importer resides.

The distributor/wholesaler is allowed to purchase wine or spirits from the importer for resale to retailers (restaurant, bar or liquor store).

It must detain a license for each State where he wishes to distribute.

There are hundreds of distributors in the United States, but 5 of them control more than 50% of the market share.

The retailer is authorized to sell to the final consumer.

RetailerDistributor/WholesalerImporter

10U.S. WINE MARKET

3.1 Key Wine Retailers in the Country

With more than a billion in sales annually, Costco Wholesale is one of the largest wine buyers in the world. Unlike other U.S. retailers that sell wine, Costco holds a limited inventory in each of its 337 stores in 34 U.S. states. The number of brands offered rarely exceeds 150 and the turnaround is very important.

Approximately 70% of all wine sold in the various branches of their retail outlets is domestic. The remaining 30% comes from imports.

3RETAIL TRADE &

ONLINE SALES

WA

ID

MTOR

CA

NVUT CO

AZ

AK

HI

ND

WYSD

NE

NM

TX

MN

KS

OK

IA

MO

AR

LA

WI

IL

MS AL

MI

INKY

TN

GA

FL

OH

SCNC

PA

WVVA

NY

ME

NJ

DEMD

VT

CT

NH

RIMA

Permit Required

Reciprocal*

Not available to retailers

*A dry county is one in which the local government forbids the sale of alcoholic beverages. There are hundreds of dry counties across the United States, a majority of them in the South.

Here is a map of the states available for retailers to ship wine directly to consumers

Source : ShipCompliant.com

11 U.S. WINE MARKET

3.2 Online Wine Sales

Global online wine sales exceeded $5 billion in 2012 and continue to grow at about 30% per year.14 Despite this increase, the majority of consumers continue to buy their wine through traditional channels. Even today with the rise of multi-channel commerce, online sales account for less than 5% of all wine sales made worldwide.

Of all the countries in the world, Britain comes out ahead in online wine shopping with more than 11% of all retail wine sales made through the Internet.15 Online sales have also risen sharply in recent years in Germany and in Europe, where consumers buy 8 to 10% of their wines online, compared to 2% in the United States.

3.3 Key Online Retailers

Wine.com

Internet-based wine sales are dominated by Wine.com which has been selling wine online since 1998. With a 30% increase in volume, the online retailer shipped more than 2.2 million bottles in 2011. Amazonwine.com

Giant online retailer Amazon relaunched its Amazon Wine site in November 2012 and it hopes to get its fair share of the pie. The store offers some 5000 labels from 700 wine sellers. Four out of five of their wines are from American wineries; the remaining fifth have been sourced from regions in France, Italy and Australia, among international locales.

14 Wine-searcher.com, September 2013

(in collaboration with AFP) 15 Wine Intelligence Report

(UK Consumer Behaviour in the Conve-

nience and Direct-to-Home Channels)

Wal-Mart also is among the major players in the U.S. wine industry. The world’s largest retailer is selling wine in its 4,000 stores located in 38 states and worldwide. This has been the case since the opening of the first Wal-Mart store in the late 80s. Stores carry wines that sell for about $6US to $7US a bottle. Recently, the retailer signed agreements with several South African producers for the purchase of wines that will sell at less than $10 a bottle.

Other key wine retailers in the U.S. include the discount retailers Target, the pharmacy chain Walgreens, Safeway and Publix supermarkets, high-end grocers like Trader Joe’s and Whole Foods Market and the wine retail chain Total Wine & More.

12U.S. WINE MARKET

Klwine.com

K&L Wine Merchants sells hundreds of direct-import wines at great prices. The site shows real-time inventory with plenty of pictures and comments.

Appellationamerica.com

Appellation America is the ultimate source for anyone looking for hard to find American wines.

JJbuckley.com

JJ Buckley Fine Wines is the site of choice for rare Bordeaux and fine wines from around the world.

Vinfolio.com

Vinfolio is a good reference for anyone who wants to build a collection. The site offers a good selection of rare and hard to find wines.

Bountyhunterwine.com

Bounty Hunter Rare Wines & Provisions features top Napa and Sonoma wines.

Brownderby.com

Brown Derby International Wine Center offers great deals on California wines. They also offer an excellent selection of hard to find French wines.

Consciouswine.com

Located in Oregon, Conscious Wine offers agro biological wines only.

Getwineonline.com

Get Wine Online offers great deals on more than 12,000 wines from nearly 40 countries.

Vinconnect.com

Vin Connect offers a wide selection of competitively priced European wines.

13 U.S. WINE MARKET

3.4 Types of Online Wine Retail Websites

Flash Sales, Discounts and Auctions Site: 25% of all online wine sales are made through these types of sites in which retailers offer a limited amount of discounted wines, often sold at 40 or 50% off the regular price for a limited time. These “Flash sales” sites operate on two models. Some are operated by retailers who negotiate huge discounts on wines purchased directly from the wine producer or through wholesalers who are responsible for filling orders. Cinderella Wine, Wines Til Sold Out or Wine Access are good examples.

Other “Flash sales” sites work through a marketing agent who sells wine without ever taking possession of it. It is the producer’s responsibility to package and ship orders in compliance with federal regulations and other regulations in force in each U.S. state. Wine.Woot and Lot18 are among the sites using this model.

The concierge approach: There are sites that offer a more personalized approach, such as JJ Buckley Fine Wines ou Vinfolio. They send daily offerings to their customers from an impressive selection of fine and prestige wines.

Bricks & Mortar sites: That is to say, traditional stores that offer consumers the ability to purchase online. This is the case of Nicolas stores in France or Sherry-Lehmann’s or Zachys Wine & Liquor in the United States. Note that these days; most of the major “Bricks & Mortar” retailers are active online.

Wine Clubs: There is also an array of wine clubs in which members can buy online. Laithwaites Wine Club, Wine of the Month Club, WSJ Wine Club are among the most widely known clubs in the U.S. Wine clubs often act as marketing agents having no stock or sales license. They are relying on third parties for order execution. Wine clubs are also used by wineries that make DTC sales (Direct to consumer), enabling them to achieve better profit margins.

3.5 The Importance of the Scoring System in the Online Wine Purchase Process

U.S. consumers buying wine online are very sensitive to the scoring system attributed by some wine gurus such as Robert M. Parker Jr., Stephen Tanzer, and James Suckling or by specialized magazines like Wine Spectator.

14U.S. WINE MARKET

The credibility of online retailers and the information circulating on sites such as www.cellartracker.com or www.snooth.com also weigh in the balance when it comes time for the American consumer to select a certain wine over another.

This selection process has an impact on how retailers select among thousands of wines that are offered to them each year. They will naturally tend to opt for wines that have received good reviews, and thereby will sell well.

“Retailers receive many proposals, their profit margin is thin, so the last thing they want is to have wines that do not move off the store shelves,” says Robert Bonneau, Chief Executive Officer of JJ Buckley Fine Wines.

The real challenge for a foreign producer is to get an evaluation from a well-known wine guru. Even if a wine has received good reviews abroad, the American consumer will pay little attention simply because its references in wine differs from those of French, Italian or South African consumers for example.

“The problem is that these wine professionals who are well recognized by the public are reluctant to criticize wines that are not yet distributed in the United States. One way to get their attention is to establish a partnership with an importer who will send a sample in the hope of getting a positive evaluation. This milestone reached, you’ll be on your way to convincing a retailer to sell your wine,” advises Bonneau.

Although the Three-Tier System requires foreign producers to do business with an importer, who will sell to a distributor, who will offer wines to a retailer, Robert Bonneau says it is in theory commercially more efficient to operate in the opposite way.

“By successfully convincing consumers and retailers about the merits of your wine, you will easily find a distributor and an importer always interested in guaranteed purchase orders. In an oversupply industry, it is better to create demand than push offers,” concludes Bonneau.

“Retailers receive many proposals,

their profit margin is thin, so the last

thing they want is to have wines that

do not move off the store shelves”

-Robert Bonneau, Chief Executive Officer of

JJ Buckley Fine Wines

“The problem is that these wine

professionals who are well recognized

by the public are reluctant to criticize

wines that are not yet distributed in the

United States. One way to get their

attention is to establish a partnership

with an importer who will send a sample

in the hope of getting a positive

evaluation. This milestone reached,

you’ll be on your way to convincing a

retailer to sell your wine”

-Robert Bonneau, Chief Executive Officer of

JJ Buckley Fine Wines

15 U.S. WINE MARKET

4THE IMPORTANCE

OF DOING BUSINESS WITH

PROFESSIONALS

“In the long term, U.S. production will

not be sufficient to quench the thirst of

Americans. This is a market that cannot

be ignored. Foreign producers must take

steps to position themselves in this stable

market with sustained growth. They must

give themselves time, that is to say foresee

a 10 years horizon to achieve results”

- Robert Bonneau, Chief Executive Officer of

JJ Buckley Fine Wines

It is not always easy to know where to begin when it comes to wine exports, especially in the United States. It is a very complex market with unique laws and regulations in each state. Moreover, to be sold in the United States, a wine must comply with the three-tier system rules; that is to say, it must pass successively through an importer, a wholesaler and a retailer or restaurant owner before being offered to the final consumer. Therefore, a foreign wine sold in the United States ends up costing three to four times the amount being asked by the producer. The exceptions are very limited and direct shipping is only permitted for domestic wines and it is only possible in certain states.

To fully benefit from U.S. market opportunities, it is generally advisable to deal with professionals who know the industry and have reliable contacts. Global Wine & Spirits account managers are among those professionals who can help you connect with serious importers and distributors.

Founded in 2000, our e-business network counts more than 200 American buyers, who in the last year have posted more than 300 sourcing requests for wines from Italy, France, Spain, Chile, Argentina, Australia, New Zealand and South Africa and other countries.

Contact us today to:

• Develop your export markets • Consult & reply to sourcing requests from international buyers• Promote your products to a select group of 3000 professional

buyers, including more than 200 buyers in the United States • Develop an online presence for your brand

Toll Free : (International) : +800-2559-4630 | (Canada and U.S.) 1-866-255-9463

Email : info@globalwinespirits.com

www.globalwinespirits.com

16U.S. WINE MARKET

4.1 Major Wine Events

There are dozens of events covering the wine industry in the United States. Wine competitions or wine festivals featuring local producers are sometimes open to the public. Many of these events are regional in scope and do not offer a window for foreign producers. Some of the major wine events can however be interesting for foreign producers; here they are:

Boston Wine Expo 2014February 15-16, 2014 | Seaport Hotel & World Trade Center

New York Wine Expo 2014March 2014 (to be confirmed) | Jacob K. Javits Convention Center

71st Annual Convention of Wine & Spirits Wholesalers of AmericaApril 8-10, 2014 | Ceasars Palace, Las Vegas

The Miami Wine & Spirits ExpoOctober 2014 (to be confirmed) | Miami Beach Convention Center

17 U.S. WINE MARKET

4.2 General Information on the United States

Geographical situation: The United States is composed of 50 states, 16 territories and one federal district (Washington, DC). The U.S. is the third most populous country after China and India, with over 317 million registered inhabitants in 2013. With 9.6 million square kilometers, the United States form the fourth-largest country in the world after Russia, Canada and China.

Capital: Washington, D.C.

GDP (2011): The economy of the United States is the world’s largest single national economy. The United States’ nominal GDP was estimated to be $16.6 trillion in June 2013.

Major city: New York City: 8 336 697 inhabitants according to the U.S. Census Bureau (2012).

Other cities of importance: Los Angeles, Chicago, Houston, Philadelphia, Phoenix, San Antonio, San Diego, Dallas, San José.

Population: 317 015 000 inhabitants (U.S. Census Bureau, 2013). One in six Americans or 16.7% of the adult population is Hispanic, making up a population of nearly 52 million.

Languages: 21% of the population speaks a language other than English at home. Spanish is the second most spoken language in the United States (12.8%), followed by Chinese, Tagalog, Vietnamese and French.

Annual wine imports: The United States imported 82 million 9-liter cases of wine in 2012, making them the third largest consumers of imported wine behind Germany and the United Kingdom.

Consumption of wine/capita: 13 liters/year

4.3 Laws and Regulations by State

Winery-To- Consumer Shipping

Retailer-To- Consumer Shipping

Prohibited Prohibited Alabama has control over the sale of alcoholic beverages which reduces consumer access to a wide range of imported products. The law prohibits consumers from ordering wine directly from a winery or a wine retailer. To buy wines and spirits, consumers must go to one of the ABC store locations (Alcoholic Beverage Control Board).

ALABAMA (AL)

18U.S. WINE MARKET

ALASKA (AK)

ARIZONA (AZ)

ARKANSAS (AR)

CALIFORNIA (CA)

COLORADO (CO)

Winery-To- Consumer Shipping

Retailer-To- Consumer Shipping

Allowed Allowed Alaska ranks among one of the most permissive states for the sale of alcohol. The law allows direct shipment from both wineries and wine retailer, without imposing limits or taxes. The State, however, permits its communities to legislate on alcohol sales, importation and even possession. More than 75 communities have decided to ban the import and possession of alcoholic beverages.

Allowed Prohibited In Arizona, consumers can have wine shipped directly to them from wineries, but not from a wine retailer. The law authorizes the sale of wine in grocery stores.

Allowed Prohibited A new law, which has been in force since August 2013 allows consumers who visit in-state or out-of-state wineries to have one case of wine per calendar quarter shipped directly to them. Though the law allows consumers to purchase wine in grocery stores, it completely prohibits direct to consumer shipments from retailers.

Allowed Allowed California is the most progressive state when it comes to selling wine. There are nearly no restrictions for wineries and wine retailers in and out-of-state to ship directly to consumers. Residents also enjoy wide access to domestic wines and imported wines in grocery stores and specialty wine shops.

Allowed Prohibited While in-state and out-of-state wineries holding a permit can ship wine directly to consumers, Colorado prohibits consumers from having wine shipped from out of state retailers. Furthermore, the sale of wine is prohibited in grocery stores.

19 U.S. WINE MARKET

CONNECTICUT (CT)

DELAWARE (DE)

Winery-To- Consumer Shipping

Retailer-To- Consumer Shipping

Allowed Prohibited In-state and out-of-state wineries can ship wine directly to consumers, but out-of-state retailers cannot. The law prohibits the sale of wine in food and grocery stores.

Prohibited Prohibited Delaware law is strict when it comes to selling wine. The State prohibits wineries and wine retailers from shipping wine directly to consum-ers. Furthermore, the sale of wine is prohibited in grocery stores.

Allowed Allowed The District of Columbia has very friendly law regarding wine. Consumers can have wine shipped directly to them from in-state and out-of-state wineries and wine retailers. Wine is also available in grocery stores and wine shops.

Allowed Prohibited In-state and out-of-state wineries may legally ship wine to consumers in Florida. There are no quantity limits. However, consumers cannot have access to wine shipped direct from out of state wine retailers. There are 3 dry counties in Florida where direct wine shipments are prohib-ited (Lafayette, Liberty, Washington).

Allowed Prohibited In-state and out-of-state wineries may legally ship wine to consumers in Georgia. However, consum-ers cannot get access to wine shipped direct from out of state wine retailers. Residents can also buy wine in grocery stores and local wine stores.

Allowed Prohibited In-state and out-of-state wineries may legally ship wine to consumers in Hawaii. Although residents have access to wine in grocery store and local wine stores, they cannot have wine shipped direct from out of state wine retailers.

Allowed Allowed In-state and out-of-state wineries may legally ship wine to Idaho residents, so can wine retailers. Residents also have access to wine in grocery stores and wine shops, but they cannot bring their own wine to a restaurant.

DISTRICT DE COLUMBIA

(D.C)

FLORIDA (FL)

GEORGIA (GA)

HAWAII(HI)

IDAHO(ID)

20U.S. WINE MARKET

ILLINOIS(IL)

Winery-To- Consumer Shipping

Retailer-To- Consumer Shipping

Allowed Prohibited Residents have access to wine in liquor stores, grocery stores and via direct shipment from wineries, but not from wine retailers.

Allowed Prohibited In-state and out-of-state wineries may legally ship wine to consumers in Indiana. Although residents have access to wine in grocery stores and retail outlets, state laws prohibits consumers from having wine shipped direct to them from wine retailers.

Allowed Prohibited All in-state and out-of-state wineries can ship wine to consumers, but wine retailers cannot. The law allows the sale of wine in grocery stores and Liquor stores.

Allowed Prohibited Wine shipments from in-state and out-of-state wineries are allowed, but residents cannot buy wine in grocery store or via wine retailers.

Prohibited Prohibited Kentucky residents cannot buy wine at the grocery store. Strict laws also prevent them from having wine shipped direct from wineries or wine retailers.

Allowed Allowed Louisiana allows consumers to purchase wine in grocery stores, liquor stores and to have wines shipped direct to them by both wineries and wine retailers.

Allowed Prohibited While Maine law allows consumers access to wine in grocery stores, liquor stores and via direct shipment from in-state and out-of-state wineries, it prohibits direct shipment from wine retailers.

Allowed Prohibited Maryland allows consumers to buy wine at liquor stores, but not in grocery stores. Wine shipments from in-state and out-of-state winer-ies are allowed, but residents cannot have wine shipped from wine retailers.

INDIANA (IN)

IOWA (IA)

KANSAS (KS)

KENTUCKY (KY)

LOUISIANA (LA)

MAINE (ME)

MARYLAND (MD)

21 U.S. WINE MARKET

Winery-To- Consumer Shipping

Retailer-To- Consumer Shipping

Prohibited Prohibited Direct shipping from both wineries and wine retailers is still prohibited, while there has been progress on the adoption of House Bill 294. Massachusetts law still prevents customers from buying wine in grocery stores.

Allowed Prohibited The state allows consumers to buy wine at grocery stores and liquor stores and to have wine bottles shipped to them from in-state and out-of-state wineries. However, having wine shipped by a wine retailer is prohibited.

Allowed Prohibited Although Minnesota laws allow consumers to have wines shipped directly to them from in-state or out-of-state wineries, they prohibit direct shipment from wine retailers. To purchase wine, consumers must visit a liquor store, as grocery stores are not allowed to sell wine.

Prohibited Prohibited Wine lovers in Mississippi may not purchase wine in grocery stores and may not have wine shipped to them from wineries and wine retailers.

Allowed Allowed Missouri wine consumers have access to wine in liquor stores, grocery stores and through direct shipment from both in-state and out-of-state wineries and retailers.

Allowed Prohibited Consumers in Montana cannot have wine shipped both from wineries and retailers. How-ever, they are able to buy wine in grocery stores and wine stores.

Allowed Allowed Nebraska law allows residents to purchase wine in grocery stores and wine stores, and also through direct shipment from both in-state and out-of-state wineries and retailers.

MASSACHUSETTS (MA)

MICHIGAN (MI)

MINNESOTA (MN)

MISSISSIPPI (MS)

MISSOURI (MO)

MONTANA(MT)

NEBRASKA

(NE)

22U.S. WINE MARKET

Winery-To- Consumer Shipping

Retailer-To- Consumer Shipping

Allowed Allowed Wine consumers have full access to wine in grocery stores, liquor stores and wine shops. Direct shipping from in-state and out-of-state wineries and wine retailers is also allowed.

Allowed Allowed New Hampshire is the most wine consumer friendly state in the U.S. Consumers can buy wine in liquor stores, wine shops, grocery stores. Direct shipping from in-state and out-of-state wineries and wine stores is also allowed. However, wine shipments to the following towns in New Hampshire are prohibited: Ellsworth, Millsfield, Monroe, and Sharon.

Allowed Prohibited New Jersey restricts the sale of wine in grocery stores and doesn’t allow direct shipping from wine retailers. Consumers can purchase wine in liquor stores and wine stores or via direct shipping from in-state or out-of-state wineries.

Allowed Allowed In-state and out-of-state wineries and wine retailers are allowed to ship wine directly to consumers. New Mexico laws allow the sale of wine in grocery stores and liquor and wine stores.

Allowed Prohibited Wines consumers are allowed to purchase wine in wine store and from wineries, but they don’t have access to wine in grocery stores or via direct shipping from wine retailers.

Allowed Prohibited North Carolina law prohibits direct shipping from wine retailers, but it allows direct shipping from in-state and out-of-state wineries. Consumers also have access to wine in grocery stores and wine shops.

NEVADA(NV)

NEW HAMPSHIRE

(NH)

NEW JERSEY(NJ)

NEW MEXICO (NM)

NEW YORK (NY)

NORTH CAROLINA (NC)

23 U.S. WINE MARKET

Winery-To- Consumer Shipping

Retailer-To- Consumer Shipping

Allowed Allowed Consumers can have wine shipped to them direct from wineries and wine retailers. They also have access to wine in wine stores, but not in grocery stores.

Allowed Prohibited Ohio wine consumers can purchase wine in grocery stores, wine shops and through direct shipments from both in-state and out-of-state wineries, but not from wine retailers.

Prohibited Prohibited Oklahoma restricts consumers’ access to wine. The law prohibits the sale of wine in grocery stores and consumers may not have wine shipped to them from wineries or wine retailers.

Allowed Allowed Oregon is one of the most consumer friendly wine states in the country. Residents can buy wine in grocery stores, wine stores and liquor stores and have wine shipped directly to them from wineries and wine retailers.

Prohibited Prohibited The Pennsylvania government controls the retail sale of liquor and wine. As a result, consumers may only purchase wine in stores controlled by the state. Wine is not available in grocery stores and wine lovers cannot have wine shipped directly to them from wineries and wine retailers.

Prohibited Prohibited Rhode Island residents may not have wine shipped directly to them from wineries and wine retailers. The law also prohibits the sale of wine in grocery stores.

Allowed Prohibited Consumers can have wine shipped to them direct from wineries, but not from wine retailers. They also have access to wine in grocery stores and wine stores.

OHIO (OH)

NORTH DAKOTA(ND)

OKLAHOMA (OK)

OREGON(OR)

CONTROL STATEPENNSYLVANIA

(PA)

RHODE ISLAND(RI)

SOUTH CAROLINA (SC)

24U.S. WINE MARKET

Winery-To- Consumer Shipping

Retailer-To- Consumer Shipping

Prohibited Prohibited Direct shipping from wineries and wine retailers is prohibited. Consumers may purchase wine in grocery stores and liquor stores.

Allowed Prohibited Direct shipping from wineries is allowed in Ten-nessee, but the law prohibits direct shipping from wine retailers. Consumers may purchase wine in liquor stores, but not in grocery stores.

Allowed Prohibited Wine is accessible in grocery stores, liquor stores and wine stores and via direct shipping from wineries. Texas does not allow direct ship-ping from wine retailers.

Prohibited Prohibited Utah law severely restricts consumers’ access to wine. Direct shipping from wineries and wine retailers is prohibited with felony penalties for non-compliance. Consumers only have access to wine in stores controlled by the state.

Allowed Prohibited Direct shipping from wineries is allowed, but not from wine retailers. Consumers may purchase wine in grocery stores and liquor stores.

Allowed Allowed Wine lovers in Virginia have full access to wine. Direct shipping, both from wineries and wine retailers is allowed. Consumers also have access to wine in grocery stores, liquor stores and wine stores.

Allowed Prohibited Washington consumers have access to wine in grocery stores, liquor stores and wine stores. Direct shipping is allowed from wineries, but not from wine retailers.

TENNESSEE (TN)

SOUTH DAKOTA (SD)

TEXAS(TX)

CONTROL STATEUTAH(UT)

VERMONT(VT)

VIRGINIA

(VA)

WASHINGTON (WA)

25 U.S. WINE MARKET

Winery-To- Consumer Shipping

Retailer-To- Consumer Shipping

Allowed Allowed West Virginia law allows consumers to have wine shipped directly to them from wineries and wine retailers. They also have access to wine in grocery stores, liquor stores and wine stores.

Allowed Prohibited Wisconsin allows consumers to purchase wine in grocery stores, liquor stores and through direct shipping from wineries, but not from wine retailers.

Allowed Allowed Direct shipping for wineries and wine retailers is allowed. The law prohibits wine sales in grocery stores.

WEST VIRGINIA (WV)

WISCONSIN

(WI)

WYOMING(WY)

http://www.demetergroup.net/docs/per-spective/Craft_Beer.pdf

http://www.huffingtonpost.com/2013/02/01/us-wine-consumption-up-_n_2599085.html

http://www.wineinstitute.org/resources/pressroom/04082013

http://www.winesandvines.com/template.cfm?section=news&content=119207

http://www.foodmanufacturing.com/news/2013/08/consumer-trends-us-wine-industry-growth-sparkling

http://www.reussir-vigne.com/actualites/le-rose-francais-tres-apprecie-aux-etats-unis-et-deprecie-en-asie:ZYP7KO5I.html

http://www.provencewineusa.com/page.cfm?p=106

http://www.nass.usda.gov/Statistics_by_State/California/Publications/Fruits_and_Nuts/201303grpac.pdf

http://www.wineinstitute.org/resources/pressroom/02212013

http://www.suddefrance-developpement.com/fr/fiches-pays/etats-unis/vin/cir-cuits-de-distribution.html

http://www.slideshare.net/SVBFinancial/svb-annual-state-of-the-wine-industry-re-port-2013

http://www.winesandvines.com/template.cfm?section=widc&widcDomain=siri&wid-cYYYYMM=201306

http://www.prnewswire.com/news-releases/wine-drinkers-keep-it-fresh-flirty-and-smooth-176801881.html

4.4 Bibliography

26U.S. WINE MARKET

http://www.wine-searcher.com/m/2013/09/rose-boom-shows-no-sign-of-slowing

http://fr.ambafrance-us.org/IMG/pdf/USA_im-portation_boissons_alcoolisees.pdf

http://wineinstitute.shipcompliant.com/Who-ShipsWhere.aspx

http://shipcompliantblog.com/blog/2013/02/06/wine-retailers-can-only-ship-to-14-states/

http://www.wineconsumers.org/wp-content/uploads/2013/08/ConsumingConcerns4s-mall.pdf

https://www.msu.edu/~howardp/wine.html

http://www.demetergroup.net/docs/perspec-tive/Wine.pdf

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