Greg Livengood, Ciatti Co. Global grape broker, leads off the Washington Association of Wine Grape Growers state of the industry session on Wednesday, January 10, 2016 at the Toyota Center in Kennewick, Washington. (TJ Mullinax/Good Fruit Grower)
Washington wine grape growers should be looking to New Zealand as a model for premium wine production — and there’s opportunity for growth.
That’s according to Greg Livengood, a global wine and grape broker for Ciatti Co. in San Rafael, California.
New Zealand does not have a huge market; similar in size to Washington, New Zealand growers harvested 358,600 tons in 2015, after a high year of 489,500 tons in 2014. But everything they do is premium, with a focus on Sauvignon Blanc and Pinot Noir.
“The one thing they don’t do is play the commodity game. They don’t try to compete with any of these other countries on price,” Livengood told growers at the Washington Association of Wine Grape Growers. “They really went out and focused on being the best producers of a variety they could be.”
Combined, Italy, France and Spain produce more than half of the global wine grape crop, compared with just 8 percent for the United States.
Those three countries also have bulk trade routes to China and inside the European market.
Countries in the southern hemisphere harvest about 8 million tons total, which is roughly the same size crop as Italy in a good year. However, most of those countries, including New Zealand, are varietal driven with few generic labels.
With the United States becoming the largest consumer of wine in the world, other countries are seeing opportunity to grow their markets here, Livengood said, and their price points can be difficult to compete with for domestic producers.
A gallon of Cabernet Sauvignon from Chile is priced at $2.50, compared with $6 for a gallon from California.
“U.S. consumption is increased. We’re the No. 1 consumer to the world now, and all those countries are pointing to us. They all want to be here,” he said.
At the same time, the U.S. represents just 5 percent of the global population, said Brett Scallan, vice president of marketing for Ste. Michelle Wine Estates in Woodinville, Washington. “That means 95 percent are outside the U.S.,” he said. “I’m not suggesting that they all drink wine, but there’s a lot of opportunity there.”
Ste. Michelle grew its export business by 30 percent last year alone, he said.
Opportunities for export growth from Washington wineries include Canada — already the biggest export market for U.S. wine — as well as Europe and Asia, including Scandinavian countries, Germany and the United Kingdom, Japan, China and South Korea.
– by Shannon Dininny
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