It’s no secret that the U.S. wine industry is facing headwinds; numerous reports have outlined declining sales, thanks in part to declining interest among younger generations. In an effort to find new audiences amidst this tough climate, some domestic wineries are considering exporting abroad.
“Some [wineries] find more open and willing buyers in our target markets abroad than they do, for instance, here in our own state,” says Valerie Venezia-Ross, the director of programming and marketing at the New York Wine and Grape Foundation. According to the Wine Institute, the U.S. exported approximately 24.2 million cases of wine and hard cider in 2023. While exports have been on decline because of the strength of the domestic market in the past decade, recent trends have some winemakers changing their view on exports as they look to diversify their long-term sales channels.
How do U.S. wineries go about exporting, and what elements should be top of mind when opening this sales channel? Here, SevenFifty Daily speaks with key industry experts for their insights and best practices.
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Why Should U.S. Wineries Export?
“Overall, export provides another sales channel that is less saturated than direct-to-consumer,” says Gina Bianco, the executive director of the Oregon Wine Board. And in a place such as Oregon, which is well known for one variety, “there are a lot of people competing domestically with the same product and same price for a piece of the market,” adds Bianco. “Export provides other opportunities.”
Kate Salisbury, the international marketing manager at the Washington State Wine Commission, says there’s excitement for wine regions that are seen as “discoverable,” such as Washington. “Washington has seen steady growth abroad, with a 10 percent annual growth rate in value of exports over the last five years,” says Salisbury, noting that the region’s wines are now represented in 74 countries.
In general, domestic wines are currently faring well in Canada, Europe, Japan, the U.K., and South Korea, among others, according to the United States Department of Agriculture (USDA).
But it’s not just about sales: international exports play a key role in building a region’s reputation. “Organizations like [the Washington State Wine Commission] see international marketing programs as an important component of promoting a region,” says Salisbury. “The top reason simply being that if you want to be a world-class wine region, you have to be on the world stage.”
Take Advantage of Organizational Support
The conviction in exports by regional wine commissions means many programs are in place to help wineries export, and they should be a first stop for any winery interested in selling abroad.
According to Bianco, Oregon and other states receive grants through the USDA and other sources to help fund programs and activations, such as booths at trade shows like Prowein and VinExpo Paris, or exploratory trips to specific markets. Producers are on the hook to fund their own travel, but Bianco says organizations like the Western United States Agricultural Trade Association can help cover a percentage of that particular spend.
Bianco also says grant money can go towards market research, and helping wineries decide if there’s a market that would be beneficial to their business. “We can help them make those decisions,” says Bianco.
According to Ryan Pennington, the chief operating officer of L’Ecole No. 41 in Walla Walla, Washington, who has been exporting internationally for over 30 years, there is strength in numbers. “I think it’s essential to give importers, the trade, and to some degree consumers, a better understanding of the region and how your brand and wine fit within the context of that region. Where your region sits within the global wine world is essential to creating awareness in a market.”
Find the Right Market Fit
James Mantone of Syncline Winery in Washington State began exporting his wines to Japan and British Columbia in 2008. He says each market is distinctive; it’s important to pay attention to what the market is consuming, to figure out what you can expect to move, and what you plan on trying to sell in those markets.
For example, he says Japan gravitates towards lighter, fresher styles of wines, so his white wines and Mourvèdre, which he describes as “lighter and lower in alcohol” than what one might expect of the variety, do well. “Don’t try and force wines into a marketplace; that just leaves everybody struggling,” he says.
Peter Gower, the managing director of Rising Tide Global, a firm that helps wineries export, recommends targeting one to three markets at first, rather than spreading too broadly. “Market focus and support is critical,” he says.
Pay Attention to Pricing, Production, and Labeling
For wines to move in a foreign market, they need to be priced accordingly. “This usually translates into a 20 percent lower cost than [what wines sell for] to U.S. wholesalers or distributors,” says Gower. “If a winery or distillery doesn’t do this, their products tend to be overpriced in the foreign markets.”
Gower notes there are several additional costs that need to be factored in when pricing for foreign markets: Freight, duties, excise taxes, labeling costs, tender costs, and compliance are just a few fees associated with exporting. While this results in slimmer profit margins, many wineries have found an export volume sweet spot that allows them to balance profits with international presence.
A winery that is considering exporting should have an annual production of at least 15,000 to 20,000 total cases, according to Gower. “If you produce 20,000 cases and export 2,000 cases, that is 10 percent of total sales, which is fairly good,” he says. Plus, it means there’s an opportunity for growth. “In the U.S., many wineries only export an average of three to five percent of their total production, while European wineries export an average of 25 to 30 percent, if not higher,” says Gower.
Scott Osborn, the president and co-owner of Fox Run Vineyards in the Finger Lakes of New York, began exporting wines in the 1990s, and advises to be mindful of labeling laws. For example, Europe requires “sulfites added” on bottles that contain sulfites, while Asian markets such as Taiwan require a chemical analysis from a third-party lab. With new, evolving regulations around nutrition labels, “it’s important to make sure labels are compliant,” he says.
Work the Market
Most importantly, getting into international exports is a yearslong commitment, and wineries need to be in it for the long haul. It takes time to build relationships and a presence. “Recognize that it is a very long-term play, it’s not an overnight business,” says Pennington. “Even if you get an order one year, you’re not guaranteed to get an order the next. I think people should think about how they can support those markets based on the assumption that it is a multi-year investment of travel and support for the brand in that market.”
Supporting a market requires, at minimum, an annual market visit. To get the most out of the trip, Mantone says to do research on cultural expectations and manners. “Not only does it establish a first good impression, but it helps maintain a good relationship,” he says. “Certain cultures have very different ritualistic ways of greeting and doing business. It’s important if you’re going to go there to learn them ahead of time.”
“There’s literally a whole world of business opportunities out there,” says Pennington. “It’s also about diversifying our business; as markets go up and down in cycles, as they always do, having as many outlets for your wines as possible generally leads to a more sustainable business.”
Dispatch
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Shana Clarke is a wine, sake, and travel writer, and the author of 150 Vineyards You Need To Visit Before You Die. Her work has appeared in Saveur, Fortune, NPR, Wine Enthusiast, and Hemispheres. She was shortlisted for the Louis Roederer 2020 International Wine Writers’ Awards and ranked one of the “Top 20 U.S. Wine Writers That Wineries Can Work With” by Beverage Trade Network in 2021. She holds a Level 3 Advanced Certificate from Wine & Spirit Education Trust and is a Certified Sake Sommelier. She will always say yes to a glass of Champagne. Learn more at www.shanaspeakswine.com and follow her @shanaspeakswine.
