E_Article

New York Times E-Article

Export programs a sore point

Friday, June 30, 2000

By Jim Hammet

WineToday.corn

Printed July 11, 2000

A majority of wineries in California, Oregon and Washington do not consider their export programs a success, according to a recent survey.

Despite a high number of wineries unhappy with their export programs, the survey indicated an optimistic outlook for the American wine industry to compete in a global marketplace, said Rick Castaldi, who conducted the study along with professors Murray Silverman and Sanjit Sengupta.

"The wine industry is facing several challenges," said Castaldi. "The domestic market is maturing with fewer new wine drinkers coming on board, several years of robust harvests and increased worldwide vineyard plantings have led to a glut of grapes, and domestic wineries are encountering stiffer competition both locally and abroad from emerging wine‑producing nations such as Chile and Argentina."

The survey was conducted by the three San Francisco State University business professors and funded through a grant from the U.S. Department of Education. It was sent to about 900 wineries in California, Washington and Oregon, with a fourth of them participating in the survey.

The survey found that: 44 percent of the wineries are involved in exporting; 73 percent of exporting wineries say their export programs are not profitable; 60 percent do not consider their program a success; 61 percent say their program has not met their expectations.

Castaldi said the researchers chose to study the wine industry because of its importance to the California economy.

Other results in the survey indicate there is a great deal of interest among wineries for increasing exports.

One reason for optimism about the industry's export prospects, Castaldi said, is that a third of the smaller exporting wineries (producing fewer than 25,000 cases a year) and close to half of the larger exporting wineries consider their programs very successful. That suggests it's not only the large vintners that can benefit from the international market, he said.

New York Times Digital, a division of The New York Times Co.

BUSINESS

Strictly Business

WINERIES SEE EXPORT FAILURES

Sam Kennedy

08/08/2000

The Press Democrat Santa Rosa, CA

CITY

The majority of wineries that have ventured into international markets consider their export programs unsuccessful, according to a recent survey by San Francisco State University.

The survey found that 44 percent of wineries are involved in exporting. Of those, 73 percent said their export programs failed to earn a profit, and 60 percent considered their programs a bust.

In spite of the poor results, study authors said foreign trade is increasingly important.

"The domestic market is maturing with fewer new wine drinkers coming on board," said Rick Castaldi of San Francisco State.

"Several years of robust harvests and increased worldwide vineyard plantings have led to a glut of grapes," he said. "And domestic wineries are encountering stiffer competition both locally and abroad from emerging wine‑producing nations such as Chile and Argentina."

The survey, funded by a grant from the U.S. Department of Education, received a 25 percent response rate from 978 wineries in California and the Northwest.

Sam Kennedy