With the declining value of the U.S. dollar and increasing wine sales overseas, Charles Shaw wine, an American favorite, may seem in some places more like "One-Buck Chuck." The low value of the dollar is starting to turn California wines into bargains abroad.
And 2007 was a vintage year for wine exports, which grew by almost 9 percent to a record $951 million, the Wine Institute, the industry's main trade group, said recently. California wineries make 95 percent of the U.S. wine sold abroad.
Two large Central Valley companies, E.&J. Gallo Winery and Charles Shaw maker Bronco Wine Co., were among the biggest exporters.
Gallo, the nation's largest wine exporter, has bottles on the shelves of supermarkets in China and 91 other countries, and Bronco is a big supplier of bulk wine that is bottled and sold in England, one of the largest foreign markets for California vintages.
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Much of it is similar to Bronco's $1.99 Charles Shaw wine, popularized by the Trader Joe's grocery chain and nicknamed "Two-Buck Chuck" because of its price.
This could be another record year for wine exports.
The volume of U.S. wine sold abroad is growing by 12 percent. California wine is sold in 125 countries.
On Thursday, the euro rose above $1.52 for the first time in its nine-year history.
Further interest rate cuts in the United States are likely to keep exchange rates favorable for wine exporters. At the same time, the low dollar helps California winemakers fend off foreign competition in the United States.
Jon Fredrikson, a Woodside wine industry analyst, said there are early signs that the low dollar is starting to pay off for California makers of premium wines.
"American wines are a bargain right now, and that's showing up with what's being shipped to Canada, where the value of our wine shipments is up nearly 25 percent," he said.
But exporters and industry analysts said the rosy numbers masked a more negative truth about the global wine market: There's a huge trade imbalance.
Although the United States had nearly $1 billion in wine sales abroad last year, it imported $4.7 billion, or nearly five times that amount, according to Fredrikson. The United States is a target for virtually every other wine-producing nation because it is the most lucrative market in the world, he said. Americans drink about $30 billion worth of wine annually.
High-end California vintners are having trouble breaking into some foreign wine markets abroad, where French labels carry more prestige, he said.
Much of the wine moving between the United States and Europe is less expensive bulk wine that companies bottle and market under their own labels.
Fredrikson said the trade has taken on a certain irony with "these big ships of wine passing each other at night."
Vintners, though, are bullish about exports.
"We can compete very well with anywhere in the world," said Joseph Gallo, chief executive of Modesto-based Gallo, the largest winery in the United States.
Constellation Brands Inc. of Fairport, N.Y., which owns the Ravenswood and Robert Mondavi brands, among others, said its sales of California wine grew by double digits through November.
"A lot of growth is happening with better wine at higher price points," said Jose Fernandez, CEO of Constellation Wines North America. Fernandez said the low dollar has enticed overseas drinkers to sample California wine, and "once that happens, they discover that they like the quality of the wine."
Growing exports are helping American farmers by drinking up any grape surpluses.
"Exports help keep our grape production in line with consumption and mean better prices for growers," said Dennis Atkinson, vice president of agriculture for Tejon Ranch Co., based in Lebec.
About half of U.S. wine exports are shipped to the Euro- pean Union, accounting for $474 million, followed by Canada, $234 million; Japan, $63 million; Switzerland, $26 million; and Mexico, $24 million.
It is the Far East where California wineries are seeing the fastest growth rates.
Sales to South Korea rose 60 percent to $18 million. Exports to China soared 74 percent to $16 million.
A forecast by the European trade group Vinexpo has China cracking the list of the 10 largest wine-consuming nations by 2012. The trade group estimates the Chinese wine market will grow 70 percent between 2006 and 2011.