The French are trying to conquer America, and that doesn't mean they want to buy Louisiana back. Americans are purchasing French wine in record amounts, helping propel the Gallic wine industry to new highs. French wine and spirits exports hit $13 billion in 2011, and America was the dominant trading partner, providing 18 percent of that figure. Despite the intense focus on China in recent years, the United States is importing more French wines from almost every region. That's spurring the French to invest more marketing and sales efforts in America.
The U.S. imported $2.3 billion worth of wine and spirits last year, according to France's Federation of Wine and Spirits Exporters (FEVS). Closer to home, 10 of France’s traditional European clients bought a combined $5.4 billion. But that's a modest 3 percent growth, and the European financial crisis has industry members worried. The volume of exports to Germany and the United Kingdom are down 13 percent and 38 percent respectively compared to a decade ago.
Which is why the French are naturally relieved to see 29 percent growth and $3.3 billion in sales from five key Asian nations—China, Hong Kong, Japan, Singapore and Taiwan—with China leading the way. But the Chinese rarely shop beyond the cellars of Cognac and Bordeaux—those two regions account for a whopping 80 percent of the value of exports to China. That helped make those two regions the fastest growing sectors in the wine and spirits industry.
What differentiates the Chinese and American markets is variety. “What we see is that all the products are present in the U.S. market,” said Benoit Stenne, a spokesperson for FEVS. “We were really worried about America, and there has been a real strategy, a real determination by Burgundy, Bordeaux, Champagne, Cognac and the other regions to reconquer America.”
This is good news for American consumers, because when the French say they want to reconquer America, they mean getting their products onto wine lists and store shelves, bringing even more choices to consumers. The data has convinced the French that American consumers are more daring than they thought. “There is definitely a growing sophistication in the American market,” said Chris Adams, CEO of Sherry Lehmann, who observed that both he and importers actively scour France for new wines. “Americans are looking for discoveries.”
Some of those discoveries were born of economic necessity during the recession but have turned into lucrative products, like the demand for crémant sparkling wines from Alsace, Burgundy and Limoux. “Crémant grew significantly during the downturn and what’s really interesting is it has held its gain even though Champagne sales are very robust,” said Adams.
“There seem to be a lot of young sommeliers and buyers who are interested in esoteric wines that are good values,” said Anaïs Ricome, winemaker for the Languedoc's Domaine la Croix Gratiot.
In contrast, there appears to be little or no market for crémant in China. Even the Champagne trade remains relatively minuscule. Last year the Chinese bought $13.7 million worth of Champagne, $12.5 million of Burgundy, $13.3 million of Rhône wines and $3 million of Loire wines.
In America, Champagne sales grew 19 percent to $448 million, while Rhône sales grew 30 percent to $86.4 million and Loire wines rose 17 percent to $50.5 million. Burgundy is doing particularly well, with sales increasing 33 percent to $182 million. “We are so excited about the Burgundy 2009—it’s the biggest position we’ve taken on Burgundy in our history,” said Adams. Alsace is also enjoying strong growth in the U.S.—Pinot Gris, Grand Cru whites and reds enjoyed double-digit growth. Even somewhat obscure appellations like Grignan-les-Adhémar in the Drôme have found fans in America.
Samuel Guibert, managing director of Languedoc producer Mas de Damas Gassac, remarked at a recent marketing event in New York that he has been surprised how well French wines from outside the best-known regions have done in America. “The rest of France is doing better than ever," he said. "Five years ago you couldn’t fill a room if you had Languedoc [wines]. The whole emphasis on values is playing in our favor.”
As for Bordeaux, that region’s fortunes continue to depend increasingly on China, and in 2011 exports hit 58 million bottles worth $436 million. That reflects a 91 percent growth in volume and 103 percent in value.
By comparison, America bought 20 million bottles worth $169 million, with a respectable 22 percent growth in volume and 28 percent growth in value. But again, American consumers bought Bordeaux wines from all prices ranges, not just top properties. As Bordeaux works to save its huge community of less prestigious producers and farmers, the American market is becoming the place to go. Bordeaux's trade group is committing $4.1 million of its 2012 marketing budget to America.
With additional reporting by Kim Marcus.