Posted: Thursday, December 27 2007. 1:00 PM

US wine consumption to challenge France

Wine consumption in the United States is projected to rise for the 15th consecutive year in 2007, after a 4% gain in 2006, reports the Washington Post . US could overtake France as the leading per capita consumer in a few years.

Citing estimates from the 2007 wine market report by Impact Databank, the Post says consumption will reach a record 304 million cases this year.

That will place the United States ahead of Italy in per-capita consumption for the first time, trailing only France. At the current rate of growth, Americans will overtake the French by 2015.

Wine consumption in the US is forecast to reach 860 million gallons ( 1 gallon=4.5 liters) in 2011 based on growth of 3.7% per year, driven by rising per capita wine consumption, favorable demographics, perceived health benefits, growth in wine tourism and direct-to-consumer wine shipments.

Per capita wine consumption in the US is expected to reach 3.8 gallons in 2011 based on annual increases averaging 2.6% from 3.4 gallons in 2006, according to Freedonia's recent report Focus on Wine.

The Post quotes analysts as saying reasonably priced domestic, South American and Australian wines will continue to be attractive to US consumers, but European wines, with the drop in the value of the dollar, will lose some appeal: They will rise in price by 10% to as much as 30% in the coming year.

This should benefit companies such as Australia's Casella Brands, with its top-selling Yellow Tail brand. Also well placed are Constellation Brands and E&J Gallo Winery, which hold strong positions in both the retail and restaurant markets.

Source: http://www.researchrecap.com