Over the last few years, wine drinking has risen in the U.S. and now for the first time we are the largest consumers of wine in the world. Worldwide, wine drinkers consumed 6.4 billion gallons last year which is a 0.8 percent drop from 2007. The Paris-based International Organization of Vine and Wine says that consumption fell in all of Europe's major wine-producing and consuming countries, including France, Italy and Germany.

Reports are also good for California wines, even as foreign consumers drank less they bought more U.S. wine. For the first time U.S. wine exports went over the $1-billion sales mark and New World wines are commanding a growing share of the market. Italy still exports the most wine but for the first time European vineyards accounted for less than half the world's grape production, showing how much the wine industry has shifted over the past few decades.

Wine producers seeking fresh mouths for their product are heading to China which finally became one of the ten biggest wine consumers in 2008 and is expected to rise in the ranks in the coming years. Chinese consumers are gradually getting more informed about the various kinds of wine and winemakers and other wine groups from all over the world are setting up shop in Shanghai and other major cities. Chinese wines still dominate the markets there (partly because a 14 percent import duty makes them more expensive) but winemakers from around the world are opening up distribution channels and trying to figure out what appeals to Chinese drinkers. An AFP report says that French wine is selling well because of its reputation and that Chinese drinkers are attracted to the bottles and branding of Australian wine. As the Chinese drinking audience grows in size and influence I wonder how these new consumers will change the way wine is produced and packaged.

Will Americans will replace the French as the world’s biggest wine drinkers? An article from Beverage Daily references a new study that says that within three years this will be the case. As we first noted last year, French wine consumption is falling fast. A new report from the International Organization of Vine and Wine (OIV) says that French wine consumption dropped another two per cent between 2004 and 2005 and consumption is already down by half over the past 40 years. Meanwhile, Americans are drinking more wine than ever, the amount grew three per cent last year. If the trend continues the U.S. will soon be the top consumers. Wine consumption is also on the rise in Britain, it grew five percent last year. Meanwhile French wine exports are rapidly falling.

Decanter has the results of two interesting studies that explore the choices U.S. consumers make regarding wine. In terms of domestic consumption, California is king. Two out of every three bottles sold in the U.S. are from California.  The Supreme Court decision to permit wineries to sell directly to consumers and the "Sideways" effect are believed to have contributed to the rise in sales. "Premium" wines, which are considered to be those over $7 were two thirds of the sales. Another market research study from Chicago-based Information Resources Inc (IRI) reports good news for wines from Europe and New Zealand. The study, called The 2005 Table Wine Top 30 Brand Performers, found that European table wines grew 9.4% last year . The sales of Spanish table wines was up 23.1% and German wines are up 18.9%. The really good news is for New Zealand wine producers. Their sales were up 190.5%.

Is Australia losing its taste for the fruit of the vine? Australian wine has been grabbing a larger share of the worldwide market over the past few years but sales of wine in Australia are down 4.2 percent from last year. Red and rose wine sales were off 9.3 percent. The news was even worse for brandy, down 44.7 percent, and fortified wines, down 18.4 percent. Also with wine consumption down through much of Europe and wine surplus issues rising, the tide seems to be turning for the Australian wine industry in general. The Barossa winemaker Cockatoo Ridge saw profits fall 42 percent in the second half of the year and their chief exec, Ivan Limb was quoted in the The Advertiser as saying these are tight times for winemakers.