Wine Industry

4550 Words Mar 27th, 2011 19 Pages
Executive Summary The United States wine industry is a 12 billion dollar industry and is composed of 7,000 wineries and around 1,800 different companies. The three major companies within the industry are Constellation brands, E&J Gallo, and The Wine Group Inc. The industry has made its way through the economic crisis at a better rate than some of the other U.S industries however in order for them to continue to see any type of growth it is important that they acknowledge their issues and find ways in which they can rectify them. The majority of the issues among the industry are problems that cannot be directly controlled by individual wine companies. Therefore it is imperative that wineries find away to use these issues to their …show more content…
Not only does the U.S. produce wine to be sold in the U.S. but last year they exported around 403 million liters of wine, the majority was exported to Canada and the United Kingdom.
The price of grapes depends based on how the grapes were treated prior to being sold. This has an effect on how much it cost to produce the wine, but it also affects how much the wine will cost to the consumer. There is a price different between fresh grapes and grapes that have been processed. In 2009 the average price for one ton of grapes was around $505. When examining the cost of producing wine there are many factors in which you have to look at. Factors many include but are not limited to, the grapes, the process of fermentation, the storage, the labor and time, the bottling/packaging, and of course the shipping of the products to the customers. The total cost of wine in California in 2009 was around 1.7 billion dollars, which included the production of 3.4 million tons of wine grapes.
The pricing for the products themselves are harder to approximate. There are many factors that go into deciding the price for a certain type of wine, with a certain name, from a certain company, containing a certain type of grape, that was processed a certain way. Many wine companies throughout the US have a high end wine and a low end wine. This allows the company to enter the market at all angels. Especially with the down turn of the economy, many companies have had to

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