Bernard Hickin (left) of Jacob's Creek in Australia and Ehren Jordan of Failla Wines in California (right) toast to the success of their new partnership. Image: Jacob's Creek.

Australia Taps into the Booming California Wine Industry as US Exports to Asia Climb

ASEAN Korea Australia China Taiwan Asia

In February, Australian wine company Jacob’s Creek announced that it had joined hands with a California winemaker to produce a new lineup of wines, branded “Two Lands,” to be sold exclusively in the US. The collaborative project saw Jacob’s Creek’s head winemaker, Bernard Hickin, pair with Ehren Jordan, a renowned winemaker from the Napa Valley.

The joint project comes mainly as an Australian effort to boost wine sales in the US. A once-booming industry, Australian wine sales in the US saw a decline of over 20% from 2008 to 2013 as a result of the global financial crisis. However, new research suggests that the market may be turning around, as wines in the middle and low price ranges saw sales growth in 2013.

The “Two Lands” lineup – which includes Chardonnay, Cabernet Sauvignon, Pinot Grigio, and Shiraz – is being marketed as the intersection of California craftsmanship and Australian character. As both regions are known worldwide for their wines, the cooperation comes as a natural step. The “Two Lands” wine collection was released in early March, and can already be found on store shelves across the country.

It is no accident that Jacob’s Creek is looking to California to boost sales. The California wine industry is one of the most lucrative in the world. According to a 2014 report released by the Wine Institute, California wine exports account for the lion’s share of US wine exports worldwide – 90% of an almost $1.5 billion industry in 2014.

US wine exports have grown by over a billion dollars since the mid-1990s, and Asia is increasingly being targeted as an important market. Of all export destinations for US wine, the European Union and Canada are the two largest, but six Asian countries are in the top ten. Japan is first in Asia, importing $88 million annually, followed by China at $71 million, Hong Kong at $69 million, South Korea at $22 million, Vietnam at $20 million, and Singapore at $16 million.

Wine exporters see positive growth opportunities in emerging Asian markets, especially in places like Taiwan and Singapore. Taiwan saw over 30% growth in US wine sales in 2014, while Singapore saw the largest year-on-year increase of any country, at 55%.

Chad Westra is a Research Intern at the East-West Center in Washington and an undergraduate student at Calvin College.