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April 2014, Volume 20, Number 2

Wine, Food

California crushed some 4.7 million tons of grapes in 2013, up from 4.4 million tons in 2013. There were three major types of grapes crushed: 2.4 million tons of red wine varieties, 1.8 million tons of white wine varieties, and 455,000 tons of raisin and table grape varieties that are often used to make natural sweetener concentrate. The state of Washington produced 210,000 tons of wine grapes in 2013.

The most common California variety was Chardonnay, 16 percent of the crush and worth an average $868 a ton, followed by Cabernet Sauvignon, 11 percent of the crush and worth an average $1340 a ton.

California had 590,000 acres of wine grapes in 2014, including 530,000 bearing acres. Sonoma county has 60,000 acres of wine grapes, compared to 40,000 acres in neighboring Napa, including over 10 percent owned by the two largest vineyards, Jackson Family Wines with 3,300 acres and E & J Gallo with 3,200 acres.

Some 370 million cases of wine were shipped in 2013; a third of this wine was imported. Only 15 percent of US adult wine drinkers are considered regular wine drinkers, defined as drinking wine at least once a week.

Spain. Spain became the number one wine producer in 2013 when a record crop led to the production of 50 million hectoliters, up 40 percent from 2012. Italy produced 47 million hectoliters and France 42 million. The International Organization of├┐Wine and Vine publishes definitive production data in May.

Spanish yields have almost tripled in the past 25 years to an average 50 hectoliters per acre. Many vineyards were replanted with higher-yielding varieties that are harvested mechanically. Spain now exports twice as much wine as is consumed in Spain domestically, as many young Spaniards prefer beer and spirits.

Tempranillo is the grape variety used to make many Rioja wines, and other varieties dominate in the other 70 designated wine areas.

China. China (including Hong Kong) surpassed France and Italy to become the largest consumer of red wine in 2013, buying 1.8 billion bottles or 155 million cases. The color red is associated with wealth, power and good luck in China, and is also the color of the Chinese flag. Most Chinese drink beer or spirits such as whiskey, brandy and baijiu, a liquor distilled from grain.

China is the world's fifth largest wine producer, trailing Spain, France, Italy, and the US. Over 80 percent of the wine consumed in China is produced there.

Affluent Chinese buy much of their wine in Hong Kong, which abolished taxes on wine in 2008. Wine merchants say that red wine is considered a luxury, and that Chinese buyers are willing to pay a premium for estate wines with attractive labels. However, more confident wine drinkers are reportedly no longer buying the most expensive wine on the menu to impress their guests.

Trade. Most wine is drunk in the country where it is produced, but a rising share of the world's seven billion gallons of wine produced each year is exported. About 40 percent of global wine exports are shipped in bulk, usually in 32,000 bottle plastic bladders that are held within a fixed frame also known as flexitanks. Once emptied, the bladders are shredded and not reused.

The increased shipping of wine in bulk means that more wine is being bottled near where it will be consumed. For example, over half of Australian wine is shipped overseas in bulk, usually taking 40 days to reach Europe. A 20-foot container holds 9,900 liters of bottled wine, while a bladder has 24,000 liters.

However, more wine is being sold in cartons and pouches, especially wine that will be consumed soon after it is purchased (one estimate is that 90 percent of the wine bought in the US is consumed within 24 hours of purchase). Wine in cartons, pouches and bag-boxes usually remains drinkable for several weeks, with bag-in-box wines having the longest shelf life.

Food. Fruits and vegetables are disproportionately consumed by high-income Americans. Households with incomes of $100,000 or more are 18 percent of US households but account for 27 percent of food spending, and an even higher share of spending on fruits and vegetables.

The $245 billion US food service industry, the wholesalers between farms and factories and restaurants, cafeterias, hospitals and similar food purveyors, is consolidating. Sysco, whose $44 billion in sales in 2013 makes it the largest food-service firm, plans to buy the second-largest firm, US Foods, creating a firm with $65 billion in annual revenues. Other food-service firms, such as Performance Food Group and Gordon Food Service, account for less than five percent of food service sales.

The Centers for Disease Control and Prevention reported that 36 percent of adults were obese in 2009-10, up from 15 percent in 1980. USDA reported in January 2014 that more Americans were eating more meals at home, which often involves more healthful meals, according to the National Health and Nutrition Examination Survey between 2005 and 2010. However, some assessments find that Americans under-report the calories they consume to this survey.

The average American ate 215 meals in restaurants in 2000 and 193 meals in restaurants in 2013.

Consolidation in food retailing continues. Wal-Mart sold almost 30 percent of groceries in the US in 2013, followed by almost 10 percent for Kroger (2,640 stores), and over five percent for the newly combined Albertsons-Safeway (2,400 stores under 16 names, including Vons and Jewel-Osco), which will be privately owned. Mid-level grocery stores such as Safeway are being squeezed by high-end grocers such as Whole Foods, which has 350 stores, and discounters such as Wal-Mart.

The United Food and Commercial Workers Union represents many of the Safeway workers who belong to unions. Safeway says that three-fourths of its 138,000 full- and part-time employees are covered by collective-bargaining agreements.

There is also consolidation in food production. US-based Chiquita and Ireland's Fyffes in March 2014 agreed to merge and create the world's largest banana supplier. ChiquitaFyffes, which would account for 29 percent of global banana sales, would have 32,000 employees and $4.6 billion in annual revenue from sales of more than 160 million boxes of bananas. In 2011, Dole accounted for 26 percent of banana sales and Del Monte 15 percent.

Some 16.5 million tons of bananas were exported in 2012.

Pets. The American Pet Products Association reported that Americans spent $56 billion on pets in 2013, including $22 billion or 40 percent of pet spending on food, which is often age-specific, breed-specific, vitamin-infused or additive-enhanced. Other pet spending included $14 billion for veterinary care, $13 billion for supplies and over-the-counter medicines, and $2 billion for live-animal purchases.

Fish. Farmed fish are almost half of the fish produced for food, up from less than 10 percent in 1980. Oslo-based Marine Harvest is the largest producer of farmed salmon, helping Norway to be second only to China in the value of seafood exports.

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