U.S. wine exports, 90 percent from California, passed the $1 billion milestone for the first time with $1,008,259,000 in winery export revenues in 2008, up 6 percent from the previous year, according to the Wine Institute in San Francisco.

Volume shipments in 2008 increased 8 percent, compared to the previous year, to nearly 130 million gallons or 55 million cases.

"Wine exports have increased steadily during the past 15 years, increasing more than five-fold from $196 million in 1994. Our wineries have been able to adjust and remain competitive despite changes in U.S. dollar exchange rates and during strong and weak economic conditions," says Robert Koch, president and CEO of Wine Institute.

"Wine is California's second leading export product by value, and there is great opportunity to build upon this progress as the U.S. is the world's fourth leading wine producer, yet holds a 6 percent share of the world export market," says Linsey Gallagher, Wine Institute international marketing director.

Nearly half of U.S. wine exports are shipped to the European Union, accounting for $486 million. Volume shipments to the European Union increased 9 percent in 2008 compared to 2007, and sales by value grew at a slightly lower rate of 2 percent due to the continuing strategy of producers exporting bulk wine for bottling overseas to save the costs of shipping bottles and other packaging. The finished wines are then shipped to their final destinations in neighboring countries.

The next leading markets were: Canada, $260 million; Japan, $61 million; Hong Kong, $26 million; and Mexico, $23 million.

Growth in other markets include: China, up 34 percent to $22 million; Austria up 31 percent to $14 million; and Singapore, up 26 percent to $11 million.

"Regionally, greater China showed tremendous growth in 2008. Hong Kong was buoyed by its repeal of the local import tax on wine and has quickly become the wine hub for Asia. California wine exports to Hong Kong clearly outpaced that of our major competition," says Eric Pope, regional director for emerging markets. "China remains the most sought-after export market worldwide due to its sheer population size. Growth continued, albeit at a slower rate than in 2007 — perhaps a first sign that the global financial crisis is impacting the Chinese market for imported wine."