The Changing Market Structure of the USA Wine Industry
The US wine industry has a high degree of concentration. In 1990, the largest four wineries accounted for 49.2% of the entire wine storage capacity in the USA. The situation changed very little in 2001, with the largest four wineries accounting for 48% of the storage capacity even though there were a significant number of new wineries. An analysis using Markov chains indicates that the concentration will decrease in equilibrium but will still remain high in the USA. Wineries of 126 000 cases of 12-750 ml bottles or less are expected to increase in number relative to the number of larger wineries. The relative number or proportion of wineries larger than 126 000 cases is expected to decrease, while the number or proportion of smaller wineries will increase. The upward trend in the number of smaller wineries in the USA, which tend to concentrate on premium table wines, is in agreement with the demand trends in the market by wine type. The premium table wine market segment in the USA has been the only market segment with sustained demand growth.