Diversification in the Canadian Wine Industry

The wine industry in Canada is largely driven by French and Italian imports. Since 1996, wine imports have consistently increased, and in 2013 they exceeded $2.2 billion.

Canada’s total wine exports have also increased in that time period, growing in value by 771 per cent since 1996. Yet wine exports only represented four per cent of the overall Canadian wine trade in 2013. Is there a potential to grow exports more?

The recent expansion in exports can be attributed to a diversification of export markets. Canadian reliance on the U.S. as an export destination has continued – when compared to 1996, but Canadian exports have expanded to markets in Asia, especially China.

 

This rise in exports has also been assisted by the introduction of niche products, such as icewines and late harvest wines. The introduction of these highly-acclaimed products has allowed Canadian exporters to stay competitive in a global market that is strongly dictated by consumer attachments to brand name, geographical location and quality.

According to an AAFC sector report, Canada is now considered a leader in the production of icewine, the majority of which is exported to Southeast Asia.

Challenges persist; such as reliance on the U.S. and the limited production capacity of the wine industry. But Canada’s wine industry has taken the right steps in the last few years by diversifying markets and targeting high-growth customer segments. More growth may be on the horizon if the industry can continue to expand market penetration in emerging markets.

Ahmed Raza, Economic Analyst