Virginia’s record wine sales show the Old Dominion’s for real

Maybe this regional wine thing is for real after all.

Virginia Gov. Robert McDonnell announced this week that Virginia wineries sold nearly 485,000 cases of wine in 2012, a new record. Virginia wine sales have risen by an average of more than 8 percent per year over the last three fiscal years, according to the Virginia Wine Marketing Office. Wine tax collections added $1.7 million to the commonwealth’s coffers.

This is quite impressive, considering the U.S. economy has been stagnant to say the least over that time period. People are supposed to be “drinking down,” and Virginia wine isn’t exactly cheap. (Though I’ve always argued that it isn’t – usually – overpriced.)

There’s more good news: Sales to distributors outside of Virginia increased by more than 24 percent in 2012, to more than 14,000 cases. This is a sign of a maturing wine industry. “Local” wines are traditionally sold primarily at the winery, but Virginia wines can now be found as far away as Illinois and Florida, as well as in Washington DC, a traditionally tough market for Virginia. (Lee had trouble crossing the Potomac, too, after all.)

Interestingly, the biggest driver of Virginia’s growth last year was a 300-percent surge in exports. The primary markets were the U.K. and China. The former is not such a surprise – Chris Parker’s efforts to export Virginia wine to his homeland have been well chronicled.

But China? Aren’t the new Chinese wine drinkers supposed to be chasing the pricey first-growth Bordeaux and anything with high scores from that Singapore-based wine magazine, The Wine Advocate? (Still no Virginia coverage, or at least not much, from the Parker crowd, apparently.)

I first heard about Virginia wine pushing into the China market a few years ago from Bill Moses, of Kluge Estate Winery. It seemed at the time a desperate effort to save Kluge Estate from bankruptcy, and it probably was, but Moses was right – only now it’s Barboursville and other Virginia vino exported by the new Chinese owners of the Winery at LaGrange in Haymarket driving those sales.

Is this growth sustainable? The overall sales growth (in cases sold) last year was only 1.6 percent over the previous record set in 2011. Virginia probably still has some room to grow in terms of acreage planted to vines and production, and certainly quality improvements continue to impress. McDonnell deserves a lot of credit for his efforts to promote Virginia’s wine industry, both at home and in export markets like London, Bangalore, Shanghai and San Francisco. But he has only one more year in office and cannot run for re-election, even though many vintners might want to appoint him Governor-for-Life. Hopefully this growth and the maturity it represents have put Virginia wine on firm soil, with a gentle but steady upward slope.