Wine is produced commercially in over 60 countries. While each wine producing country's domestic market consumes much of the wine they produce, 23% (by volume) is exported to international markets. The leading wine producers include the 'old world' wineries in France, Italy and Spain. These three countries are also the leading exporters. 'New world' producers, such as the US, Australia, Chile, Argentina and South Africa have been making both production and export inroads globally over the past few decades.

The US domestic wine market has grown from a retail value of $12.2 billion in 1995 to $18.2 billion in 1999. US wine exports have grown consistently from a base of $137 million in 1990 to $548 million in 1999 (Wine Institute 2000). While this export growth is impressive, US wineries also face increasing threats to their domestic market share due to globalization in the wine industry.

Until a few years ago the US wine market was largely a domestic industry, with some imports from France, Italy and Spain competing with US wineries. Recently, however, imports have risen to 20% of the US market. This has been fueled by the tremendous inroads made by Australian, Argentinean and Chilean wines, in particular, into the US market. For example, during 1995-1999, Argentina increased the value of their exports to the US by 243% and Chile by 152% (Wine Institute 2000). Since 1995, the unfavorable balance of trade for wine in the US has increased by 78% (Wine Institute 2000).

The US has only 4.2% (by volume) of the world export wine market, while producing 8% (by volume) of the wine produced in the world (Wine Institute 2000). Furthermore, the US wine industry exports only 13% of the wine it produces, while other countries have more intensely developed their export markets. For example, France, Italy and Spain all export more than 25% of the wine they produce, Australia exports over 40% and Chile over 80% of their production (Doering 1999). One might argue that these countries export more intensively because of the small size of their domestic market. While this may be true, US wineries run the risk of losing market share at home to those exporters who have been making inroads into the US market. A continued focus on the domestic market may place the US wine industry at a long‑term disadvantage in developing the requisite skills for competing in the increasingly competitive global market place.

Tariffs and trade barriers currently play a pivotal role in obstructing US wineries' access to various country markets.  As these barriers are reduced under the auspices of the World Trade Organization, greater export opportunities will open up. US wineries must be positioned competitively to exploit these new opportunities. Thus, for offensive and defensive reasons, it is timely and relevant to undertake a study of US wineries’ export performance, identify key success factors affecting export performance, and study their interrelationships to draw implications for global competitive strategy and management.

In this study, we first review the existing literature to develop our conceptual framework and hypotheses regarding the export performance of US wineries. We then discuss the methodology of the current study, and present the results. Finally, we derive implications from our study on what the management of US wineries should do to improve their export performance in the current global environment.