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Renewed U.S.-Cuba ties good news for CA wine



The first thing I thought, when I heard that the U.S. is about to normalize diplomatic relations with Cuba, was, “Oh, man, that’s really good news for California wine.”

Before the brouhahas of the early 1960s, Cuba was a favorite tropical destination for American vacationers, especially those along the East Coast. Today, people go to Costa Rica, Belize, the Virgin Islands and Puerto Rico; back then, it was Havana, just 90 miles across open water from Florida. Fashionable resorts, like the Hotel Nacional, lined the Malecón, attracting tourists with cash to spend. And spend it they did, in restaurants and bars, until the break with the U.S. and subsequent embargo sent the Cuban economy into a tailspin.

But with this resumption in relations, there’s every reason to believe that U.S. tourism will once again explode; certainly, expectations are high. Forbes last week, in an article called “Five Industries Set to Benefit from the U.S.-Cuba Thaw,” listed “Tourism” in the top slot, writing that Cuba will be an attractive stop for architecture buffs, food lovers, music lovers, and those interested in literature and the arts.” And where food lovers go, there is wine.

And what wine is more natural to pour in Cuba than California wine? Yes, there’ll be plenty of Bordeaux and Burgundy, and probably lots of German Riesling in that warm climate, but really, California wine is likely to dominate restaurant wine lists, as it dominates wine lists here in the States. At least, that’s what Napans believe. An article last week in the Napa Valley Register described how Napa Valley winemakers are weighing the Caribbean nation’s potential to become its newest market,” although the article also warned that direct sales to Cubans themselves, rather than to wealthy tourists, are likely to be minimal for quite some time, because Cuba remains a poor country. Last summer, of course, a group of Cuban sommeliers famously visited Napa and Sonoma. At that time, they said they “aren’t sure how long it will be before California wines will be in their Cuban restaurants.” So the timing is iffy, but not the interest: the somms want our wine, and they’re going to get it. Pacific Northwest vintners, too, are eying the possibilities.

Because news of the improved U.S.-Cuba ties came so unexpectedly and rapidly, it’s not likely that very many California wineries were prepared for it. I would imagine that late last week, and continuing on into this Christmas week and the New Year, winery sales and marketing teams will be meeting on a contingency basis to figure out how to take advantage of the new developments. They should. Every market counts—and the Cuban tourist market (which will be international in scope, not just comprised of Americans) is likely to eventually be very profitable.

U.S. tourism in Cuba isn’t a done deal—it will take some action by Congress to fully open it up. But, as Bloomberg Business Week reports, even the prospect of travel has provided an exciting jolt of new possibilities. Namely, hordes of U.S. tourists shelling out to visit the formerly forbidden country.” When it happens, those tourists are going to be shelling out a lot of money for California wine.

  1. Given their shared language, history, and culture, and the lower cost-of-goods-sold of their wines, I would project that Spanish and Argentine and Chilean wineries will benefit ahead of California wineries (especially pricey Napa wineries) in garnering wine list placements in touristy Cuban restaurants.

    The Cuban government is dictates what goods gets imported into the country. Normalizing diplomatic relations with the U.S. doesn’t mean our products gets “most favored nation” status.

    As a portend, look at our commerce relations with communist nations Russia and China. U.S. made products have not captured significant market shares in those countries.

    Further, we run sizable trade deficits with them.

    Russia ($16 billion deficit in 2013):

    China ($318 billion deficit in 2013):

    As long as the Castro brothers rule the country, the Cuban government won’t become our “new best friend” anytime soon. Self-evidently the suspicion and antagonism between the two nations runs long and deep.

  2. ERRATA.

    The Cuban government dictates what goods get imported into the country. Normalizing diplomatic relations with the U.S. won’t mean our products get “most favored nation” status.

  3. A call out to Bill Haydon:

    Drawing upon your East Coast wine distribution experience, and that of your friends in the trade, how well do California wines succeed in garnering Miami restaurant wine list placements?

    (Not a small consideration: the nation’s leading distributor Southern Wine & Spirits is headquarted in Florida.)

    That marketplace wine adoption model will likely be replicated in Cuba . . . as Miami-based Cuban emigres and first generation Cuban-Americans will be the first to “export” their business model to Havana.

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