The next time you uncork a bottle of wine you may be helping to fuel one of Canada's hottest industries.

According to From the vine to the glass: Canada's grape and wine industry, a new survey that examined Canada's wine industry from 1993 - 2005, domestic sales have pushed growth at a remarkable pace over the last 8 years.

Although relatively small, Canada's wine industry had the 11th highest growth rate amoung 215 industries between 1997 and 2005. During this time its real domestic product increase (7.1%) was more than double the growth for the nation as a whole (3.0%).

Better quality grapes, which in turn led to an increase in domestic sales, can explain much of the success. When growers decided to produce wines from quality grapes (viniferaand French hybrid varieties) rather than native species (Labrusca) grapes in the late 1980s and early 1990s they were sowing the seeds of their own success.

While the growth is laudable, the industry as a whole remains relatively small. Canada's wine industry accounted for just 0.03% of the economy-wide gross domestic product in 2005. It employed close to 2,500 persons in 2004, which represented 0.14% of all manufacturing jobs.

Here are some key findings from From the vine to the glass: Canada's grape and wine industry:

• Canadians' taste for their own wines spurred the sales growth in this industry, as almost all of the increase has been the result of domestic sales.
• Between 1992/1993 and 2004/2005, total sales of Canadian wines (including cider, sparkling and coolers) increased by $557.4 million. Of this amount, $517.2 million or 93% came from the Canadian retail market.
• Exports also increased, but remained at relatively low levels compared with domestic sales. The most important export markets for Canadian wines are the United States and Taiwan.
• In total, the value of wine sales in Canada exceeded $4.2 billion in the fiscal year ending March 31, 2005. Consumers bought a record high volume of 360 million litres of wine, of which 40% were Canadian brands and 60% imported.
• Canadians are still very much a beer-drinking nation. But more and more, wines are making inroads.
• For the first time, the value of sales of wine has surpassed that of spirits in Canada. In the fiscal year ending March 31, 2005, wine accounted for 25.2% of the value of sales of alcoholic beverages, compared with 24.3% for spirits, the first time wine has jumped into second place. Beer accounted for 50.4%.
• Quebec residents bought the highest amount of wine, averaging 18.2 litres per adult in 2005. They were followed by consumers in British Columbia who bought 16.2 litres on average.
• However, the biggest increase occurred in Nova Scotia, where sales doubled during this period from a low of 6.4 litres in 1993 to a high of 13.6 litres in 2005.

From the vine to the glass: Canada's grape and wine industry (11-621-MIE2006049, free) examined the transformation in the Canadian grape and wine industries and the evolution of wine sales in Canada from 1993 to 2005. It is now available in Analysis in Brief series from the Publications module of the Statistics Canada website.

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