San Francisco, Calif. -- Domestic sales of California wines increased just 2% in 2007 compared to the previous year, according to a Gomberg-Fredrikson Report analyzing last year's wine industry data. But although direct sales make up just a sliver of wine industry revenue, that sector's increases for the year were remarkable.

According to Katie Hoertkorn, founder of Napa, Calif.-based New Vine Logistics, direct sales increased 7.4% from 2006, indicating the market continues to build upon the 33% gains that were seen in 2006, attributed to the Supreme Court's Granholm v. Heald decision, the ramifications of which are still unfolding across the country.

In Georgia, Gov. Sonny Perdue currently is considering the fate of one such direct wine sales bill. Lawmakers in both the state House and Senate already approved the bill, which would allow state residents to use the Internet to buy 12 cases of wine per year from a single winery, regardless of whether or not it is in Georgia.

"There is obviously an interest in wine everywhere. (Consumers) read about these wines in the magazines and reviews," Gladys Horiuchi of the California Wine Institute (WI) said. However, if nearby retailers and restaurants don't carry a certain bottle, more wine drinkers are going to the winemaker directly.

Compounding the issue, Horiuchi told Wines & Vines, is that the number of distributors has been decreasing during the last 20 years, while the number of U.S. wineries has exploded.

"It's very difficult for some wineries to get distribution in various states. Wholesalers can only carry a portfolio of so many brands," Horiuchi said. "Even if you do get a distributor, it's hard to get distributor attention because of the number of wines they represent."

More than 35 states allow wineries to ship directly to consumers, according to Steve Gross, WI director of state relations, and more than 80% of the U.S. population lives in states where the practice is accepted.

"The bar keeps moving to where we can offer shipping to more consumers in more states," Gross said, adding that more groups are now available to help wineries apply for permits and meet compliance for direct sales with state regulation agencies.

"Wineries are finding this is a profit center within their wineries," he said. "What they're doing is targeting the states that they feel they have the best business in."

In other news from the Gomberg-Fredrikson Report, consumers purchased 4% more wine from U.S. food stores in 2007 than they did during the previous year. Sparkling wine consumption edged up 1%, and U.S. wine exports increased 8.6% in value and 12% in volume, the disparity likely a result of a lower dollar value in Europe, the largest regional buyer of U.S. wine. For more information, visit wineinstitute.org.