San Francisco, Calif.—The Wine Institute announced California wine shipments hit a new record in 2016 reaching $34.1 billion after a 4.6% increase over the previous year. Total shipments rose 2% to 238 million cases in the United States. Sales to all markets, including exports, totaled 285 million cases in 2016.

“California wines in the U.S. market have increased from 191 million cases shipped in 2006 to 238 million cases in 2016,” said Jon Moramarco, founder and managing partner of bw166 in the statement released by the Wine Institute. Moramarco and bw166 purchased The Gomberg-Fredrikson Report with Wine Communications Group the parent company of Wines & Vines last year. “The growth trend has been driven by population, which is up more than 12% over the last decade, and by the fact that baby boomers, traditionally the large population segment of frequent wine consumers, have been joined by millennials aged 21-38 who are also driving the growth in wine consumption.”

Moramarco pointed out several trends in the U.S. marketplace. Both major retailers and distributors continue to consolidate, creating fierce competition and crowded sales channels. Consequently, many wineries are targeting niche sales channels, such as tasting rooms and direct-to-consumer sales, which have now reached more than 4% of the total volume. Another trend is that California wines selling for $10 and above are showing growth, accounting for 19% of the volume and 40% of the value in U.S. food stores. Wines under $10 are flat or down, but still holding 81% share of the shipment volume and 60% of the revenues.

U.S. wine exports, 90 percent from California, reached a record $1.62 billion in winery revenues in 2016. Volume shipments were 461 million liters or 51.2 million cases. The European Union’s 28-member countries were the top market for U.S. wine exports, accounting for $685 million; followed by Canada, $431 million; Hong Kong, $99 million; Japan, $87 million; China, $82 million; Mexico, $24 million; South Korea, $23 million; Switzerland, $19 million; Singapore, $14 million; and Philippines, $13 million.