SACRAMENTO -- California wine producers  shipped an estimated 3.6 percent more wine to U.S. markets last year, and higher-end wines such as those made in the North Coast could benefit from a "transition" in supply and consumer tastes that favor quality and distinctiveness, according to experts at a major wine industry conference Wednesday.

California shipments increased to 216 million 9-liter cases last year from 207.7 million in 2012, while U.S. wine shipments rose 2.7 percent last year to 370 million cases, according to estimates by Gomberg Fredrikson & Associates based on state and federal data through October or November.

"The industry is in a state of transition from a severe shortage to a more balanced market," said industry analyst Jon Fredrikson of the Woodside-based firm to about 1,500 professionals in a Hyatt Regency ballroom during the "State of the Wine Industry" panel presentation Wednesday at the Unified Wine & Grape Symposium. More than 13,000 are expected to attend the gathering this year.

That transition came as a shortage of wine from smaller 2010 and 2011 California vintages, created a surge in grape and wine prices in the past two years, Mr. Fredrikson said.

Last year wasn't great for wine sales, but the industry is positioned for "strong" growth this year, he said, noting that wine shipments increased 50 percent since 2001. Yet alcoholic beverage sales growth slowed overall, he noted. Spirits sales rose 1.3 percent, while beer slipped 1.4 percent, despite growth in "craft" spirits, beer and cider.

Small wineries have been benefitting from more sales directly to consumers, now reaching 40 states nine years after the 2005 U.S. Supreme Court's Granholm decision started to open such access, he noted. Increasing e-commerce by physical and virtual wine shops are providing even more options for producers, while the "flash" sale website phenomenon has been waning as winery inventories dwindled, he said.

The volume of direct sales grew 9.3 percent last year, according to the latest figures from ShipCompliant, a major wine shipping regulatory compliance conduit.

Another important sales channel for high-end producers is the "on premise," or wine consumed in restaurants, airlines, cruise ships and other hospitality venues. Though the National Restaurant Association's Restaurant Performance Index recovered slightly at the end of last year, the on-premise market was "sluggish."

One cause is the number of slots available on wine lists at fine restaurants still haven't rebounded to levels before the recent economic recession.

"There have been complaints about paring of wine lists," Mr. Fredrikson told the Business Journal after his presentation.

Yet, on-premise sales of wine by the glass are "exploding" in growth. Wine shipped to accounts in kegs or other bulk containers for dispensing in glasses by the tap at the bar is likely to increase dramatically this year, he said.

As the Journal reported in July, Free Flow Wines, a significant repackager of wine into kegs, has expanded to a Napa production facility dramatically because of demand.

A troubling trend for the wine industry long-term is a drop last year in food-store sales of entry-level wine, or those below $3 a bottle. However, higher price categories enjoyed high single-digit or low double-digit gains for last year. Overall, wine sales volume in grocery stores last year increased just 0.1 percent, or basically unchanged, even slower than 0.9 percent growth in 2012, Mr. Fredrikson noted from Nielsen figures.

"Some consumers in the U.S. are willing to spend more for something different," said symposium panelist Mike Veseth, PhD, editor of The Wine Economist online magazine and professor emeritus of international political economy at University of Puget Sound.

Key to that trend is the "echo boomer" or "millennial" generation, who have similar affinity for wine as "boomers" but are information savvy and open to exploring imported wine brands as well as cocktails. Though the wine industry has become more global in supply, it also has become more segmented by quality and unique characteristics, according to Dr. Veseth.

"The great wine crisis of 2013 is past, but the global wine market is here to stay," he said.

Brands are being created that are more about consistent taste than specific place, blending bulk wine from around the world, he noted.

Even as the first California rain in a month and a half fell in Sacramento on Wednesday, near the top of mind for wine supply at the symposium was is the California drought. If the dry conditions continue, it could cut the 2014 winegrape crop statewide by 4 percent to 3.885 million tons from a record 4.05 million tons crushed in 2012, the symposium audience heard from Nat DiBuduo, president of Allied Grape Growers, which markets grapes and wine for 600 members from the North Coast and around the state.

Initial state figures for the size of the 2013 winegrape crop in California are set for release for early February.

The trend line of roughly 3 percent growth in California wine shipments per year is expected to be roughly in line with projections for winegrape production in the next few years, he said.

The estimate for the size of the 2013 North Coast winegrape crop is 540,000 tons, Mr. DiBuduo told the audience. That would be down 7 percent from the record-sized 2012 harvest but up 15 percent from the four-year average of nearly 471,000 tons.

On top of the large increase in tonnage for Sonoma County pinot noir in 2012, plantings of pinot noir in high-end wine regions of Sonoma, Napa and Santa Barbara counties are expected to be roughly half of where the variety is going in statewide, Mr. DiBuduo said, based on shipments from vine nurseries. Cabernet sauvignon vines accounted for the largest share of 2013 nursery sales -- 29.4 percent -- followed by 13.7 percent for chardonnay and 12.5 percent for pinot noir, according to an Allied Grape Growers survey.

Much of the North Coast new vines are for replanting, he said.

"There is not a shortage of grapes, that's for sure," Mr. DiBuduo said.

At this point in California's more-dire water woe, wineries aren't canceling vineyard-planting commissioned under grape-purchase contracts held by his organization's members, he said.