The economic impact of America’s grape industry, including winegrapes, was more than $162 billion in 2005. More than 23,000 farms, 90 percent of them smaller than 100 acres, in all 50 states grow grapes, on 934,750 acres.

The first-ever comprehensive study detailing the wine, grape and grape products industry, produced by St. Helena’s MKF Research LLC, was released Wednesday and discussed at a press conference in Washington, D.C.

Congressman Mike Thompson (D-St. Helena), co-chair of the Congressional Wine Caucus, unveiled the report and said the wine industry plays a “tremendously important role in America,” adding the impact is important for the country, not just a district or a state. “The big number fuels local, state and the U.S. economies. As legislators we have to influence it in a positive way,” he said.

The wine and grape industry’s impact is larger than citrus, apples and strawberries, and the industry has grown 15 percent since 2003.

Wineries in all states

Noting that wineries exist in all 50 states, the congressman said  he remembers traveling to Iowa in the late 1990s and speaking with Dr. Gil Brown, a retired physician who was interested in starting a winery. “That winery has grown and they host a lot of events there,” he said. Last November Thompson traveled to Missouri and spoke in front of a crowd of 300 people, “all movers and shakers,” who wanted to know how their county could become the next Napa Valley. “Those people came out to hear about wine and what it can do to help the area,” he said.

Looking back 42 years when he was in high school, the Congressman said he could have bought a bottle of Beringer Cabernet Sauvignon Reserve for $4. Today, that wine costs $104 a bottle. “When I was growing up, no one thought the Napa Valley could grow to what it has become. It has grown beyond our expectations and as legislators we can do some things to help,” he added. He listed legislation dealing with protecting the land with conservation easements as “most important” and dealing with global climate change as critical. “We have to look beyond a couple of years and look to the next generations,” he said.

Climate shaped by policy  

Also speaking during the press conference were Barbara Insel from MKF Research, New York representative and Wine Caucus member Louise Slaughter and Jim Bedient, a grape grower and president of Winegrape Growers of America. He said, “As farmers, we are always talking about the climate — the weather outside — but we often forget that the business climate is just as important for our industry’s growth. We can’t control the weather, but the business climate is largely shaped by public policy, so it’s great that our elected officials now know the extent of our economic contribution and are eager to support our future growth.”

The study was released by the Congressional Wine Caucus, which is chaired by Thompson and Rep. George Radanovich (R-Mariposa). He added the caucus was hosting a Wednesday night reception and the study was being given to the legislators who attended.

The 30-page study measures the full economic impact of the grape, wine, grape juice, table grape and raisin industries in terms of employment, agricultural statistics, producer revenues and taxes. Included in the study are impacts from these industries, the first time all grape products have been measured in the same study.

Study’s findings

Some of the study’s key findings include:

• Grape products account for nearly 1.1 million full-time jobs with wages of $33 billion;

• Some 23,800 grape growers produce $3.5 billion in farm gate grape sales;

• $11.4 billion in winery sales revenues, based on 4,929 wineries in 2005, an increase of 70 percent in five years;

• Nearly $10 billion in retail and restaurant share of American wine revenue, 27.3 million wine-related tourist visits, responsible for an estimated $3 billion in spending; and

• Table grape sales of $3 billion, nearly $1.7 billion of grape juice and grape product sales and $560 million of raisin sales.

Industry challenges

The study also lists the challenges for the industry, including insufficient federal funding for research and education; a shortage of skilled labor for winemaking, vineyard management and in the vineyards; a challenging natural environment, including water use constraints, environmental issues and rising land prices; soft demand and lower prices for grape juice; the highly volatile market for winegrapes and shortage of quality grapes in emerging wine regions; the difficulty of securing adequate financing for wineries and vineyards; the consolidation of wine’s retail and wholesale channels and increasing pressure from imported wine.

The U.S. grape industry is largely concentrated in California, which accounts for virtually all table grapes and raisins, and roughly 90 percent of the nation’s wine production, with New York and Washington state each at about 3 percent and the rest of the states at 4 percent combined. Grape juice production is concentrated primarily in Washington state, New York, Pennsylvania and Michigan.

The entire report can be found on the Web site for MKF Research LLC, www.mkfresearch.com.