Report: Wine industry generates $11 billion a year

By BILL KISLIUK
Register Editor

Confirming that the wine industry is a dominant force in Napa County and a significant one for the state and national economy, a report released Wednesday states that the Napa County wine industry generated nearly $11 billion in local economic activity and more than $42 billion around the country in 2006.

The study was released by the Napa Valley Vintners, a trade association of more than 300 local wineries, and completed by Stonebridge Research Group, a Napa-based firm that tracks trends and economic opportunities in the wine industry.

The report takes into account everything from wine industry wages at local vineyards, bottling lines and cooperages to sales at restaurants, retail outlets and through beverage distributors.

It is the second such study of the local wine industry’s economic impact. A survey done in 2002 and released in 2005 showed the industry generated $9.5 billion in local economic activity. The new report finds a 15 percent jump between 2002 and 2006.

“Napa Valley’s wine is the heart of the county’s economic prosperity and certainly its international prominence,” stated the report, completed by Stonebridge President Barbara Insel.

“Napa Valley produces just 4 percent of California’s winegrapes, yet the region is responsible for nearly 30 percent of the economic impact of wine in California, and nearly 34 percent of the economic impact of California’s wine to the U.S. economy.”

The report found that the industry was responsible for nearly 40,000 full-time jobs in Napa County in 2006, where the total population is roughly 130,000, and more than 230,000 jobs around the country.

Local wages earned were roughly $1.5 billion. According to the report, some 3.5 million wine-related visitors spent $714 million here.

The study took into account direct, indirect and what are known as induced economic effects in reaching its conclusions.

Direct effects include employment and consumer spending at wineries, vineyards and through distributors. Indirect effects measure the way the industry creates growth in related industries, such as vineyard nurseries, trucking companies and other suppliers of goods, services and equipment.

Induced effects include private spending by wine industry workers on everything from groceries to health care.

The report states the industry has a “multiplier” effect. “The revenue derived by the wine industry becomes income for other workers and firms, who spend more money on other goods and services.”

Linda Reiff, executive director of the Napa Valley Vintners, said, “Especially during these tough times it is encouraging to know that we have a strong industry helping fuel our local and greater economy. We are also fortunate to have had the support of our community to uphold land protection measures that keep Napa County rural and in agriculture — successful agriculture — which is rare and valued.”

Reiff said that the current economic climate has had an impact on wineries, with some experiencing flat sales and others making modest gains.

“The industry has weathered downturns before,” said Reiff. “This report shows the industry is strong and therefore may be able to weather this one better.”

Register Features Editor Sasha Paulsen contributed to this report.

By the numbers: Napa County wine

A look at annual figures for economic activity of the wine industry.

Wine-related jobs in Napa County    39,900

Wine-related wages earned in Napa County    $1.5 billion

Cases of Napa Valley wine produced    9.2 million

Wine-related tourism spending    $714 million

Wine-related charitable donations    $72.9 million

Local and state taxes paid within Napa County    $601 million

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