Press Release - January 17, 2007 - The United States wine, grape and grape products industries contribute more than $162 billion annually to the American economy, according to a comprehensive study by MKF Research LLC of Napa Valley unveiled today on Capitol Hill by the Congressional Wine Caucus. The Congressional Wine Caucus is a bipartisan, bicameral coalition of U.S. Representatives and Senators with an interest in the grape and wine industry, and currently includes 182 members.
This study uses a standard and widely used methodology which includes direct, indirect, and induced economic impact in order to present the full picture. The IMPLAN model developed by the U.S. Forest Service and University of Minnesota is used by many companies around the world as well as government agencies such as the Agricultural Statistics Service, Economic Research Services and Federal Reserve Bank.
The comprehensive study, titled, "The Impact of Wine, Grapes and Grape Products on the American Economy: Family Businesses Building Value," measures the full economic impact of the grape, wine, grape juice, table grape and raisin industries in terms of employment, agricultural statistics, product revenues, taxes, and many other indices. Included in the study are impacts from the grape, wine, grape juice, table grape and raisin industries, the first time all grape products have been measured in the same study.
"This landmark study confirms what we have known intuitively for a long time," said Congressman Mike Thompson of St. Helena, CA, co-chair of the Congressional Wine Caucus. "Grapes, wine, and other grape products are truly an economic catalyst with tremendous growth potential in all 50 states. Policymakers can maximize these economic benefits by supporting legislation that enhances the wine and grape-product industry. Our support will ensure that this all-American industry continues to produce superior products and provide a strong contribution to our economy."
Among the key findings:
"The numbers are really impressive, but there are many other benefits from grapes that should be considered," said Congressman George Radanovich of Mariposa, CA, who co-chairs the Congressional Wine Caucus. "By maintaining the vineyards that line my district in California and those throughout the nation, we help preserve our agricultural lands. Further, vineyards and wineries revitalize and support local economies in rural communities, and contribute over $129 million to charitable causes. As an added benefit, it is important to mention that grapes, grape juice and wine have been shown to be heart healthy."
Wine in particular has an enormous value-added component as a capital-intensive and labor-intensive industry which also generates "wine country" tourism with its economic multiplier effect around the country. The infrastructure, employees, and tourism expenditures are just three examples of why wine sales are only part of the picture in terms of total economic impact.
"The large and growing economic impact of the grape and wine industry contrasts with the economic situation of many other American industries," said Barbara Insel, Managing Director for Research at MKF Research LLC, who oversaw the study. "Whether declining or growing, the economic impact of an industry extends well beyond the direct impact on its employees to indirect impact on suppliers and induced impact on local communities. This is the 'ripple effect' which can be negative or positive, and in the case of the grape and wine industry is very positive and spread among many sectors of the economy."
"The grape and wine industry has been a powerful economic engine in New York State, contributing $6 billion annually to the state's economy and supporting many other businesses while enriching our dinner tables and culture," said Senator Hillary Rodham Clinton. "This report shows what we in New York have known for a long time-that our wine and grape growers have a great deal to contribute to the national economy. I am thrilled that New York's wine and grape growers have been able to contribute to this ever-growing, world class industry."
The 30-page report also identifies challenges and opportunities for the grape, wine, and grape products industries, including:
"This report gives us a road map for partnering with the private sector to stimulate further industry growth," said Senator Debbie Stabenow of Michigan. "A recent study revealed that the grape, grape juice and wine industry contributes over $764 million to our state economy, so policies encouraging development benefit everyone."
Bridging the challenges and opportunities are several emerging trends which bode well for the industry's future. These include the grape and wine industry's leadership in proposing and adopting sustainable agricultural practices; the wine industry's increased professionalism and efficiency; and rapidly improving grape and wine quality. Key opportunities include:
The report itself is an excellent example of the last point. The study was made possible by the collaborative support of WineAmerica, Wine Institute, Winegrape Growers of America, and the National Grape and Wine Initiative, as well as cooperation from vintner and grower organizations in Illinois, New York, Pennsylvania, Tennessee, Texas and Virginia, and the states of Missouri, North Carolina, and Michigan and Texas Tech University, with overall coordination of industry groups by the New York Wine & Grape Foundation.
"As a grape grower, I am delighted by this study and very grateful to the Congressional Wine Caucus for unveiling it," said Jim Bedient, a grower of wine grapes and juice grapes in New York's Finger Lakes region, and current President of Winegrape Growers of America. "As farmers, we are always talking about the climate-the weather outside-but we also recognize 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. Immigration reform is an urgent priority for growers throughout the country, along with increased funding for research and promotion of specialty crops like grapes."
The U.S. grape and grape products industries are 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 wine industry's explosive growth nationwide, extraordinary value-added benefits, and existence in all 50 states provide great potential for working with federal and state officials to further enhance growth through research and promotion.
MKF Research LLC of St. Helena, CA is the leading research source on the U.S. wine industry, and is jointly owned by Global Wine Partners and Frank, Rimerman & Co, CPAs. Located in Napa Valley, the firm conducts original research on the business of wine and wine market trends, publishes a number of industry studies, provides business advisory services and custom business research for individual companies and investors, and conducts a number of industry seminars including the invitation-only MKF Research Executive Wine Summit. More information about MKF Research LLC, and access to the national economic impact study, is available at www.mkfresearch.com.