Grape growing economy

Staff Writer
The Chronicle Express
Yates County is at the geographic heart of the largest wine and grape region in New York, and the seeds for the industry growth were planted here when vineyardists established the N.Y. Wine & Grape Foundation in Penn Yan.

The full economic impact of New York grapes, grape juice, and wine in 2012 was $4.8 billion for New York State, according to a new study conducted by Stonebridge Research Group of Napa Valley for the New York Wine & Grape Foundation. Wine sales from non-New York wines generated $4.6 billion in additional economic impact, bringing the total impact from grapes and wine to $9.4 billion.

The study, which updates two previous ones based on 2008 data and 2005 data, reflects the strong and accelerating growth of the New York grape and wine industry.

Much of that growth can be credited to work that began right here in Penn Yan in the 1980s, and Yates County, in the heart of the Finger Lakes Wine Region, posts some impressive figures in overall industry growth.

The $4.8 billion of total economic impact from the New York industry represents a 27 percent increase over the $3.76 billion in 2008 and 53 percent spike over the $3.14 billion in 2005, reflecting a combination of significant industry growth as well as the ability to obtain more data. Similar factors explain the increase in the grand total to $9.4 billion from $7.02 billion in 2008 and $6.0 billion in 2005.

“The New York grape, grape juice, and wine industry is a major economic engine for the State of New York,” said Jim Trezise, President of the New York Wine & Grape Foundation. “Wine is the ultimate value-added product with huge economic multiplier effects for many affiliated industries like farm equipment, tank and barrel manufacturers, packaging, transportation, tourism, and much more. The State of New York, especially in recent years, has been a great partner with our industry, and clearly their investment is paying off in spades.”

Trezise says since industry growth accelerated in 2013 and the study is based on 2012 data, all figures should be viewed as conservative. Some highlights:

• 320 Wineries

• 52 Winery Satellite Stores

• 37,000 Acres of Vineyards

• $52,252,000 Value of New York Grapes

• 24,913 Full Time Equivalent Jobs

• $1,142,629,030 in Wages Paid

• $552,962,804 in Winery Revenue

• $71,590,910 Retail Value of Grape Juice Products

• 5.29 Million Wine-Related Tourist Visits

• $401,469,999 Wine-Related Tourism Expenditures

• $408,234,691 New York State & Local Taxes

• $5 Million in Charitable Contributions

Yates County’s part

The Finger Lakes is the industry leader for all the grape-growing regions of New York. Trezise estimates that 75 to 80 percent of the total impact is generated here. At the heart of the Finger is Lakes, Yates County is home to 40 wineries, accounting for 12.6 percent of all New York wineries in its 62 counties.

Yates also has 106 grape farms with 5,348 acres of vineyards, up from 4,862 acres in 2006, according to Hans Walter Petersen, Viticulture Specialist of the Yates County Cornell Cooperative Extension. This represents a 10 percent increase in Yates County while vineyard acreage in other New York regions remained flat or actually declined.

The top three grape varieties grown in Yates remain Concord, Catawba, and Niagara; older, hardy native varieties used for both juice and wine, but Petersen says the general trend is swinging toward the European varietals used exclusively for wine production.

Ripple effect

“The New York grape and wine industry’s growth has been accelerating since we conducted the first study in 2005,” says Barbara Insel, president and CEO of Stonebridge. “The industry has clearly weathered the Great Recession, and the strong support from the New York State government in the past few years has clearly given the industry a major boost.”

Insel conducted the study using a combination of in-depth interviews with industry members, publicly available data from government sources, and the “IMPLAN” model for economic analysis which uses input-output analyses and tables for over 500 industries to estimate regional and industry-specific economic impacts of a specific industry. The model includes “direct” effects such as employment at wineries; “indirect” effects such as the economic benefits to suppliers of the industry; and “induced” effects such as workers spending their income in local businesses. “The economic status of major industries has a huge ripple affect on many business and individuals, causing a downward spiral in the case of the former auto industry crisis or an upward spiral from an industry like ours which is growing strongly,” says Trezise. “A rising tide lifts all boats, and that’s what our industry has been and done, especially in recent years.”

More than vines and wines

The relative economic importance of supporting “local” wines is also illustrated by the study. Wine wholesalers reported that only 7 percent of their sales were New York wines (so 93 percent are from other countries or regions), which is actually an improvement from previous studies. Despite those percentages, the relative economic impact from the New York wine industry is $4.8 billion versus $4.6 billion from all those non-New York wines. That’s because of all the other local businesses that New York wineries stimulate from tank manufacturing to packaging and tourism, and all the jobs associated with them. Since 2008, the number of full-time employees stimulated by New York wine industry growth has increased by 20 percent, with part-time and seasonal workers increasing significantly as well. In addition, the sales of New York wines within New York have much less of a “carbon footprint” than do wines shipped from Europe or South America.

In addition, as the industry continues to grow, it will attract more suppliers to locate within New York State, such as barrel, cork and closure producers which have invested in other major wine-producing states like California and Washington. The dramatic success of Vance Metal in Geneva, in fulfilling the need for quality wine tanks is a perfect example of how wine industry growth stimulates investment and job creation in the supplier sector.

This study was made possible through funding secured by State Senator Patty Ritchie, Chair of the Agriculture Committee, with support from Assembly Agriculture Committee Chair Bill Magee, and approval by Governor Andrew M. Cuomo. We are very grateful not only for the opportunity to conduct this study, but also for their support in many other ways.

Stonebridge Research Group LLC is a leading source of data and advisory services for the wine industry, having conducted numerous economic impact studies for various wine regions and countries around the world.

The New York Wine & Grape Foundation was created in 1985 by a law passed unanimously by the state legislature and signed by Gov. Mario M. Cuomo to address an economic crisis within the state’s grape and wine industry through programs of promotion and research. Due to the long-term partnership between the state and the foundation, the industry went from crisis to being the fastest growing part of the state’s agriculture and tourism sectors.

State organization originated in Yates County

The true beginning of the Wine & Grape Foundation was when the New York State Wine Grape Growers (NYSWGG) hired Trezise in early 1982 to create programs of promotion and research with funding from an industry-funded Marketing Order that was passed in 1981. Unfortunately, the Marketing Order was challenged in court and overturned on a technicality, which meant the budget for those programs disappeared overnight.

However, the committee of grape growers continued digging into their empty pockets to keep their office open in Penn Yan, and a year later the New York Association of Wine Producers (NYAWP) joined with NYSWGG to form a new umbrella organization, the New York Wine Council, of which Trezise was named President. “That gave me another year to drive to Albany every week and convince the legislature and Gov. Mario Cuomo this was a potentially important industry that was in danger of extinction. Happily, I found a receptive audience, especially with the governor,” and they were able to get four major pieces of legislation passed in 1984 and 1985, including creation of the New York Wine & Grape Foundation, which have literally turned the industry around. Trezise became president of the Foundation in November 1985.

Trezise credits several of the Yates County people who were very involved in the creation of the NYWGF: Neil Simmons (a large grower on Bluff Point), Gene Pierce (of Glenora Wine Cellars), John Martini (of Anthony Road Wine Co.), and Juanita Spence, who was the office manager when the organization hired him.

After more than 20 years in Penn Yan, the organization moved to Canandaigua in June 2006 when the New York Wine & Culinary Center opened. “We are one of the four major partners (in the center), and part of our commitment was that we would lease office space,” says Trezise, who remains a Yates County resident. “So my commute went from 3 miles to 30!”

Additional reporting by John Christensen.