Source: https://www.winebusiness.com/
Congressional representatives Mike Thompson (D-CA) and Dan Newhouse (R-WA), co-chairmen of the Congressional Wine Caucus, announced that the economic impact of the wine industry on the American economy in 2022 totaled more than $276 billion. Sponsored by WineAmerica, the National Association of American Wineries based in Washington, DC, the study was conducted by John Dunham & Associates, an economic research firm located in Longboat Key, FL, that also produced WineAmerica’s economic impact study in 2017. In comparison, the report in that year showed that the wine industry had a $219.9 billion economic impact on the American economy.
The table above shows the data from the 2017 Economic Impact Report compared to the study in 2022:
It is not surprising that the wine industry has a greater impact on the national economy today that it did five years ago. More wineries have opened in many states East of the Rockies, which is reflected in the report’s number of producers, and existing wineries are in many cases producing more wine. More wineries and more volume of wine impact the number of jobs in the wine industry, and the total amount of annual wages for those jobs.
However, WineAmerica’s 2022 National Economic Impact Study of the Wine Industry is more than a basic count of the number of wineries in the country. It is a comprehensive report that evaluates economic impact at three levels: direct, indirect, and induced. State reports often focus on direct and indirect impacts, and may not include the induced, or multiplier, effects that are part of the WineAmerica report.
Jim Trezise, president of WineAmerica pointed out in his WineAmerica Perspectives report on September 30, 2022, that “while the production of wine has a major impact, it’s sales – at wholesale, retail (especially), and tourism-related levels – that have the greatest impact. In addition, there are 675,336 retail jobs, or 9 times as many in the winery sector, reflecting the importance of selling the wine if you want to stay in business. In any case, people in many sectors are employed because of that magical elixir we call wine.
Bottom line: Wine is the ultimate value-added product.”
In addition, there are several other factors that have influenced changes between the numbers reported in 2017 and in the most recent report this year. This year’s report shows the number of vineyard acres at 119,520, while the “acres-grapes” in 2017 was 677,629. This actually is not a direct comparison, as the lower number is acres of grapes grown by vineyards not connected with a winery, while the larger number includes both acres of grapes grown by wineries plus the acres in independent vineyards.
According to the “Methodology and Documentation” section of the WineAmerica report, “Vineyards that were part of a winery operation may be double counted since there is no data available to separate independent vineyards from vineyards which are owned and operated by a winery.”
The second sector that shows a downturn is local tourist expenditures, from $17.6 billion+ to $16.69 billion. What is most surprising about the lower number is that it isn’t lower, when the impact that Covid-19 had on travel is taken into consideration. Tourist visits from out-of-state dropped in California as well as other winery locations that depend on travelers for their in-winery sales. However, wineries on the East Coast (and elsewhere) redesigned their tasting rooms, expanded outdoor patios and added tents to entice day-trip visits from wine tourists in New York, Philadelphia, Baltimore and Washington, DC, as well as other metropolitan areas. Some wineries in the East have reported higher wine sales at their winery than before Covid.
There also is an explanation for the drop in federal, state and local taxes. WineAmerica supported the Craft Beverage Modernization and Tax Reform Act that was passed by Congress in 2917. Since January 1, 2918, wineries have been saving substantial amounts on their taxes. Trezise points out in each Perspectives report that “The ‘Old Rate’ Column reflects the former Small Producer Tax Credit rate, so underestimates the true savings for wineries of many sizes.”
Trezise told Wine Business Monthly that WineAmerica “has a new priority for next year’s Farm Bill: Getting authorization and funding for USDA (National Agricultural Statistics Service) to revive the vineyard surveys it used to do but has not since 2011. As in 2017, our 2022 study revealed how totally lacking good vineyard statistics are in the US, even in states like California and Washington, and why we need to fix that. I’m compiling support for that effort now.”
Updated, current information about the numbers of vineyards and other information about those vineyards would be helpful to wineries and vineyards at the state level, as well as nationally.
The national data contained in WineAmerica’s 2022 National Economic Impact Study of the Wine Industry, plus methodology and an explanation of economic impact terms, is available at www.wineamerica.org/economic-impact-study. Full state economic reports for individual states are now available at the end of the information about the national data. When a state’s name is clicked, the economic impact study for 2022 for that state will appear in a format similar to that of the national study.