California wine industry’s economic impact growing, study finds

Aug 17, 2016

(CP) - The California wine industry’s contributions to the state and national economies have grown significantly over the last few years, a study by a pair of industry groups has found.

The wine and winegrape sector and related businesses contribute $57.6 billion annually to the state’s economy, up 17 percent from seven years ago, and $114.1 billion annually to the U.S. economy, a rise of 19 percent over the same period.

These were the key findings of a report commissioned by the Sacramento-based California Association of Winegrape Growers and the San Francisco-based Wine Institute, which credits wineries and vineyards in the Golden State with creating 325,000 jobs within the state and 786,000 jobs across the nation.

The report, “The Economic Impact of California Wine and Grapes 2015,” was prepared by John Dunham and Associates of New York and presented recently to state legislators at an informational hearing at the University of California-Davis.

The study continues a trend in which wine has grown in sales and popularity despite the recession and slow economic recovery, proving the commodity is “an economic engine for our nation,” asserted Bobby Koch, the Wine Institute’s president and chief executive officer.

The industry has also weathered California’s five-year drought, although wine grapes are more drought-tolerant than many other crops.

The industry’s growth in value reflects a continuing movement by consumers toward more premium wines, said Gladys Horiuchi, the Wine Institute’s spokeswoman.

“People are drinking more higher-value wines,” Horiuchi said. Moreover, “I think wine has gained a lot of traction as far as being more of a mainstream beverage at meals,” she said.

California Association of Winegrape Growers president John Aguirre said in a statement that tasting rooms in the wine country attracted nearly 24 million tourist visits last year, and “the commitment of California growers and vintners to sustainable practices” supports 325,000 jobs while also providing “important social and environmental benefits.”

The report measures economic impact in terms of employment, wages, taxes, tourism spending and visits, and charitable giving, according to a news release. It includes businesses that benefit directly and indirectly from wine production and sales.

In addition to sales and jobs, the study found the state’s wine industry paid $15.2 billion in state and federal taxes in 2015 and averages $249 million annually in charitable contributions.

The increases came despite a 10 percent drop in the average price of all grape varieties in California in 2015, to $671.31 per ton, according to the National Agricultural Statistics Service.

However, grapes from the state’s most famous regions went up in price, by 6 percent in Napa County to $4,336 per ton and by 5 percent in Sonoma and Marin counties to $2,443, the agency reported.


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