Economic impact of grape, juice, wine: $4.8B
FINGER LAKES—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.
The $4.8 billion of total economic impact from the New York industry represents a 27 percent increase more than the $3.76 billion in 2008 and 53 percent spike more than 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 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.”
Since industry growth accelerated in 2013 and the study is based on 2012 data, all figures should be viewed as conservative.
• 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 and local taxes.
• $5 million in charitable contributions.
“The New York grape and wine industry’s growth has been accelerating since we conducted the first study in 2005,” said 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 more than 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 IMPLAN model has 1,500 active users including the Federal Reserve Bank, the National Agricultural Statistics Service, many state and local governments, universities and private organizations.
“The economic status of major industries has a huge ripple effect 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,” said Trezise. “A rising tide lifts all boats, and that’s what our industry has been, especially in recent years.”
The relative economic importance of supporting “local” wines is also illustrated by the study. Wine wholesalers reported 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.