Wine’s economic impact on California $57B, nation $114B
The business of growing grapes and making wine in California contributed $57.6 billion to the state economy and $114.1 billion to the national economy last year, a new report said.
California wineries, winegrape growers and businesses serving the industry annually contribute $57.6 billion to the state’s economy and $114.1 billion to the U.S. economy, according to a new report commissioned by San Francisco-based Wine Institute and Sacramento-based California Association of Winegrape Growers, or CAWG. The state’s wine business also directly and indirectly generates 325,000 jobs in California and 786,000 across the nation.
By comparison, wine business activity in two key regions in the state, Napa and Sonoma counties, lifted those economies by a combined $26.7 billion, according to 2012 and 2014 reports.
Economic activity related to the industry statewide grew 17 percent from $49.2 billion when the last California report was done seven years ago and 19 percent from $96.0 billion nationwide. The report authors said this strong growth started with the Great Recession and continued with the slow recovery points to the strength and resiliency of the nation’s No. 1 wine-producing state as a positive economic force across the nation.
“California wine is an economic engine for our nation,” said Robert “Bobby” Koch, Wine Institute president and CEO. “Our predominantly small, family-owned businesses create jobs, pay significant taxes and give back generously to charities and communities. These are significant accomplishments when the strong dollar and pressure from imports make the U.S. the most competitive wine market in the world, and we continue to face the threat of increased taxes and regulation at every level of government.”
Vineyards and wineries are “iconic,” “integral” elements for a “vibrant” state economy, said John Aguirre, president of CAWG.
“The scenic views and tasting rooms found in wine country attracted nearly 24 million tourist visits in 2015, and the commitment of California growers and vintners to sustainable practices forms a foundation that supports 325,000 jobs while also promoting important social and environmental benefits,” Aguirre said.
But an increasing threat to the industry in the North Coast is the perception among some that there are too many wineries, vineyards and rural wine-related events. That sentiment has led to hearings on public-policy changes in the past few years. Napa County enacted some changes early this year, and Sonoma County is set to consider its own this fall.
The report, “The Economic Impact of California Wine and Grapes 2015” by John Dunham & Associates of New York, was presented Aug. 4 at a Joint Informational Hearing of the California Assembly Committee on Agriculture and Assembly Select Committee on Wine held at University of California, Davis. John Dunham & Associates used new methodology for the 2015 report and has also adjusted the 2008 economic impact numbers so that the comparison in growth would be comparable.
It estimates the full economic impact of the wine and grape industries based on figures for employment, wages, taxes, tourism spending and visits, and charitable giving. It uses a standard and widely used methodology for representing direct, indirect and induced economic activity. 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 National Agricultural Statistics Service, Economic Research Service and Federal Reserve Bank.
The model also has been used for analysis by Sonoma State University’s Center for Regional Economics.