National Impact of the Wine Industry: $219.9 Billion

WineAmerica releases report detailing wine's benefit the American economy

by Linda Jones McKee
Wine America United States economic impact
The U.S. wine industry contributes more than 1.7 million direct, indirect and induced full-times jobs. Source: WineAmerica
Washington, D.C.—The total economic impact of the U.S. wine industry is $219.9 billion, according to a study released this morning by WineAmerica, the National Association of American Wineries. U.S. Rep. Mike Thompson of California, co-chairman of the Congressional Wine Caucus, announced the total, which includes all 50 states and the District of Columbia, at a press conference held in Washington, D.C.

Wine America United States economic impact
A new report commissioned by WineAmerica calculates the total economic impact of the U.S. wine industry at $219.9 billion.
Jim Trezise, president of WineAmerica, told Wines & Vines: “This is the first-ever detailed national economic impact study. It’s huge in terms of impact for WineAmerica and in states across the country. It’s going to have impact in national and state capitals, as it gives state-by-state information on jobs, wages, taxes, tourism.”

It is no surprise that the grape and wine industry in California has the largest economic impact of any one state, with a total of $71.2 billion. According to the report, California has 560,000 acres of vineyard and 4,581 wine producers, and the industry supports 485,056 jobs and generates $10.8 billion in taxes. The wine industry in the state attracts 23.6 million tourist visits, and those tourists spend $9.7 billion.

What is more interesting is that the top five states with the greatest economic impact are not the ones often cited because of the number of wineries in the state, the number of acres and/or the largest amount of wine produced. In this study, the top five states are California, followed by New York, Texas, Florida, and Washington.

WineAmerica’s Economic Impact Report is different from many of the reports compiled over the years by individual states. It is a comprehensive report that evaluates economic impact at three levels: direct, indirect and induced. State reports tend to focus on direct and indirect impacts and often don’t include the induced, or multiplier, effects that are part of the WineAmerica report.

John Dunham & Associates, the Brooklyn, N.Y.-based economic research firm that wrote the report, included information defining the three levels of economic impact. They state that direct impacts are the jobs, wages and economic output attributed to the industry, including wine grape growers, wineries, wholesalers, retailers, trade associations, research and educational organizations, and wine-related tourism.

Indirect (or supplier) effects result from firms in the wine industry purchasing goods and services from other industries. These suppliers produce the machinery, tools, parts, processing materials and other materials used in vineyards to grow grapes and in wineries to produce wine, as well as to distribute and sell wine in the United States. This category also includes different types of services: agricultural, personnel, financial, advertising, consulting and transportation services, as well as people who are responsible for governmental regulation of the wine industry.

Wine America United States economic impact
Source: WineAmerica
The report defines induced impacts, also known as the multiplier effect, as the responses “by the economy that occur through re-spending of income received by payments made to employees and business owners measured in the direct and supplier parts of the economy.” That impact includes the spending by employees of the industry and that of indirect firms whose jobs are dependent on the wine industry.

Wine America United States economic impact
Source: WineAmerica
According to the “Methodology and Documentation” section of the WineAmerica report, after the direct impact of the wine industry was calculated, John Dunham & Associates utilized an input/output model based on information from the Bureau of Economic Analysis in the U.S. Department of Commerce to quantify the economic impact of the wine industry on the economy of the United States, as well as that of individual states. The report states: “This induced impact is the most controversial part of economic impact studies and is often quite inflated. In the case of the WineAmerica model, only the most conservative estimate of the induced impact has been used.”

Wine America United States economic impact
Source: WineAmerica
Wine America United States economic impact
Source: WineAmerica
New York, Texas and Florida don’t have as many wine producers or vineyard acres as Washington, which has 837 wine producers, according to the report and 56,882 vineyard acres. However, when direct, indirect and induced economic impacts are factored in, all three states have a larger number of wine-related jobs—with more wages paid and more taxes generated—than Washington state.

Wine America United States economic impact
Source: WineAmerica
In addition, because of the multiplier effect of the induced economic impacts, the states with large cities or bigger populations benefit more. For example, the District of Columbia (which has one wine producer, according to the report, and no vineyard acres) ranks higher in total economic impact than 14 states, all of which have wine producers and 13 of which have vineyards.

By the numbers
Nationally, the Economic Impact Report shows that:

• There are 10,236 wine producers in all 50 states;

• A total of 677,629 acres are planted with grapes in 49 states (Alaska has nine wine producers, but no vineyard acreage);

• There are 1,738,270 American jobs in the wine industry;

• Those jobs pay annual wages exceeding $75.7 billion;

• Nearly 43 million tourist visits to wineries support thousands of jobs;

• Additional tourist expenditures contribute more than $17.6 billion to local communities;

• The wine industry generates more than $19 billion in taxes to the federal government and another $17.4 billion to states and local communities;

• California accounts for about 85% of the country’s total output of grapes and wine, but the wine industry is growing in many regions across the country.

Trezise told Wines & Vines that one of the smartest things he did when he was executive director of the New York Wine & Grape Foundation was to compile economic impact reports for the state on a regular basis. He thinks WineAmerica’s Economic Impact Report will be important for states across the country, because it contains more than just an infographic for each state that supplies the basic economic statistics. The report also includes for every state a report describing that state’s wine industry and a page of tables giving detailed data about the direct, indirect and induced economic impacts of the wine industry within that state.

WineAmerica’s Economic Impact Report is available on their website, wineamerica.org.

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