Oregon Economic Impact Up 72%

Growers seek to secure equity through labeling proposals

by Peter Mitham
wine vineyard oregon industry economic impact

Portland, Ore.—Preliminary figures presented to the Oregon Wine Symposium this week indicate the industry had a $5.76 billion economic impact in 2016, a 72% increase over 2013, the year examined in the previous report published in 2015.

The data is from a new economic impact report Christian Miller of Berkeley, Calif.-based Full Glass Research has been preparing for the Oregon Wine Board. The full report will be released within the next week.

‘Tremendous increase’

The economic impact figure reflects not only the growth of the Oregon wine industry but also the overall health of the economy in Oregon.

Miller told the symposium that the multiplier factor—the figure used to extrapolate the broader impact the industry is having across the economy—was greater than in previous reports because of the more robust nature of the economy. The impact of spending, for instance, was multiplied 1.8 times in the new report, up from 1.2 times in the previous iteration.

This translated into a 72% increase in the industry’s economic impact between 2013 and 2016, almost triple the 24% increase logged between 2010 and 2013, as the industry fought its way back from the Great Recession.

“Economically, Oregon has made a tremendous increase in its impact,” Miller reported, noting that wineries rang up $529 million in sales in 2016.

Employment climbs
With respect to employment, the report used a multiplier of 1.46 for each wine industry job, up from approximately 1.1 three years earlier. Miller cautioned against taking the base figures at face value, however, saying he suspects “undercounts” in the official data on winery and vineyard jobs, and the actual number might be higher than the official statistics indicate.

In the case of vineyard workers, the base number was 1,053, but Miller believes the actual count could be 1,800. Similarly, the number of winery workers could be upwards of 7,000—more than double the 2,993 used in the report.

To protect its accumulated equity, the Oregon wine industry is undertaking several initiatives.

Salary study
To give the industry a better understanding of what constitutes a competitive salary for workers, Jeff Peterson, an associate professor affiliated with the wine studies program at Linfield College in McMinnville and director of the Linfield Center for the Northwest, is conducting a study to benchmark salaries in the industry.

Based on approximately 170 initial responses, the study has determined average base salaries for head winemakers, vineyard managers and tasting room managers of $73,633, $52,460 and $42,015, respectively.

The industry survey that’s gathering data for the study remain open. Peterson hopes more Oregon growers will participate to ensure a more accurate read on compensation practices in the industry. Peterson expects to share the study’s findings in a webinar this spring. “Our hope is to be able to do this survey every year,” he added.

Accumulated value

With the proliferation of subappellations within the Willamette Valley AVA, including the proposed Van Duzer Corridor, Tualatin Hills, Mount Pisgah and Laurelwood AVAs, veteran winemakers David Adelsheim and Ken Wright are leading efforts to protect the accumulated value in the Willamette Valley name.

Similar to what took place in Sonoma County, many wineries in the AVAs nested within the Willamette Valley have not been using the Willamette Valley designation on their labels.

“In the process of becoming so specific with these AVAs, we’ve forgotten the value of the Willamette Valley,” Wright told symposium attendees. “We’ve forsaken the Willamette Valley.”

“We were one of the worst offenders,” added Adelsheim, noting that wines bottled for the three-year-old Willamette Valley Pinot Noir auction—an initiative he helped launch—are working to correct the phenomenon with labels naming both the Willamette Valley as well as the sub-AVA of origin for each small-lot wine.

Consultations with stakeholders will continue into April regarding options for ensuring people know the sub-AVA where wines originate without forgetting that they come from the more well-known Willamette Valley.

The two primary options being considered are conjunctive labeling and requiring that any Pinot Noir or Chardonnay bearing the Willamette Valley designation be made entirely with grapes from the AVA.

“All we’re talking about is truth in labeling,’ Adelsheim said.

He hopes to have a proposal ready by the 2019 session of the Oregon legislature, with the major question at that point whether to make it simply a state rule or to entrench the requirement in state law.

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