Wednesday, October 3, 2007

Michigan wine -- local focus sustains industry

(cross-posted at Michigan Messenger)
The world is awash in wine, but that's not hurting Michigan's wineries.

Focusing on local identity, marketing, and agritourism, Michigan’s wine industry continues to grow during the current global wine glut. The Michigan Department of Agriculture recently reported that wine grape acreage in Michigan increased 12 percent from 2003 to 2006.

The majority of Michigan-made wine is sold in winery tasting rooms and by local retailers. Michigan wine makers see plenty of growing room in the Michigan market due to increased consumer sophistication and the movement to support local agriculture.

“Michigan wineries are not marketing on a global basis and that’s a good thing, because there is a global oversupply of wine,” said Linda Jones, executive director of the Michigan Grape and Wine Industry Council.

Michigan's more than 50 commercial wineries produce about 375,000 cases of wine annually. Though a small drop of U.S. domestic production – which in 2006 topped 209.4 million cases – it is a profitable and growing bucketful for Michigan wineries.

Jones says that Michigan consumers are learning about wine and consequently purchasing more local wines, even to the extent that producers cannot keep up with demand for specific wines. “There is tremendous demand for Lake Michigan shore cabernet sauvignon; we cannot produce enough of it to satisfy the needs of our Michigan industry.”

St. Julian Winery, Michigan’s oldest and largest winery, has five tasting rooms that account for about half their business. St. Julian is expanding its tourism market with a new tasting room across from Cabela’s, an outdoor outfitter in Dundee, which claims to be Michigan’s top tourist destination based on number of visitors.

Paw Paw based St. Julian distributes in 14 states, but David Miller, vice president of wine production,also appreciates the strength and influence of the buy local movement. He says that in addition to unique character and taste, local products are better for the environment.“We have a very small carbon impact when you look at the amount of energy it takes to get wine from here to Grand Rapids or Detroit, compared to a California wine or Australian wine or South African wine.” He added, “It’s good for us. It’s good for the local economy and it’s good for the planet. What more could you ask for?”

Even Walmart in Kalamazoo is tapping into the buy local buzz with a set of billboards featuring local producers, including St. Julian Winery. Located on route 131, the sign reads “Buy Local, Live Well” with a picture of Miller and a plug for St. Julian “grown in Paw Paw” and available at “your local Walmart.”

According to the Michigan Department of Agriculture, more than 800,000 tourists visited Michigan’s 50 wineries in 2005 for a direct economic effect of $8.6 million. The Old Mission Penninsula is home to Chateau Chantal, a winery/chateau founded in 1993, that combines wine production and destination tourism. “Grapes tend to like some of the same pieces of land that people like: high ground with nice views. Overlooking the water is even better. Grapes like that,” said Jim Krupka, president and CEO of Chateau Chantal.

Krupka stresses the relationship of his business to sustaining agricultural land use in northern Michigan. “By growing our business, we are finding ways to make more and more farms economically viable.”

Krupka and Miller expect industry growth to continue apace. Krupka’s winery is growing 10 percent year to year. Since 1997, St. Julian’s production has grown from 45,000 cases annually to 120,000 cases. Jones says that Michigan wines account for only 5% of the wine consumed in Michigan.

“We are at a tipping point of sorts. The quality of our wines continues to improve and we are seeing increased sales, more foot traffic and more pull through the retailers,” said Miller. His company will continue pursuing retail sales throughout Michigan and other states.

“There is passion for Michigan in what we are doing -- passion for land preservation, for the industry and for our products,” said Krupka.

Jones stresses that wine production is a complex business with high start-up costs ($15,000 per acre to put land in production), a maze of state and federal regulations, and a development period of about ten years before products are stable and reliable. She says in spite of those hurdles, new growers enter the business every year. “The people that got into the business in the 1980s are now reinvesting in more land under development. Their success is signaling to other new comers to enter the business. There’s plenty of demand.”