New report shows staggering influence of wine industry in Napa

Annual economic impact on county estimated at $13.3 billion
2012-11-29T18:41:00Z 2012-12-05T18:06:14Z New report shows staggering influence of wine industry in NapaPETER JENSEN Napa Valley Register
November 29, 2012 6:41 pm  • 

What recession?

That may be the reaction from some observers of the Napa Valley wine industry upon reading a new report revealing wine production in Napa County has an economic impact of more than $13 billion annually. That’s $2 billion more than a similar study determined in pre-recession 2008.

The report, issued Thursday by the Napa Valley Vintners, states that in a county of 136,000 people, the wine industry generated two-thirds of local total employment, or 46,000 full-time-equivalent jobs. This includes workers either directly or indirectly tied to Napa Valley grapes — in wineries, vineyards, suppliers, professional services, or in tourism, which includes restaurants.

Looking farther afield, the report said the county’s wine industry generated 101,000 total full-time-equivalent jobs in California, and 303,000 jobs nationwide.

Heralded as the most comprehensive study of the wine industry’s economic contributions, the report determined that in 2011 Napa County wineries accounted for approximately 20 percent of California’s wine production, or one out of every five bottles, and between 16 and 17.5 percent of the U.S. wine production.

That equates to an economic impact of $26 billion in California, and $50 billion in the U.S., according to the report.

A key finding in the report shows that Napa County’s wine production accounted for 31 percent of the value of U.S. wine sales in 2011, which means that almost one out of every three dollars spent on wine can be traced back to Napa County.

The report also showed that Napa Valley appellation wine was only 3 percent of U.S. wine production. But because of its high value, was 17 percent of the value of U.S. wine sales.

In California, the retail value of Napa County’s wine production was a little more than half of the value of all wine sales in the state last year, according to the report. Napa Valley appellation wines represented 27 percent of that total.

Produced by St. Helena-based Stonebridge Research Group, the new study is an updated and more extensive version of a previous one completed in 2008. That report determined the wine industry’s economic impact to be $11 billion in Napa County, and more than $42 billion nationally.

“This is the most comprehensive examination of our wine industry’s economic impact to date, giving us a more detailed look from a multitude of resources, from one-on-one interviews with wine and wine-related businesses to local, state and federal reporting agencies,” Napa Valley Vintners Executive Director Linda Reiff said in a news release. “The Napa wine industry is healthy and thriving, fueling our local and national economies even in these uncertain times.”

The new study has estimates of all of Napa County’s wine production, which includes a broader source of grapes, rather than just Napa Valley appellation wines, which have to feature 75 percent Napa Valley grapes, said Terry Hall, communications director for the Vintners.

Getting the broader figures required cooperation from some of the Napa Valley’s major producers to share information with Stonebridge founder Barbara Insel, Hall said.

“They kept a lot of that really close to their chest,” Hall said.

The study also took into better account the wine industry’s suppliers and service providers, which widened the economic impact.

“It wasn’t capturing the whole snapshot,” Hall said of the earlier study. “(The new study) shows more impact because it includes more product.”

The new figures also show the wine industry’s resilience in facing the brunt of a deep recession that hit California and the U.S. economies hard.

“Think about the time frame,” Hall said. “The impact is more during a recessionary time. That’s pretty encouraging.”

Hall also highlighted a finding from the study showing that the wine industry was responsible for $84 million in charitable giving every year. It also generated almost $1.3 billion annually in local, state and federal taxes.

Hall said the report confirms the importance of agriculture in Napa County.

“I think the good news is that it reinforces the value of agriculture in the community,” Hall said.

But Hall said it also should serve as a reminder that despite its successes, the county’s wine industry should not be lulled into complacency in competing against other wine regions in California, the U.S., and the world. Wineries and vineyards will have to keep striving to produce the best wines to justify their high values, and agriculture will have to be protected, he said.

“You have to work on continuing that,” Hall said. “All that really keys into keeping your place at the table — in that top tier.”

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(9) Comments

  1. vocal-de-local
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    vocal-de-local - November 30, 2012 1:43 am
    Ok so the wine industry has done very well. They have made lots of money and have stimulated our economy. All good. However, isn't there a point where they can be content to not grow any bigger? Just because you can grow bigger doesn't mean you should.
  2. glenroy
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    glenroy - November 30, 2012 10:59 am
    Staggering in so many ways….from great grape juice to nasty vehicle accidents…
    Being so dependent on a product with increasing competition world wide is 'the' receipt for a big fall down the road…
  3. brownsvalleygirl
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    brownsvalleygirl - November 30, 2012 11:54 am
    VDL: I did not see anything in the report that indicated massive growth in the Napa Valley wine industry. I did see that additional/new data led to a more comprehensive report.

    GR: Sorry that you wake up on the wrong side of the bed each morning. That cannot be comfortable and may be what contributes to your pessimistic nature. Yeah the Napa Valley wine industry is just awful! The clean, green industry that provides jobs for so many here in our community, gives back millions to our local non-profits, secures open space and scenic beauty for all of us and is so attractive that millions of people come from all over the world each year to see it for themselves. I'm with you! Bring me pollution spewing factories!
  4. NVV
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    NVV - November 30, 2012 12:07 pm
    We agree that this is good news for the Napa Valley! As far as the growth figures in the report, one important thing to note is that when the report was last done in 2008 it only looked at wine labeled as being from the Napa Valley. The latest report included ALL wine produced in Napa Valley. The growth in numbers is largely due to that change in measurement.

    The wine industry as a whole is one that keeps us clean, green, beautiful and most of all, employed (as the article notes, 2/3 of the jobs in Napa County are generated by the wine industry). We are all lucky to have an industry that is so invested in the success of the local community – both via jobs and charitable giving – and to preserving the land and people that make the Napa Valley a great place to work and live.
  5. vocal-de-local
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    vocal-de-local - November 30, 2012 12:44 pm
    What worries me is how low we're willing to stoop to keep up with the competition.
  6. vocal-de-local
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    vocal-de-local - December 01, 2012 11:18 am
    I Agree.
  7. reason-ator
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    reason-ator - December 01, 2012 11:20 am
    The impartiality we get here in the Napa Valley is staggering.

    The Napa Valley Vintners are telling us how wonderful their industry is here.

    Earth-shattering news. Even better comedy.

    What a joke.
  8. napa1957
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    napa1957 - December 01, 2012 1:44 pm
    Nearly every winery related job I see advertised is warehouse/pickers/production at $10-$15 hr.
    Not exactly earth shattering employment, for a living wage if one lives in Napa.
  9. reason-ator
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    reason-ator - December 02, 2012 12:18 am
    A year or two ago, I followed a vineyard management truck out of Calistoga and over to Larkfield. I was on my motorcycle, and almost crashed when a smelly liquid started pouring out of the back of the pickup's tailgate, and when I got to the restaurant I was going to, I had a headache and was throwing up. I tried to tell the driver he was spilling what was probably a toxic liquid on the road, and he closed the window and adjusted the radio controls to fix the problem.

    I later followed a semi-truck pulling a tanker that eventuially pulled into a winery, but not before the wheels had torn up a big chunk of asphalt and tossed it back to bounce off of my brand-new motorcycle, but my bigger problem was the obnoxious diesel fumes bellowing from the exhaust.

    It wasn't as bad as the burning brush piles, though.

    $uch a green indu$try. $pare me the fairy tales. Just make your money and try to live up to your stories. Until then, it sounds like we have our pollution-spewing industry already.
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