Vineyards and wineries bring the agriculture and tourism sectors together, and that usually adds up to good news for the economies of northern Shenandoah Valley and Virginia.
According to a recent report by Economic Forensics & Analytics, based in Sonoma, California, the sum of all economic activities in Virginia directly or indirectly related to wine production, sales and grape growing was estimated to be approximately 1, Estimated $73 billion compared to 2015 when the total was $1.37 billion, an increase of 26.5%. In 2019, estimated Virginia wine-related and induced jobs totaled 10,420 and related wages exceeded $398 million.
The quadrennial report states that the Virginia wine and viticulture industry has seen significant growth in the number of wineries and demand for Virginia wine since 2015, the most recent economic impact study ahead of this year’s study. The number of bonded wineries in the Commonwealth increased from 261 in 2015 to 357 in 2019. Virginia wine production increased about 17% from 2015 to about 1.97 million gallons produced in 2019, the report said.
“The vineyards pay wages, we hire people, we buy produce, label, pay taxes, we have distribution and the tourism itself is huge,” said Loretta Briede, owner of the Briede Family Vineyards. “They’re a huge tourist attraction for the state of Virginia and I think the revenue is huge.”
An estimated 357 Virginia wineries or wine companies sold more than 604,000 nine-liter units of wine in 2019 for a retail value of more than $146.4 million and supported 2,586 jobs at Virginia wineries, the Economic Impact Report shows.
Wineries generated over $120 million in revenue from wines sold through multiple channels in 2019, and approximately 65.6% of 9 liter units (cases) were sold directly to consumers, including visitors, by Virginia wineries in 2019 who received deliveries after visiting a winery in Virginia Winery.
In addition, according to the report, in 2019, more than $17 million in grape growing revenue, more than $37 million in winery revenue, more than $8 million in distribution revenue, more than $246 million Tourism revenue and more than $17 million in wine sales generated in retail and hospitality.
The northern Shenandoah Valley is home to a number of wineries that fuel the region’s economy.
“The wine industry plays a huge role in Shenandoah County’s local economy,” said Jenna French, Shenandoah County director of tourism and economic development. “Vineyards were one of the first formal agritourism industries, with early venues like Shenandoah Vineyards paving the way for a later thriving industry for Shenandoah County and the Commonwealth.”
Shenandoah County has the most wineries in the valley, and Cave Ridge Vineyards co-owner Randy Phillips said there was good reason for that.
“I know we settled here over 20 years ago because of the unique weather patterns we were able to find as well as the unique limestone-based soil,” Phillips said.
Phillips said he recently visited a Northern Virginia winery owner, and the owner told him that “the Shenandoah Valley is the most desirable place in Virginia for wineries to get their grapes.”
After all, the grapes are the most important aspect of making great wine.
“I don’t know if it’s the cheapest way, but I think it definitely produces better wines. You are in control of everything. Once the grapes are in the ground, you’re there every day,” said Briede. “Ultimately you are trying to make an amazing wine. When it goes to your winemaker, hopefully you have the perfect grape for them.”
So it makes sense that being able to produce your own grapes, as both Briede and Phillips do, would be economically helpful.
According to Phillips, a few years ago the average price was about $20,000 per acre to provide the infrastructure for growing grapes. This includes the cost of the vine, the cost of preparing the soil, trellis material, and irrigation systems.
“I’m sure costs have gone up and the variety of grape you plant matters. Some require more or less maintenance,” Phillips said. “But it’s worth it for the investment. Our oldest vines are 20 years old. So once you invest in the infrastructure, you won’t need to replace it for many years. If you estimate that one hectare of grapes would produce four tons of grapes – and let’s take Cabernet Sauvignon as an example – those grapes are valued at $2,800 to $3,000 per ton.”
With viticulture and winemaking comes responsibility.
Jobs related to vineyards and wineries come in many forms, including many in viticulture, winery operations, distribution, tourism, retail and restaurant to name a few.
“It takes a lot of people. There is a lot of work behind it,” said Briede. “When we planted we had about 15 of our friends and then some came out and helped us plant. Then you employ espalier companies, vineyard maintenance crews, landscapers and tasting room staff. There is also a whole team of lawyers and accountants, and staff in bottling and labeling. There’s a lot in there. A vineyard is quite needy and there are many moving parts.”
These jobs help create a healthy economy.
In addition, the wine industry generates significant tax dollars that benefit federal, state, and local governments.
The Economic Impact Report estimates that $192,200,700 in taxes were paid by the Virginia wine industry in 2019 — $80,278,200 at the federal level and $111,922,500 at the federal level. That’s about $9 million more than in 2015.
“The benefits of wineries to the community’s economy and region are far-reaching and integral,” said Patrick Barker, executive director of the Frederick County Economic Development Authority. “From jobs to sales, the direct and indirect impact of wineries grows every year.”
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