Minnesota wine industry continues to grow

University of Minnesota Extension

It’s a distinctive addition to Minnesota commerce, one that contributed $59 million to the state’s economy in 2011 alone. The amount of grapes Minnesota grows is increasing, especially since 2006’s introduction of the Marquette red variety to the landscape.  But the state’s wine industry is no longer a novelty. It will begin facing the same sustainability challenges that occur when any product matures.

Those are among the key conclusions in a 46-page report issued by researchers Brigid Tuck, economic impact analyst at University of Minnesota Extension, and William Gartner, professor of applied economics at the University. The study is the most exhaustive look at Minnesota’s wine industry since its inception.

“Minnesota’s wine industry is showing signs of becoming more sophisticated. Vineyard and winery owners continue to understand their markets more and more,” Tuck said, noting the wine industry in Minnesota is almost entirely a rural enterprise. “To enjoy the growth they’ve had so far, they’ll need to continue to evolve their practices and marketability.”

The wine industry is a dynamic force in Minnesota – and one that barely existed before the advent of cold-hardy grapes. Beginning in the late 1990s, varieties such as the Frontenac, La Crescent and Marquette were introduced after years of cultivation and research at the University of Minnesota. Today, the University’s viticulture program is considered a national leader in wine grape research.

Owners of 101 vineyards and 34 wineries in Minnesota responded to Tuck and Gartner’s survey. They reported that nearly half the grapes growing in Minnesota were planted after 2007; most of the new grapes are Marquette.

Grape plants require three to four years to mature before they’re ready for market.  Among grape growers, half indicated they plan to increase their vineyard’s acreage, either slightly (33 percent) or substantially (17 percent).

On the production and sales side, almost 63 percent of Minnesota wine is purchased at wineries and their tasting rooms. Event-savvy marketing is crucial; nearly all responding wineries reported hosting live music, weddings, grape stomps and charity fund-raisers. Liquor store sales accounted for only 15.7 percent of sales.

“This is very much a customer-comes-to-us scenario. To grow, they’ll need to look at other ways to make those sales,” said Tuck. “We found that they may benefit by greater collaboration in agri-tourism endeavors like wine trails, which connect vineyards and wineries through various points in rural Minnesota.”

Economic activity in the wine industry for 2011 was $16 million generated by vineyards, $22.1 million by wineries and $20.5 million by wine tourists.  Other Extension findings included:

* Minnesota wineries sold 540,000 bottles of 2011, with half pricing their wine at $11 to $15 per bottle. Sixty-eight percent of wineries operate a tasting room.

* Vineyard owners are becoming more sophisticated at sales, with increasing use of contracts instead of informal agreements.

* Vineyard operators’ greatest concerns include pests, insects and disease.

In 2011, 3,250 part- and full-time jobs were associated with vineyards and wineries. The industry continues to rely heavily on volunteer and family labor for work such as grape-picking. This may be difficult to sustain over the long term.

“This Minnesota-wines-from-Minnesota-grapes industry didn’t exist until relatively recently. And now it’s generating jobs and millions of dollars in economic impact,” said Matt Kane, community economics program leader at Extension. “That happened because of agricultural innovation at the University and our ability to share research results with the state.”

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