Economic Impact of Washington Wine Industry

Washington wines are well-known for their quality. Now a recent study confirms the industry is also a growing powerhouse for the state’s economy.

Commissioned by the Washington State Wine Commission and conducted by Stonebridge Research, the study shows Washington wine contributes $8.6 billion annually to the state economy and supports nearly 30,000 jobs.

The study analyzed wine related data by county. The Yakima Valley American Viticulture Area (AVA) and sub AVAs like Red Mountain and Rattlesnake Hills are located in two counties (Yakima and Benton). These two counties combined have 42,193 acres of wine grapes and produce 51% of the wine in Washington. They also account for $1.45 billion in direct and indirect economic impact from the wine and related industries while supporting 8,341 jobs.

According to the report, the Washington wine industry produced 11.2 million cases of wine in 2010 and generated more than $237 million in annual tax revenues in Washington.  In addition, direct winery revenue topped $1 billion in 2010 and generated wages of nearly $1.2 billion within the state.

The study had a number of things of interest. At the time of the report there was 739 licensed wineries. Readers should be cautioned that a license does not necessarily mean they have a tasting room. Some of those wineries are not actively in production, others hold multiple licenses while some are producers who focus on wholesale to retail outlets.

As for tourism, wine is crucial to our industry, in particular here in Eastern Washington, ‘where the grapes are grown.’ The report estimates that there are 2.4 million visitors to Washington wineries, resulting in $1.05 billion in wine related tourism expenditures.

I did take exception to one broad comment that the researchers made:  “Many of Washington’s wine regions do not track visitor numbers and, unfortunately, like many U.S. wine producing regions, do not develop the targeted visitor promotion strategies which such information permits.”  It is difficult to count visitors, but tracking their numbers alone does not lead to targeted promotional strategies: gathering good data on your visitor does. Maybe the researchers meant ‘track’  in the sense of gathering data and research on wine visitors.  Here in the Yakima Valley, our organization, the Yakima Valley Visitors & Convention Bureau, conducted studies of our visitors in 2010 (the majority of which were at wine events and wineries). This data, along with other research and industry data, has helped us to craft very effective and targeted wine tourism marketing efforts.

Some interesting facts from the Washington Wine Commission report:

• While the five largest producers represent more than 70% of wine production, the next 30 wineries account for about 20% to 25% of production, with several hundred very small producers delivering about 5% of the state’s total production.
• Except for the largest producers, the majority of the wine produced in Washington is
  sold in the Pacific Northwest, with 35% or more sold within the state.
• Not only are visitors to wineries and vineyards important sources of wine sales themselves but,
  perhaps most importantly, research has repeatedly found that such visits have major, sustaining
  impacts on both visiting consumers and trade. These visitors become the winery’s “brand
  ambassadors,” passionate advocates for their “discoveries.”
• The wine consumer “demographic” is a very attractive consumer segment: affluent, well-educated and adventurous.

The bottom line is Washington wine has come a long way, is a powerhouse for our state’s economy and holds great potential for the future.

Here’s a link to the full report:

John Cooper