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Iowa wines: A $240 million impact

By Staff | May 16, 2016

MIKE WHITE, right, viticulturalist at Iowa State University, visits with Laurie Taylor, regional foods coordinator for Woodbury County Extension. They are discussing northwest Iowa vineyards and Iowa wineries during White’s April 29 visit to Sioux City to assist with possible start-ups.

By JOLENE STEVENS

grovecorner@aol.com

SIOUX CITY – The world’s age-old wine industry, dating back 7,000 years, finds the United States thrusting itself into the lead as the No. 1 wine-consuming country in the world.

That’s more than Italy and France with a dozen companies currently dominating the world’s wine market, according Mike White, viticulturist at Iowa State University.

“Looking at this data I ask the question doesn’t it make sense that if people are going to enjoy drinking wine we produce Iowa wines for them, rather than they order their preferences on line to be shipped from out of state?” White asked.

He said Iowans are hearing the call to plant vineyards and start wineries.

“Iowa had but 13 wineries in production and five partial vineyards in 2000,” White said, “compared to today’s current 105 wineries and 312 vineyards on 1,250 acres.

“These businesses now have a $420 million impact on Iowa.”

What he refers to as a significant industry growth has in later years is a corresponding growth in wine production throughout the upper Midwest – Wisconsin and Minnesota.

White said the growth is the advent of a cool climate and the subsequent development through cross-breeding of disease-resistant cold-climate grapes by several Midwestern universities.

The University of Minnesota, Cornell and North Dakota State University are among these.

The Concord grape, a long-time Iowa table grape crossed with French grapes is among those favored for Iowa wine production. “Data shows 75 to 80 percent of today’s wine drinkers have a pallet for a sweeter tasting wine such as that made with these cross-bred Concords the No. 1 grape in the Midwest.

ISU’s vineyard and winery started in 2006 helps the growing popularity of the college’s viticulture course crossing over into chemistry, food science, fermentation innovation

ISU also performs testing and chemical analysis for existing Iowa wineries.

Straight talk

During his Sioux City workshop White underlined what he sees a frequent misconception by those feeling wanting to develop a vineyard.

“It’s not a ‘just stick your toe in the water’ kind of industry to get started in,” he said. “It’s the rule of thumb in fact that you don’t get in the business to have a bad time, but to have a good time.

“A toe in the water beginner will find himself or herself having a bad time without a sound knowledge of the industry and good management,” White said.

He describes the grape and wine industries as social industries often composed, in the case of potentially new winery owners, of 50-plus individuals in lucrative job positions who have money set aside for start-up of their businesses and perhaps phasing into retirement and enjoying traveling to visit other wineries across the United States.

“Those looking to start a vineyard needed to know how to manage it well. They’re going to spend upwards to $8,000 to $10,000 per acre by the third year in the business when the vineyard is ready for production,” White said. “Production considerations include those for a well-drained soil, avoiding river bottoms, weather and water management and labor.

“You don’t go to the USDA office for any subsidy. There aren’t any subsidies for grapes, and we don’t want them.”

He said, however, the good news is “With good management you can net $1,000 or more per acre with grapes. You know the old adage that the hogs pay off the mortgage?

“In the case of grapes, the money return is in the wine. For every dollar spent on grapes that’s $10 worth of wine, and it doesn’t take long to get the business going with good management.”

He said wineries are, however, a different story in that based on the average he said $250,000 is realistically a minimum start-up cost with a good share of the new operators going to the bank within a year wanting to expand.

“It’s quite possible that a small but nice winery costing $1 million can have an across-the-board return of 8 to 15 percent,” White said. “When we think about the wine industry we have to realize it’s not only about the wine, but that it has become a leisure and tourism industry taking on discretionary dollars from sales for weddings and events, catering and restaurants.

“Every bottle of wine sold has a $28 impact on the business. This is why good wine from good grapes is all important.

“Good management of good grapes to make good wines with an enjoyable taste is everything, and what we can learn through our Extension workshops can help make this possible for those starting out in some phase of the wine industry.”

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