The wine industry not only weathered the pandemic. It even grew.
But what’s wine worth to the U.S. economy? A new study released in September by Wine America, a winery trade organization, estimates wine’s economic impact this year will be about $276 billion dollars. That includes direct impact from production and sale of wine, indirect impact of the industry’s suppliers (bottles, labels, equipment, etc.) and the “induced impact” of all those wages being spent throughout the economy.
The study, by John Dunham & Associates, is an imperfect snapshot of American wine in 2022, because there isn’t reliable data to work with. Even a basic figure such as the number of acres planted to wine grapes has to be estimated from a number of disparate sources. The U.S. Department of Agriculture stopped tracking vineyard acreage years ago because of budget cuts, and state marketing studies such as Virginia’s often rely on voluntary participation by wineries. The 10,637 “wine producers” may somewhat overstate the number of wineries, as those with multiple facilities will be counted more than once. And there’s an obvious boosterism in the study — the authors apparently had a keyboard shortcut to insert the phrase “ultimate value-added product” every few paragraphs.
Caveats aside, the study gives a fascinating glimpse of how the wine industry has weathered the storm of the pandemic. A similar study in 2017 clocked wine’s economic impact at $220 billion. Continued growth even through the pandemic “illustrates the health of the industry,” says Michael Kaiser, Wine America’s executive vice president.
Covid shutdowns dealt a blow to wine tourism in 2020 as wineries closed to visitors for several months, but retail and online sales boomed as we stockpiled wines for tough times. Wine was more flexible in this way than other service sectors such as restaurants, which were forced to pivot to takeout and delivery just to stay alive. That’s not to say there haven’t been pandemic casualties — wineries dependent on events such as weddings were hard hit. But wine’s alternate distribution channels strengthened its resiliency.
When wineries reopened to visitors, the experience changed toward “curated tasting menus” rather than crowding around a bar. And with air travel still limited by the pandemic, more of us visited the “wine country” next door, giving local wineries a boost. It’s easier and cheaper to hop in our cars and head to Mt. Airy, Md., or Leesburg or Charlottesville in Virginia, or wherever “next door” is than to book a flight to California.
The Wine America report estimates U.S. wineries will welcome about 49.2 tourist visits this year, generating nearly $16.7 billion dollars in revenue for local economies. Individual state estimates hint at the impact we have by supporting our local wineries. Virginia’s 274 wine producers will welcome 1.45 million visitors this year, who will spend about $493 million, the report says. Wineries, importers, distributors and retailers will employ about 45,000 people, paying nearly $2 billion in wages and $498 million in federal and state taxes. Wine’s overall impact in Virginia this year will be about $6.4 billion.
Maryland will see about $3.1 billion in total impact, including more than $53 million in tourist spending and $328 million in taxes, the report says. By comparison, California will see $88.1 billion in total impact, including $8.56 billion in tourist expenditures from 25.2 million visitors, the report says.
If you’re interested in working in wine, the industry directly employs just over 1 million people, with an average pay and benefits of $51,800 annually. Related sectors whose success depends on a healthy wine industry employ an additional 364,000 people nationwide. The study does not explain how to find those jobs.
When we enjoy wine with dinner, we know the price we paid for the bottle. We may be familiar with the winemaker’s story. We don’t usually think about the workers who tended the vines, picked the grapes, made the bottle, printed the label, harvested the bark from cork trees, drove the trucks from the winery to the warehouse to the store, stocked the shelves and sold us the wine. (If we did think about them, we might make different choices, a theme I’ve explored before.) That simple transaction of buying a bottle of wine doesn’t just add numbers to an economic model. Like all our purchases, it makes a difference in peoples’ lives.