New study shows Washington wine industry worth $8.6 billion

April 24, 2012 

— Washington's burgeoning wine industry just keeps getting stronger -- especially in Benton County.

An economic impact study released Tuesday by the Washington Wine Commission shows the state's wine industry is worth $8.6 billion a year, up $3 billion from a similar study in 2006.

And nationwide, the state wine industry accounts for nearly $15 billion, up from $4.7 billion six years ago.

In Benton County, the wine industry annually contributes about $1 billion to the economy.

The new study used information from 2010-2011.

"It's amazing," said Steve Warner, the wine commission's new executive director. "It's absolutely a positive indicator of the viability of the future of Washington wine."

Warner, who has been on the job just over a month and only last week moved his family to Seattle from Romania where he worked for Merck & Co., said the success of Washington wine will be one of his main messages to the industry and wine lovers.

"It's an awesome way to start the job," Warner said.

In the state, the wine industry accounts for 27,000 jobs, according to the study prepared by Stonebridge Research of St. Helena, Calif. Those jobs bring in $1.2 billion in wages annually.

That's up from 19,000 jobs in 2006 and 11,000 jobs in 1999. And nearly 5,200 of those jobs are in Benton County.

The wine industry generates $238 million in state taxes annually, and that number grows to $1.4 billion at a federal level, according to the study.

In Benton County, nearly $43 million in state and local taxes are generated annually.

The president of the state's largest wine producer loved the numbers but said they are only the beginning.

"I'd suspected we'd grown quite a bit," said Ted Baseler, CEO of Ste. Michelle Wine Estates. "But this is remarkable."

Baseler warned, however, that the rate of per capita wine consumption in the United States is increasing at a rate that will put the American wine industry in short supply of grapes in just five years.

"As an industry, we need more vineyards," he said. "That's probably job one. I have no doubt we're going to see this state expand its vineyard holdings."

Washington currently has more than 43,000 acres of vines, and Baseler said another 10,000 acres "would be a nice start. If there are not substantial amounts of vines planted in California, Oregon and Washington in the next five years, there will be a shortage of premium grapes."

And if the demand for wine is not met by U.S. wineries, he warned, it will be filled internationally.

Baseler said the second-biggest need in Washington is tourism infrastructure. According to the study, Washington wineries enjoy 2.4 million visits a year, accounting for $1.1 billion in spending.

"Wine tourism is a vital part of our tourism portfolio," said Kris Watkins, CEO of the Tri-Cities Visitor & Convention Bureau in Kennewick. "It really does set us apart from other regions."

She estimates that more than 110,000 people come to the Tri-Cities each year for conventions and sports tournaments, and attracting events to the region depend on extracurricular activities, such as wineries and golf courses.

"Tourism is a lot about perception," she said. "Being in the heart of Washington wine country helps us secure conventions."

King County, home to Chateau Ste. Michelle, benefits the most from the wine industry, according to the study, contributing nearly $3 billion in total economic impact.

Benton County is No. 2 in economic impact, where more than 40 percent of the state's wine is made. Columbia Crest and Chateau Ste. Michelle's red winemaking facility are near the town of Paterson, Pacific Rim Winemakers is in West Richland, and Hogue Cellars is in Prosser.

Large family producers such as Barnard Griffin in Richland and Hedges Cellars and Kiona Vineyards Winery on Red Mountain also help generate nearly $1 billion a year in the county.

Washington State University's Irrigated Agriculture Research & Extension Center north of Prosser is where much of the state's wine grape research has taken place since Prohibition was repealed in 1933.

In addition, the proposed Wine Science Center will be built on the campus of WSU Tri-Cities in Richland. The state Legislature recently allocated $5 million toward its construction, which is on top of about $10 million already raised through industry and private donations.

The cost of the Wine Science Center will be $23 million, and construction is expected to begin next year.

Yakima County was third on the list with an economic impact of $526 million, and Walla Walla County was fourth with just over $500 million.

Washington is the second-largest wine-producing state in the country. California, which is No. 1, has an economic impact of $61.5 billion to the state and $121.8 billion nationwide, according to a 2011 study.

Oregon, the nation's No. 4 wine producer, has an economic impact of $2.7 billion, according to a 2010 study.

Other items of note from the study include:

-- Wineries contribute $5.5 million to charities each year.

-- Nearly 30,000 people are employed directly and indirectly by the wine industry, accounting for nearly 1 percent of total employment in the state.

-- As of 2010, Washington had 35,000 acres of vineyards that were of fruit-bearing age and 43,849 total acres of wine grapes.

-- Walla Walla County has the most wineries, with 123. King County is No. 2, with 117, thanks primarily to Woodinville.

-- In Benton County, more than 11 million gallons of wine are produced, accounting for 41.6 percent of the state's total. Grant County is No. 2 with more than 6 million gallons.

-- And 33 of Washington's 39 counties have at least one winery. Those without include Columbia, Ferry, Garfield, Pacific, Pend Oreille and Wahkiakum counties.

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