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    NC Wineries Stand Tall
    The Vault

    NC Wineries Stand Tall

    September 2015

    Beer may be getting all the attention in North Carolina, but don’t count wine out just yet. The state’s 160+ wineries bring in big dollars -- more than beer, in fact -- and are an integral part of North Carolina tourism.   When it comes to viticulture, North Carolina stands strong.

    Thank the climate (and a struggling tobacco industry).

    Grapes grow well in North Carolina for the same reason tobacco does: the climate is relatively mild, diverse, and suitable for the long growing season. But over the past few decades, as anti-smoking campaigns have sharply cut the number of tobacco smokers, tobacco farming has declined in NC.  Production has fallen to 248,000 pounds annually, generating $416,640 each year. Wine, on the other hand, now generates $1.28 billion, with a state and local tax tax base of over $51 million.  It is easy to see why grapes are the preferred crop.  Many shut-down tobacco plants are getting new lives as vineyards.

    There are six wine regions in the state: the mountain region, the Yadkin Valley, the Piedmont region, the Sand Hill or Coastal region, the Haw River Valley, and the Swan Creek region.  Three of those (Swan Creek, Yadkin Valley and Haw River) are all federally recognized American Viticultural Areas (AVAs). The Haw River Valley has 214 frost-free growing days as well as deep, well-drained soil. This combination provides wine grape growers an ideal growing opportunity.

    Wine trumps beer.  But...

    North Carolina ranks 10th in the U.S. wine production and third in wine tourism.  More than 400 individually owned grape vineyards are spread across the state, covering 1,800 acres.  According to a recent study, the annual economic impact of the NC wine and grape industry is $1.28 billion (compared to $791 million for beer).  Over 7,600 people are employed in some area of the wine industry.

    Wine and tourism go hand-in-hand.  People visit wineries when they want mountain or country getaways, and vineyard owners take the opportunity to promote their wines through personal interactions at tasting rooms inside the wineries themselves.  The Biltmore Estate Winery in Asheville is the best (and grandest) example of this.  It receives more than 1 million visitors annually and is the most visited winery in the United States.  People like wine and they the personal sales feeling that goes with it.  Wineries of all sizes rely on such connection-making opportunities.

    So if it’s more profitable, what is holding wine back from the fervent growth we see happening with beer?  It’s a number of factors, really.  For one, wineries need massive production facilities in remote locations, and then require that customers make more involved plans to come visit them.  That’s very different from breweries, operating in more urban centers, that can rely on casual foot traffic to generate sales.  Additionally, the start-up costs for wineries are more expensive, and it takes a very long time to start turning a profit.  Making beer involves mixing a few ingredients, and then waiting for a short production time (and thus quick sales time).  Making wine requires soil preparation, seed planting, waiting out a long growing season, hoping for good weather, pressing grapes, aging, and so on.  It’s just a longer process, and it’s a process which is often keeps wine makers from expanding their operations. Finally, with the exception of a few ultra craft beers, wine is more expensive than beer.  It is much less of an impulse buy.  

    Looking ahead.

    Despite the challenges, the wine industry is strong here in North Carolina.  The growth potential for beer may be better, but wine does not need to bow out of the competition.  Over 1.2 million wine tourists visit NC every year, generating approximately $156 million.  That is a robust and extremely eager audience.  Increased growth will require wineries to continue to tap into that wine tourism market.  A strong marketing strategy should be at the center of any winery’s strategic plan.


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