Source Newsroom: Wake Forest University
Newswise — The number of wineries in North Carolina has more than tripled in the past decade. Ian Taplin and Saylor Breckenridge, sociologists have documented this rapid growth of retail wineries and commercial wine production in a study to be published in the 2005 issue of Research in the Sociology of Work.
They went door-to-door to wineries in the Yadkin River Valley and across the state to find out how the wine industry has taken root in North Carolina. They looked at how good grape-growing soil and climate conditions, the decline of tobacco, and a few pioneering entrepreneurs have given the fledgling industry its start.
Their survey of 14 North Carolina winemakers in 2003 covered topics such as why they decided to make wine, how they learned to grow grapes, the size of their vineyards and the amount of wine bottled and sold. They included vineyards making wine from muscadine grapes, located mostly in the eastern part of the state, and vineyards growing European-style vinifera grapes. The vinifera grapes, like those used to make chardonnays and cabernets, grow best in the Yadkin Valley and other western areas of the state.
The study included only bonded wineries, those wineries actually licensed to sell alcoholic beverages. The sociologists have continued to track the development of the wine industry. They are in the process of conducting a new study and will visit many of the almost 20 new wineries that have opened in North Carolina since their last survey.
According to the Taplin/Breckenridge study, legislation against the tobacco industry has reduced the ability of small tobacco farmers to continue to grow that crop and has led some (about 2 percent) to start growing grapes, a decision made easier by tax incentives for wine production. By switching to grape production, such individuals can continue to extract high value from small acreage, Taplin, professor of sociology, and Breckenridge, assistant professor of sociology, reported in their study.
Growing grapes is a long-term investment, with new skill sets and a greater need for marketing the end product. "So, compared to tobacco, it will probably never be as profitable," Taplin said.
They did find that small boutique wineries, the fastest growing group of wineries, are the most likely to make at least a small profit. These small wineries usually have vineyards with less than 10 acres. In their study, they describe two other types of wineries. The medium-sized wineries generally have 10-30 acres of vines and startup capital costs are in the $250,000-$500,000 range. These were generally started by farmers who switched from tobacco to grapes. Large capital-intensive wineries usually have more than 30 acres of vines and startup capital costs greater than $500,000.
They cite examples of ways winemaking entrepreneurs have developed profitable businesses. One winemaker located his winery close to Raleigh and formed a partnership with a Yadkin Valley farmer to provide grapes for wine production. In a similar move, another opened a winery near the coast, where vinifera grapes will not grow, to take advantage of the tourist market there and then contracted with Yadkin Valley grape growers to provide fruit.
"Much of the wine business is pitched around selling locally from their tasting rooms," Taplin said.
Taplin forecasts the economic gains for North Carolina lie primarily in increased tourism as bed and breakfasts, small inns and restaurants are built around wineries, particularly in areas where several wineries are clustered together.
"The more wineries created the more visibility the industry gets and the more it attracts new people," Taplin said.
Everyone interviewed for the study reported a high degree of information sharing between wineries. An increase in available information has taken place in recent years and continued sharing of knowledge among wineries on what grows best is one of the factors most likely to help the industry grow, the researchers said. The growth of infrastructure to support wineries, including a community college viticulture program in the Yadkin Valley area and the establishment of the Grape Council, whose aim is to promote the growth of winemaking in the state, have been important factors in the creation of new wineries.
According to the sociologists, the North Carolina wine industry is not ready to compete with California's.
"They might be able to establish a niche with newer types of wine made with grapes that grow well here like viognier and Italian varietals," Taplin said. "The biggest challenge will be keeping their price points down, to avoid charging too much for wine that has an unknown track record."
They point out in their study that North Carolina does have a small, historical winemaking tradition. North Carolina was one of the first states to commercially cultivate wine. The state's first commercial vineyard, Medoc vineyard, was founded in 1835 in Halifax County.