PORTLAND, March 19, 2018 –If there’s truth in numbers, and in wine there’s truth, then all three coexist in harmony with the newest economic impact figures compiled by Full Glass Research, and released today by the Oregon Wine Board. The preliminary numbers in the economic impact study, last conducted in 2013, measures the economic contributions the Oregon wine industry makes to the state, and is revealing impressive growth from the work of Oregon vintners in 2016.
The three most telling figures are as follows; the sum of all economic activity in Oregon related directly or indirectly to wine is $5.61 billion, compared to $3.35 billion three years ago, a 67% jump in statewide impact. This includes winery and grower revenues, wholesale and retail sales of wine, related industries such as trucking and professional services, plus the effect of their employees’ spending in Oregon. The second telltale number is that estimated wine-related and induced jobs in Oregon totaled 29,738, up from 17,099 in 2013, representing a 74% jump. Related wages topped $1 billion, which led to over $155 million collected by the state in taxes.
The third growth benchmark is heightened tourism impact, more than doubling since 2013. Oregon’s wine regions are a strong attraction for tourists and the upscale demographics of wine consumption ensure that many wine tourists spend more than the average visitor, boosting restaurant and hotel revenues. Growth was propelled by the exponential effect of an increase in visitors to Oregon, an increase in the proportion of them that were tourists or “leisure visitors,” and an increase in the percent who visited wineries. Total revenue was almost $787 million, up from $295 million in 2013, a 162% increase over three years.
As echoed in Nielsen store data released in summer 2017, Oregon winemakers have capitalized on premium quality that consumers recognize and are willing to pay for. In the report, Full Glass Research proprietor Christian Miller writes, “Oregon winegrowers have maintained their focus on the higher-priced, higher-quality segment of the wine market. Of the wine producing states, Oregon growers continue to achieve the highest average price per ton of grapes while Oregon wineries realize the highest average revenues per case.” Wine sales within the state were up too, with sales of all wine (not just Oregonian) in the on- and off-premise retail tiers, going from $816 million to just over $1 billion, a 21% surge.
Nielsen data indicates that while national wine dollar sales in off premise retail channels grew 2.1% % versus one year ago, Oregon’s sales grew 17%, helping drive the overall $20 and up bottle segment up 8%. “The US wine market continues to expand, but Oregon is clearly a growth leader, percentage wise ahead of all other major growing states and countries around the world,” said Danny Brager, senior vice president of the beverage alcohol practice at Nielsen. “Oregon winemakers have done a great job stimulating demand for their wines, keeping prices fair on the premium ones, and managing this growth in a smart way.”
Sally Murdoch, Oregon Wine Board communications manager, is pleased with the meteoric climb. “It’s emblematic of the hard work our growers are putting in day in and day out that we see this growth,” he said. “They don’t cut corners, most everything is crafted by hand, especially with our small to medium-sized producers, which make up the bulk of our state’s wineries, and people who go to tasting rooms often are treated to talking with the winemakers working the land themselves. Continued success in this direct sales segment is vital for Oregon since consumers pay on average, $39 per bottle, according to ShipCompliant data. Both direct-to-consumer (DtoC) and Nielsen retail pricing data confirm OR wines are selling well even though they’re priced somewhat higher on average than wines from other U.S. regions.”
As for varieties, demand for Pinot noir, Oregon’s leading grape, continues to grow at an average of 8% a year since 2013, compared to an average of 2% for the wine market as a whole. The research also found that Oregon has managed to maintain a price premium for its leading white grape, Pinot gris, despite substantial competition from California and Italy. Reports Miller: “Positive reviews of Oregon’s Chardonnay and emerging regions (such as Southern Oregon and the Columbia Gorge) are broadening Oregon’s offerings and visibility in the market.”
More statewide increases from 2013 to 2016 are listed here:
- Winery sales: from $363M to $529M, an increase of 46%
- Wine exported outside of Oregon: from $127M to $195M, an increase of 53%
- Wine sold Direct-to-Consumer (DtC): from $197M to $286M, an increase of 45%
- Wine grape crop value: from $128M to $167M, an increase of 30%
- Wholesale revenues: from $463M to $517M, an increase of 12%
- Retail sales (on/off premise): from $885M to $1044M, an increase of 18%
- Wine-related tourism: from $295M to $787M, an increase of 167%
Finally, compared to 2013 data, wine grape acreage increased 27%, and tons crushed by 42%. 725 Oregon wineries (up from 605 in 2013) bottled over 3 million 9L cases of wine and had revenues of over $529 million in 2016 from the sale of packaged wine. From 2013 to 2016, Oregon winery revenues increased 46%, reflecting increased DtC sales and through the U.S. distribution system, as well as an increase in the prices achieved. Yields trended upwards as plantings matured and viticulture techniques improved. Also since the 2013 report, growth and investment in the Oregon wine industry has expanded with a net increase of 6,480 planted acres, and the number of wineries increasing by at least 120, and winery sales in 9L cases up 30%.
For the full report, please go here. For a brief summary and link to the report, click here.
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About the Oregon Wine Board
The Oregon Wine Board is a semi-independent Oregon state agency managing marketing, research and education initiatives that support and advance the Oregon wine and wine grape industry. The Board works on behalf of all Oregon wineries and independent growers throughout the state’s diverse winegrowing regions. Visit oregonwine.org.
