Study Portrays Industry Amid a Crush of Activity

The number of jobs at California’s wineries soared 46% between 1998 and 2002 as the state’s winemakers added sales and marketing staff to cope with increasing competition.

The job growth figures were included in a Wine Institute study released Tuesday that documents the economic weight and health of one of the Golden State’s signature industries.

The report, an update of a similar study sponsored by the trade group four years ago, indicates that the wine business is thriving despite threats that include intense foreign competition, a recent oversupply of grapes, an economic downturn and damaging insect infestations.

“When you hear about all that, it gives you the sense that things aren’t going well. But when you really look at the industry you can see it has grown,” said Vic Motto, chief executive of MKF Research, a St. Helena, Calif.-based wine industry consulting firm, which prepared the study.

California’s wine industry contributed $45.4 billion to the state’s economy in 2002, said the trade group, which commissioned the report to highlight the size of the business for state and federal legislators. A Wine Institute spokeswoman said the goal was to give lawmakers a better understanding of the importance of the business in the hope that they might be more sympathetic to the industry’s agenda, which includes removing limits on selling and transporting wine.

The $45.4-billion figure included such payments as the wages of a hotel clerk in Napa Valley and the bill for a vintner’s accountant in Temecula. A more narrow analysis in the study noted that California produced more than 3 billion bottles of wine in 2002 with a combined retail value of $15.2 billion.

“If California were a stand-alone country it would be the fourth-largest wine-producing nation in the world,” trailing only France, Italy and Spain, Motto said.

From 1998 to 2002, winery employment grew by 8,406 jobs to 26,852, the study said, citing data from the state Employment Development Department. The collective wages paid by wineries grew by an even faster rate, jumping 79% to $1.15 billion.

A consolidation that has shrunk the number of wine wholesalers 50% in the last decade has made it more difficult for vintners to land space on store shelves and wine lists. They have responded by increasing the size of their sales and marketing staffs, Motto said.

That trend is evident at Boony Doon Winery in Santa Cruz, where Chief Executive Randall Grahm said he had doubled his sales and marketing staff to 15 positions in recent years.

Among the study’s other findings:

The retail value of California’s wine production rose 24% to $15.2 billion from 1998 to 2002.

During that period, the number of wineries in California jumped 24% and the number of farmers growing wine grapes rose 9%.

The state’s winemakers sold 3.1 billion bottles of wine in 2002, a 20% gain from 1998.

At the same time, the number of acres devoted to wine grape plantings in the state grew 11% to 481,264.

California produced 623 million gallons of wine in 2002, more than 22 times the amount of New York, the second-largest state.

With a value of $486 million, wine was the state’s third-largest agricultural export in 2002, trailing only almonds and cotton.

Britain is the biggest importer of California wine, followed by Canada and Japan.

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A growing vine

A snapshot of California’s wine industry:

*--* 1998 2002 # of wineries 847 1,049 # of grape growers 4,400 4,805 Full-time winery jobs 18,446 26,852 Winery wages $641 million $1.2 billion Bottles produced 2.6 billion 3.1 billion Retail value $12.3 billion $15.2 billion*

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*Excludes exports and on-premise sales.

Sources: MKF Research, Wine Institute