Wine

Wine Industry Profile

Revised March 2019.

State Wine Links

Introduction

Wine is produced in areas where grape, tree fruit or berries grow. The alcohol in wine creates demand for the product. Wine production began about 8,000 year ago. Today 60 countries produce over 100 billion gallons of wine a year.

The United States produced over 836 million gallons of wine in 2013. The US is the fourth largest producer of wine and the largest consumer of wine in the world. The number of wineries in the US has increase to 10,047 in 2015 from 2,230 in 1998.

State 1998 2015
AK 1 9
AL 4 24
AR 10 28
AZ 13 69
CA 1094 4089
CO 25 155
CT 16 55
DE 1 4
FL 12 80
GA 12 60
HI 3 8
IA 13 120
ID 19 61
IL 19 143
IN 23 102
KS 7 41
KY 12 89
LA 6 12
MA 21 78
MD 14 94
ME 7 45
MI 43 279
MN 10 90
MO 42 202
MS 5 6
MT 2 20
NC 15 186
ND 1 15
NE 2 35
NH 4 48
NJ 25 72
MN 24 76
NV 1 6
NY 158 470
OH 71 246
OK 3 84
OR 120 554
PA 66 267
RI 6 15
SC 4 26
SD 1 29
TN 19 63
TX 45 412
UT 6 15
VA 62 310
VT 10 41
WA 124 950
WI 17 128
WV 11 29
WY 1 7

United States wine demand in 2013 is 2.82 gallons per resident up from 1.95 gallons in 1998. Per capita consumption will be higher if based on legal drinking age population (2013 adult consumption 3.89 gallons per person).

Wine produced from locally grown grapes, tree fruit or berries has the potential to add 8 to 10 times the value to the crop.

Marketing

Before producing wine for sale, the business must apply for and receive a permit from both the federal and state government.

State laws tightly regulate the marketing and distribution of wine in their state. Complying with those laws is a must-do. Shipping wine into another state requires the wine-seller to comply with the laws of that state. Breaking any of the federal or state laws can result in a felony.

At any one time, there are over 20,000 wine labels for sale in the US. A successful new wine must have a well-designed marketing program executed by people who enjoy meeting the public and have experience in selling.

Production

Wineries come in all sizes from a few hundred gallons a year to E&J Gallo producing over 200 million gallons a year.

All wine production follows the same four steps:

  • Harvest & Processing the fruit
  • Fermentation
  • Clarification
  • Packaging

While the process may sound simple, the complexity of the crop, weather, environment, taste preferences, production factors all combine to making a good wine difficult.

The production of good tasting will is the result of years of learning, training and experience.

Management

A winemaker, also known as an enologist or vintner, oversees the entire production process of creating wine, including grape harvesting, crushing, fermentation, aging, blending and bottling. They combine scientific concepts with practical experience to alter a wine's chemical composition and make key decisions based on the levels of acid, sugar, sulfur and sulfite within a wine.

Winemakers also supervise the work of viticulturists, the grape growers who work for the winery or an independently owned vineyard. In the case of smaller wineries, a winemaker's responsibilities could begin with grape planting and extend through to the marketing and selling of the final product.

A bachelor's degree in viticulture would be beneficial.

Financial

A five year review of over 200 winery financial reports from across the US show profits before taxes ranging from 3.4 percent to 9 percent.

Income Data

Year 2010 2011 2012 2013 2014
Net Sales 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of Goods sold 53.6% 53.7% 52.6% 51.3% 51.1%
Gross Profit 46.4% 46.3% 47.4% 48.7% 48.9%
Operating Expenses 38.0% 36.6% 37.8% 36.6% 37.2%
Operating Profit 8.4% 9.7% 9.6% 12.1% 11.7%
All Other Expenses (net) 5.0% 4.8% 3.7% 3.9% 2.7%
Profit Before Taxes 3.4% 4.9% 5.9% 8.1% 9.0%

The cost to develop a winery can be as high as $70,000 per 1,000 gallons (400 cases) of wine making capacity for just the building and wine making equipment. Adding a vineyard is extra.

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Resources/Other Links

EU-27 Wine Annual Report and Statistics, GAIN Report, FAS, USDA, February 2014.

List of Permitted Wineries, Alcohol and Tobacco Tax and Trade Bureau, U.S. Department of the Treasury.

National Association of American Wineries

National Grape and Wine Initiative - This nationwide coalition represents all segments of the grape industry including raisin, juice, fresh grape and wine. Membership includes grape growers, processors, wineries and representatives of academic institutions and cooperative extension organizations committed to improving the industry.

Oregon Wine Research Institute, Oregon State University - This website is a collaboration between Oregon State University and the Oregon wine industry. Resources include a Getting Started section for newcomers to the wine industry, sections dedicated to viticulture and enology, and a section listing Oregon State Extension publications and presentations on viticulture and enology.

Texas Wine Marketing Research Institute, Texas Tech University - The institute provides research and education to audiences interested in the wine and grape industry and fosters the economic development and growth of the grape and wine industry in Texas.

Other Links