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Prosperity in a Bottle The math of wine from Walla Walla to Southern Oregon

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Prosperity in a Bottle
The math of wine from Walla Walla to Southern Oregon
by Lance Sparks

This is a brief course in what we’re gonna call eno-nomics. We take eno from enology, the science of wine, including the farming/growing of grapes (called viticulture) to the making, bottling, even selling of wine. The suffix, -nomics, refers to the science of economics; hence, the economics of wine — the biz, the bux, the jobs, right?

Southern Oregon Wine Institute student Linda Buckle
Destemming the first grapes of the season

Now, I’ve been involved in the wine biz, in one way or another, for decades, and I have certainly been aware that wine is a major commodity of trade in countries all over the globe, and more all the time. In the U.S., wine is now being produced in every state of the union, with California still #1, followed by New York, Washington, Oregon, Florida (!). Across the world, Italy is still the top producer, with France next, but it’s a race after that: Spain is third, the U.S. runs fourth, Argentina has jumped into fifth place, but Australia is coming, along with Chile, Germany, South Africa and a bunch of others ramping up. For instance, China is just getting started (already ranked tenth in production) and Eastern Europe (Romania especially) is modernizing centuries-old wine-making. There might be some upper limit that’ll be set by the world market (and/or global warming perhaps), but so far producers seem willing to gamble for their share of the economic pie.

See, I knew that stuff, but I still got an education in the real numbers.

Friday afternoon, April 23, school was in at King Estate’s elegant private dining room, and I found myself surrounded by three presidents, all making smiles over the latest development in the Southern Oregon Wine Institute (SOWI), rapidly taking shape at Umpqua Community College. The host president was UCC’s Blaine Nissen, tall, professorial but wearing a wild tie and beaming his pleasure at being joined by Gordon Burns, president of ETS, a wine testing laboratory with roots in Napa Valley and McMinnville, here to announce a new branch to be opened in SOWI. Grinning like the best man at a wedding was Steven VanAusdle, long-time president of Walla Walla Community College and one of the influential figures in the growth of the Walla Walla wine industry, also a contributor to the plans and strategies that produced SOWI. VanAusdle made sure I had a copy of the 60-page report, “Economic Analysis of the Walla Walla Wine Cluster: Past, Present, and Future,” prepared by independent Economic Modeling Specialists, Moscow, Idaho, published June, 2007.

While the presidents made happy-talk, the book (for that’s what it was) contained the hard facts, and they tell a dramatic tale. The chart of wine employment alone was eloquent: In 1977, Walla Walla had one winery with one employee; in 2007, the report listed 92 wineries, many of them now considered genuinely world-class producers, directly employing 758 people. But the real economic impact of the growth of wine business in the valley and be seen in the wine “clusters,” the jobs related to wine and particularly to wine tourism, an additional 336 jobs, for a total of 1094. Each of these jobs has impact through what the economists call the “multiplier effect,” jobs created to support the folks who have the other jobs. And, we should note, much of this growth has come in just the years following the late 1990s.

VanAusdle is a trained economist who has been president of Walla Walla CC since 1984, and he has seen first-hand the economic problems that plagued that region over the years (double-digit unemployment, out-migration, particularly of young job-seekers). He also played a significant role in the growth, particularly by guiding his institution’s “partnerships” with citizens, businesses and state and local governments that helped turn the economy around, particularly toward wine. “This is not,” he said, “something a community college can do by itself,” even though and even if “community colleges are the first responders in economic recovery.” VanAusdle also had the foresight to understand that “wine is not an ordinary, off-the-shelf product,” noting “the incredible passion about wine”: “It’s not only an economic thing, it’s a cultural thing.”

The report backs VanAusdle’s insight, showing that many people drawn to the region must be considered “quality of life migrants” attracted to the lifestyle patterns created by the “wine cluster” economy: Wine and wine tourism connect to art, entertainment, upscale shopping, fine dining and a host of related enterprises. 

The report found that, from 1995-2000, out-migration from the region was running more than 1000/year; from 2000-2005, in-migration numbers reached over 1500/year, a huge turn-around, and the “household income of wine-cluster-attracted in-migrating families is $50,000 per year.” On this issue, the report concluded, “In 2007, we estimate that 222 jobs were generated by the spending of wine-cluster-attracted, quality-of-life migrants.”

VanAusdle and his “partners” combined to build the WWCC Institute for Enology and Viticulture to train and credentialize the students who would staff the growing wine industry, offering degrees in viticulture, enology, even wine marketing and management, leading to careers as vineyard managers, wine-makers, lab techs, salespersons and others. The Institute added another partner, WSU, to offer grads the chance to reach bachelors’ degrees, taking their expertise higher and deeper.

The results have been spectacular. Walla Walla has been reinvented, from a struggling community losing its young people, to a destination for wine-cluster-related employment, wine tourism (Sunset magazine’s Destination of the Year for 2005), and quality-of-life migrants. The report projects that, by 2017, over 6000 jobs in the area (almost 16 percent of total employment) will be related to the wine cluster of businesses and education.

Umpqua CC President Blaine Nissen has seen Walla Walla’s past success and has hopes that Southern Oregon’s wine-cluster can follow that trail to new growth for his college’s students and his region’s economy. Roseburg, Grants Pass and other towns and cities in the area are still struggling with job losses in the wood-products industries and desperately need to find new sources of employment and revenue. Nissen has worked vigorously to establish the sorts of partnerships that spurred growth in Walla Walla, joining with seven counties and many private businesses, raising millions of dollars in a tough economy to create the Southern Oregon Wine Institute, connecting education in wine to work in the area’s own rapidly growing wine-cluster. Lane Community College’s Culinary and Hospitality Program will become one of those partners, according to LCC President Mary Spilde, as reported by Nissen.

There’s no doubt that Southern Oregon has the potential to produce top-quality wines — it already does, in over 50 established wineries in the Umpqua and Rogue Valleys. That’s partly why ETS President Gordon Burns and his wife/partner Marjorie are willing to take the risk to extend their company’s wine testing business into SOWI. Burns, too, has been part of Walla Walla’s wine growth, and said, “What a partnership that has been.” His view of SOWI: “This is the next wave.” Burns also expressed the faith that, “Education can connect with business and the real world.”

Our lesson in eno-nomics can’t be complete without wondering if some important folks in Lane County — with more than a dozen wineries, including Oregon’s largest producer, King Estate — might benefit from taking this course. VanAusdle did offer an enticing economics-related view of wine: “It’s prosperity in a bottle.”