The Booming Wine Industry Is Boosting Virginia’s Economy

Wine lovers rejoice!!!  Virginia’s wineries have become a flourishing part of the state’s economy.  And, it’s been a long time coming.

In 1619, the Jamestown settlers signed into law a requirement for each male settler to plant and tend at least ten grape vines.  The vision for Virginia wine dates back four centuries, and even includes Thomas Jefferson, who grew grapes on the famous Monticello estate.

However, it is the past three decades that have seen those early settlers’ vision for Virginia wine come to life as a thriving industry.

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Grape Vines at Breaux Vineyards

In the early 1970’s, some industrious grape growers identified specific varietals that matched the unique growing conditions of the Virginia countryside.  The resultant increase in Chardonnay, Viognier, Cabernet Franc, and Merlot grapes started an escalation in wine production that has not slowed since.

The opening of several new wineries followed in 1975.  Thus began a 30-year transition of Virginia viniculture, evolving from local farmers’ hobby to a statewide industry that is creating job growth, tax revenue, and an opportunity to extend the agricultural roots of Virginia.

The growth has been explosive.  In 1979, there were only 6 wineries in the state. By 1995, that number had risen to 46. There were 97 wine-producing vineyards at the end of 2005. Now, Virginia boasts over 260 wineries, the fifth largest number of producing facilities in the United States.

An economic impact study commissioned by the Virginia Wine Board in 2005, 2010, and again in 2015 revealed not only growth in production and international recognition, but a significant economic impact to the state of Virginia that has been recognized publicly by Governor Terry McAuliffe.

“Since the beginning of my administration, one of our top agriculture goals was to make Virginia the preeminent East Coast destination for wine and winery tourism, and I am pleased our efforts are helping make this a reality,” said McAuliffe. “The Virginia wine industry has continued to see tremendous growth over last five years, which has bolstered tourism across the Commonwealth.”

In fiscal year 2016, the Virginia wine industry had another reason to toast itself — wine sales reached the highest point ever for Virginia wine. Nearly 556,500 cases — each case representing 12 bottles, up from about 524,800 cases the previous year, representing a 6-percent increase.

“Virginia wine is about the experience, the adventure, excitement and story of visiting a winery and tasting the ‘fruits’ of grape grower’s and winemaker’s labor in the midst of a vineyard and beautiful Virginia countryside,” says Mark Malick, Co-owner and Grape Farmer of Maggie Malick Wine Caves in Purcellville, VA.

And, the experienced winemaker appears to be correct. The number of people visiting Virginia wineries has grown by 39 percent, from 1.6 million visitors in 2010 to 2.25 million visitors in 2015. At the same time, wine-related tourism expenditures has grown dramatically from $131 million to $188 million, a significant 43-percent increase.

Many in the industry attribute the growth of tourism to these factors: the increase in the number of wineries and the steadily improving quality of the wines.

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Beautiful Circular Tasting Room at Fabioli Cellars in Leesburg

Tourism is not the only segment of the economy that is benefiting.  “Due to the increase in demand, winemakers are purchasing more and more land, which in turn is raising property values,” stated Scott Buzzelli of Middleburg Real Estate in an interview last month. (link)

There has been a 22-percent increase of grape-bearing acreage since 2010, as well as a 188-percent increase in tax revenue for state and local governments.Wine Impact Graph

The state’s overall wine sales and production are not concentrated within a few large wineries. On the contrary, most of the state consists of small wineries, each with production under 10,000 cases. The larger wineries sell a larger proportion of wine through distributors and retailers, while smaller producers tend to focus on selling their wine direct-to-consumer and direct-to-trade.Wine Tasters at Breaux

Across all winery sizes, there has been a significant increase in the expansion of related-product offerings and events, private parties, weddings, and festivals held on winery properties and, thus, the winery’s function has continued to evolve past simple production.

Some existing wineries have expanded their facilities to incorporate these additional revenue streams, resulting in increased winery employment and support services, and increased rural economic development.

The Virginia Department of Commerce estimates there was over $53 million in revenue generated from these wine-related events in 2016.

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Fermenting Tanks at Maggie Malick’s

Over the last several years, government and townships have recognized the importance of the wine industry to the Virginia economy. At the state level, they have worked to set up tax credits for winery and vineyard start-ups and expansion. Furthermore, funding for the Virginia Wine Promotion Fund’s research, education, and marketing programs has nearly tripled.

If this positive growth trend continues, the grape-laden hills of Virginia are on their way to becoming the nation’s Napa Valley East.

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