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Bordelon, B., T. Browning, and C. Wagner. 1996. Establishing new crops industries: The Indiana grape and wine industry model. p. 137-140. In: J. Janick (ed.), Progress in new crops. ASHS Press, Alexandria, VA.

Establishing New Crops Industries: The Indiana Grape and Wine Industry Model

Bruce Bordelon, Theresa Browning, and Cheri Wagner


  1. CHALLENGES
  2. EDUCATIONAL PROGRAMS
  3. CONSUMER EDUCATION
  4. CONCLUSIONS
  5. REFERENCES

Establishing a new crops industry can be challenging for several reasons. Consumer awareness and acceptance of a new product must be developed before markets can be established. Producers must determine consumer demands and develop methods of production that meet those demands. Producers and marketers must work together to develop a product that will bring a reasonable return to the producers.

The Indiana grape and wine industry is a good model for other new crops industries. Grape and wine production is "new" to Indiana only in the sense that the industry is at a stage of rebirth. Indiana has a rich history of grape and wine production. Swiss settlers, led by John James Dufour, planted vineyards in 1802 in Vevay, Indiana and established one of the nation's first commercial wineries. Dufour subsequently wrote the first book on American viticulture, The American Vine Dressers Guide, published in 1826. French and German settlers established similar enterprises soon after in other parts of the state. Nicholas Longworth brought the Catawba grape to the Cincinnati region in 1825 and established a significant sparkling wine industry. These events lead to the development of a substantial grape and wine industry in the state. The 1880 Bureau of the Census shows that Indiana ranked 5th in grape area with 3,851 acres (1,559 ha) and 16th in wine production at 99,566 gallons (3,769 hL). Though the industry survived disease and severe weather, prohibition (1919-1934) finally ended its progress.

The new era of the Indiana wine industry began following legislation. In 1971, the wine trade lobbied for passage of the Small Winery Law. Under this law Indiana wineries are allowed to produce up to 50,000 gallons (1,894 hL) of table wine per year from grapes, other fruits, and honey produced in Indiana. The law allows wineries to serve complimentary samples and sell wine by the glass, bottle or case on the premises of the winery. They may also sell wine by the bottle or case directly to the public, or to holders of retail or wholesale licenses, bypassing the three-tier distribution system. Today, 90% of the wine is sold at retail from the wineries--about 70,000 gallons (2,650 hL) in 1994--ensuring the winemaker's best profit margin.

Following passage of the Small Winery law, grape area and the number of wineries increased. As many as 18 wineries were operating during the 1970s. Since then several have closed, but the good producers remain active today. Grape area dropped sharply during the early 1980s following several harsh winters and poor prices for grapes. Only recently has the area been on the increase. Renewed interest in alternative crops, increased demand for Indiana-grown grapes and a strong regional industry have rejuvenated the Indiana grape and wine industry.

In 1989, the wine trade and a significant group of amateur producers, represented by the Indiana Winegrowers Guild, lobbied for legislation to establish the Indiana Wine Grape Market Development Council, a program designed to enhance Indiana's economic development by establishing a successful wine grape industry through research and market development. The Director of Purdue's Agricultural Research Programs administers the program funded by $0.05 per gallon of the existing excise tax on all wine sold in Indiana. The bill allows for grape and wine research and extension programs and a market development program at Purdue University. These programs provide critical early support for a unique agricultural industry without the use of general revenue funds.

CHALLENGES

Indiana is mostly rural and agricultural society in which wine consumption with meals is not a familiar practice. Wine jargon and snobbery add to the problem by keeping consumers uncomfortable with their knowledge of wine. Per capita wine consumption in Indiana remains low: about one gallon per person annually as of 1994, ranking Indiana 31st in per capita consumption out of 51 markets surveyed. However, consumption for all alcoholic beverages is flat, and although wine has been relatively exempt from neo-prohibitionism, it is not immune to the effects or reduced alcohol consumption.

Grape producers face challenges of adverse weather--hot, humid summers, and cold harsh winters--which increase the cost of production. Though grape production is well suited to lands unsuitable for row-crop production, compatibility with current farming practices can be a problem because grapes can be sensitive to herbicide drift from corn and soybean production. Competition with other grape producing areas keeps prices low, and discourages expansion. The Small Wineries Act specifically dictates that grapes, other fruit, and honey can be imported for wine making purposes only if those products are not available from within the state. This law reads: "For the purpose of encouraging the development of domestic vineyards, a small winery permit may be issued.... ." Though this gives Indiana growers a marketing advantage, the law has never been tested. Instead of creating legal arguments and antagonism, new growers are working with wineries to fill niches by producing cultivars that are not readily available on the open market. Many of these cultivars are well adapted to the state and can be produced very economically. The Indiana wine industry is building a reputation for high quality wines from French hybrid and American grapes and other fruits such as blackberry, blueberry, and strawberry. Planting of premium European cultivars has increased in recent years to meet the demand for premium wines. Though not well adapted to the state's climate, special production techniques allow consistent production on the best sites. The superior wine quality produced from these cultivars increases the value of European grapes, making the extra effort and risk worth taking.

The wine industry's willingness to work with growers of grapes and other fruits has solidified support among the state's diverse fruit growers. There is a strong movement for home-grown produce in the state and it is catching on in the wine industry as well.

The Indiana Winegrowers Guild was established in 1975 to further the causes of grape and wine producers in the state. The existence of this agricultural association has been instrumental in promoting legislation that benefits the industry. Without this organization's commitment and support, the recent legislation establishing the Indiana Wine Grape Council may not have passed. By working with the producers of other fruits, the wine industry is winning allies throughout the state's horticultural sector, and vice versa.

EDUCATIONAL PROGRAMS

Efforts to develop the Indiana wine industry have focused on the following areas: consumer education, education for commercial growers and vintners, and legislation to increase the industry's market. Purdue faculty and staff have emphasized trade education through workshops, private consultation, and printed resources. Education is crucial because few enter this industry with any academic or professional training in wine making, grape growing, or marketing. Many have no farming or business experience. It is the "romance" of wine that motivates them. To help these novices avoid mistakes, five professionals assist the trade with marketing, public relations, enology, and viticulture advice. Beginners and established producers can receive help through start up packets with pertinent market and trade resources, and private consultation with the experts to evaluate planned or existing business practices. An equipment loan program for those starting new vineyards and wineries provides physical resources. Workshops given three to four times a year by the team of experts keep the industry abreast of the latest technologies. Quarterly marketing newsletters provide education on local matters not available in the commercial wine trade press. Growers and vintners newsletters provide timely information throughout the year.

CONSUMER EDUCATION

Indiana wineries are marketed as tourist destinations for tours, tasting, and leisure. The message is sent through media relations, event planning, brochure development/distribution, and public speaking. Tasting is a key component in promotions, as tasting ensures public acceptance as a quality product. Tasting occurs at large fairs and festivals in urban markets, largely Indianapolis, within a short driving distance of the majority of wineries. In addition, educational speeches before civic, social, and church groups provide some depth on wine appreciation techniques. Consumer newsletters--containing local winery news and general wine education--are sent three times annually to the public who have attended events and responded to advertising and public relations activities. Media relations is focused on the key urban markets of Louisville, Cincinnati, and Indianapolis because of their proximity to the majority of wineries, as well as secondary markets in Indiana, such as Lafayette, Anderson, Evansville, Bloomington, and other winery locales.

A wine appreciation class is taught at Purdue University to familiarize students (future consumers) with wines and their role as a food beverage. The course is very popular across campus and is especially useful for students in the Restaurant, Hotel, Institutional, and Tourism Management curriculum.

CONCLUSIONS

The efforts of the Indiana Winegrowers Guild and the Indiana Wine Grape Council have paid off. The Indiana Wine Grape Council was authorized in 1989 and began its programs in 1990. Prior to this time, Purdue University had paid little attention to the grape and wine industry in the state. Since the beginning of the Council programs, four new wineries have opened, three additional wineries are opening before the end of 1995, and five more are in the planning stages. Vineyard area has almost doubled and continues to expand as growers adopt modern production practices and plant French hybrid, American, and European cultivars that are in peak demand. Sales of Indiana wines have increased 74% since 1990.

Cooperation is the key to the development of a non-traditional crop in unfamiliar territory. Indiana wineries work together to promote their industry, and neighboring wine states' marketing programs share successes and failures. The Indiana grape and wine industry did not try to reinvent the wheel. We have worked with our neighbors and adopted their ideas. Regional collaboration in research and extension activities with adjoining states have strengthened the industry throughout the region. A strong trade association has promoted legislation that supports the industry. The expansion of the Indiana grape and wine industry is proof that a cooperative approach to market development will work.

REFERENCES


Last update June 4, 1997 aw