WineAmerica’s 2022 National Economic Impact Study vividly demonstrates the incredible value-added nature of wine and its huge contributions to the American economy: $276 billion in 2022.
Of that, $111.5 billion (40%) is direct impact, while $76.3 billion (28%) is supplier impact and another $88.3 billion (32%) is induced impact benefiting the communities around the country which wine touches. In other words, 60% of wine’s economic impact benefits businesses, communities and individuals that are not directly involved with the production, distribution, and sales of wine.
Now, that’s value-added.
So what are these three types of impact?
- Direct: Jobs and activity directly related to the production, distribution and sales of grapes and wine.
- Supplier (Indirect): Jobs and activity related to suppliers of goods and services needed to support the grape and wine industry.
- Induced: Jobs and activity related to businesses in communities which rely on expenditures by employees in the two other tiers.
Remember the auto crisis in 2008, and the federal government’s massive bailout? Nobody asked if it should be done; they just did it. That urgency reflected the enormous TOTAL economic impact of that industry in all of these categories and all across the country (and world). The auto industry’s failure during the economic crisis could have caused a massive downward spiral, also known as a viscous cycle.
The opposite of that is an upward spiral, or virtuous cycle, in industries like wine that continue to grow. If the Direct Impact is growing, so are the Supplier and Induced impacts. And a good business climate helps that happen, which is why WineAmerica constantly seeks to protect and enhance the business climate for the American wine industry.
So what are the components of the Direct category, and the total Output they represent?
- Winery: $27,299,929,400
- Vineyard: 5,961,536,100
- Wholesale: 14,117,057,800
- Retail: 51,088,134,000
- Associations: 200,085,700
- Research & Education: 200,920,100
- Tourism 12,694,439,100
What’s clear is the importance of sales activity (wholesale, retail, tourism, and even some part of the winery category) in supporting jobs and wages as well as dominating total output. In terms of jobs, the Retail category alone has 675,536, or 67% of the total and 9 times those in the Winery category (75,645).
This also helps to explain why different states rank differently depending on what you count. In terms of wineries and vineyard acres, the top five are: CA, WA, OR, NY, and TX. But in terms of total impact it’s CA, TX, NY, WA, and OR. One key to the flip-flop is population rank nationally–CA (1), TX (2), NY (4), WA (13), and OR (27)–which in turn drives the purchase of wine at restaurants and retail outlets along with the wholesale network required to service them.
For a more complete picture in summary fashion, below is a quick table of rank in various categories, with the Population figure based on national statistics including all 50 states, and the others ranked from 2 to 5 based on the metrics in our study (remember: CA is #1).
NY OR TX WA
Population Rank 4 27 2 13
Wine Producers 4 3 5 2
Vineyard Acres 4 3 5 2
Jobs 3 5 2 4
Wages 3 5 2 4
Tourist Visits 2 4 5 3
Tourist $$ 2 4 5 3
Total Taxes 2 5 3 4
TOTAL IMPACT 3 5 2 4
FYI, the total impact figures are:
- TX: $20.35 B
- NY: $14.93 B
- WA: $ 9.51 B
- OR: $ 7.18 B
That combined $51.97 B is nearly 20% of the national figure, so including California the five largest states account for about half of the national impact, with the other 45 states accounting for the rest.
But…and this is vital to understand…every state’s wine industry is important to its economy–not only in dollars and cents, but also as a source of regional pride and quality of life.
Next week we’ll take a look at the Supplier category’s many benefits from the wine industry. Detailed data and related information for all 50 states is on our website.
Wine–the All-American Art Form