The number of wineries in Ohio surged 51%, to 265 in 2016 from 175 in 2012, a new economic impact study by Frank, Rimerman & Co. finds. But the number of gallons produced remain flat at 1.23 million gallons, or 516 cases.
That suggests that not only is most of the industry’s growth coming from small wineries – those producing less than 5,000 gallons a year – but that the vineyards to support those new wineries have only recently been planted.
Still, Alcohol & Tobacco Tax & Trade Bureau ranks Ohio as the sixth largest wine producer in the U.S., the study says.
Ohio’s wine, grape and related industries contributed $1.31 billion to the state’s economy last year and employ 8,067 people with an annual payroll of $264 million.
The study estimates 1.38 million people visited Ohio wineries in 2016, up about 16% from 2012. To support those tourists, Ohio wineries employ 3,189 people with a total payroll of $68.3 million.
Ohio’s wine, wine grape and allied industries generated $75 million in federal taxes and $72 million in state and local taxes in 2016, including more than $6 million in total excise taxes.
The study notes that new vineyard plantings require three to five years before yielding a full crop, with another one to three years of aging for wine to be ready for sale. “Unlike many industries, once vineyards and wineries are established they are effectively rooted and tied in place – an Ohio vineyard cannot simply be relocated to another region or outsourced to another country,” the study observers.
Total wine produced in Ohio in 2016 was 1,227,000 gallons, or about 516,000 nine-liter equivalent cases. About two-thirds of all wine produced in Ohio is made from Ohio grapes. However, a few of the larger producers continue to rely on bulk wine and grapes sourced from outside of Ohio.
Overall, 90% of the state’s wineries had sales or production of less than 5,000 gallons annually (roughly 2,100 cases). Additionally, less than ten wineries had wine production of between 5,000 and 10,000 gallons in 2016. Less than 5% of the remaining wineries had production in excess of 10,000 gallons in 2016, or sales in excess of 5,000 cases, the study says.
Only a handful of Ohio wineries sell wine through the three-tier system. The majority of the wineries sell their wine direct-to-consumer through their tasting room and various wine events and festivals.
However, a few of the larger producers sell a significant portion of their wine through the wholesale channel or directly to restaurants, which skews the state’s overall distribution figures. Overall however, winery sales are roughly 60%/40% split between direct to consumer and through either distributors or directly to restaurants.
Retail and restaurant sales of wine decreased 10% from 2012 to 2016, down from $13.5 million to $12.2 million. This is primarily a result of a slight decrease in overall volume from some of the larger wineries.