The California Wine Industry – a road map for the success of Michigan’s wine growers and wine makers

Suttons Bay Depot Legal News Article About Michigan Wine IndustryCalifornia boasts the largest wine industry of any state in the country. California’s past success and bright future with respect to its wine industry is primarily the result of two factors. First, the wine growers in California implemented sustainable wine growing practices that meet current needs without compromising the livelihood and needs of future generations. Second, approximately 60% of California’s wineries are family owned and operated and have implemented family business succession planning to protect ongoing viability of the business.

A prime example of a family owned winery that adhered to both of the aforementioned elements that has led to a successful transition of involvement and ownership of family members into a fourth generation is the E&J Gallo Winery which is celebrating its 75th anniversary.

The mistake many family business owners make, no matter what type of business, is not designing and implementing a business succession plan. The predictable consequences of the failure to plan are fights over control between surviving family members and working capital being devoured by having to pay higher estate taxes. While the older generation business owner is alive, the relationships and potential or present problems between the next generation of business ownership is rarely so serious that they cannot be improved and, in some instances, resolved entirely. The process of succession planning may be difficult but the risk associated with the alternative of taking no action to plan or doing nothing carries the greatest possibility of risk. Doing nothing may feel good in the short term, but no succession plan is always a terrible succession plan in the long run.

The lawyers at Wright Penning & Beamer are skilled and experienced in advising family business owners how to develop a succession plan that ensures a continuation of the business for future generations to grow and prosper as a “family business”.

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Wine industry impacts economy

Wine grapes are grown in 46 of California's 58 counties. Its 10 leading wine regions are Amador, Carneros, Livermore, Lodi, Mendocino, Monterey, Paso Robles, Napa, Santa Barbara and Sonoma. From these regions, more than 43 different varieties and blends are grown and cost from $10 to more than $150 per bottle.

Today, however, wine consumers want to know not only where wine is grown, but how it's grown.

Although winegrowing terms such as organic and biodynamic have drawn consumer curiosity, most grapes are grown sustainably. "Simply put," said Karen Ross, President of the California Association of Winegrape Growers (CAWG), "sustainability means that we grow and make wine in a way that meets the needs of the present without compromising the livelihood and needs of future generations."

In 2002, based on a code of 232 best practices, covering every aspect of winemaking and winegrowing from ground to glass, the Wine Institute and CAWG created a Sustainable Winegrowing Program. Since then, thousands of growers and vintners have adopted socially and environmentally responsible practices. For more information on sustainable winegrowing, log on to sustainablewinegrowing.org.

DID YOU KNOW?

California is the fourth largest wine producer in the world, making more than 90 percent of the wines in the U.S. The following are other facts supplied by the Wine Institute:

-In the U.S., two out of every three bottles enjoyed are California wines.

-The majority of California's 2,700 wineries and 4,600 grape growers are family-owned and operated.

-Nationwide, California's wine industry generates 875,000 jobs.

-Overall, California's wine industry economic impact exceeds $125.3 billion.

-In the U.S. last year, California's wine industry generated $19 billion in retail sales.

WHERE MICHIGAN STANDS

With 56 commercial wineries (up from 17 in 13 years) producing more than 375,000 cases of wine annually, Michigan has successfully linked two growing industries: agriculture and tourism, under the moniker of agritourism.

Also, according to Michigan Wines official Web site, Michigan's wine industry accounts for more than 5,000 jobs across the state for a payroll of more than $190 million and contributes $800 million to the state's economy annually.

More than 1,500 acres are devoted to wine grapes, ranking Michigan eighth in the U.S. In the state, vineyard acreage has increased 25 percent in the last 10 years. Yet, that's not nearly enough to satisfy growing demand, especially for riesling.

Help the economy - drink more Michigan and California wine!

Eleanor & Ray Heald are Contributing Editors for the internationally-respected Quarterly Review of Wines and Troy residents who write about wine for the Observer & Eccentric Newspapers. Contact them by e-mail at focusonwine@aol.com.

From an article which appeared in the Observer & Eccentric on November 6, 2008. Link to the online article.