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Oregon’s Wine Industry Continued on Its Long-Term Growth Trajectory in 2019, but Encountered Headwinds in 2020

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Oregon wine grapes and wines support a $7.2 billion economic engine that’s grown 27% since 2016

PORTLAND, OR, February 10, 2021 — The economic contributions the wine industry makes to Oregon showed robust growth from 2016 through 2019, according to the new report released today by the Oregon Wine Board. Conducted by Dr. Robert Eyler of Economic Forensics and Analytics, Inc. and Christian Miller, proprietor of Full Glass Research, this study is published every three years. Preliminary numbers for 2019 are once again revealing impressive growth from the work of Oregon’s grape growers and vintners and those that comprise the multi-faceted wine industry supply, sales and distribution chains in the state.  Over 1,297 Oregon wine grape growers produced a crop valued at $237.8 million in 2019, an increase of 14%. This number crested the $200 million mark only two years ago, and positions wine grapes as Oregon’s #1 fruit crop according to Eyler and Miller.

In 2020 however, COVID-19 along with tragic wildfires and government policy decisions combined to exert severe downward pressure on the industry’s momentum.

The four most telling figures of growth are as follows:

  • First, the sum of all economic activity in Oregon related directly or indirectly to wine was $7.21 billion in 2019, compared to $5.67 billion three years prior, a 27% jump in statewide impact. This includes winery and grower revenues, wholesale and retail sales of wine, related industries such as trucking and professional services, plus wages throughout the supply chain and the effect of employees spending those wages in Oregon.
  • Second, estimated number of wine-related jobs in Oregon totaled 40,047 in 2019, up from just under 30,000 in 2016, representing a jump of 35%. And wine continues to generate economic activity in every one of Oregon’s 36 counties.
  • The third finding worth noting is that wine-related activity in 2019 contributed over $184 million in state and local tax revenues. $88.5 million of that, or 48%, came from property tax revenues.
  • Finally, another remarkable number is the impact wine has on tourism as wineries continued to draw visitors to Oregon. Augmented by growth of tourism to Oregon overall and rising spending from visitors, Dean Runyan Associates estimates that overall tourism impacts in Oregon increased by $1.9 billion between 2016 and 2019, an estimated 17% increase. Through lodging, dining and other activities, wine-related tourism accounted for $894 million in statewide revenues, excluding sales from tasting rooms, a 13% increase over 2016 spending of $787 million.

A different story emerges for 2020. While wine-related wages topped $1.51 billion in 2019, up from $1.04 billion in 2016 and netting a 50% increase as the economy continued to recover from the Great Recession (2008-10), the researchers estimate that the 2020 pandemic and natural calamities drove wages back down to $1.16 billion in 2020. As a result of COVID-19, wildfires and other externalities, 2020 business revenue impacts are projected to be down 19.9%, contributing to declines of $1.48 billion, or 20.5%, in overall economic impact (revenue plus wages) compared to 2019.

Writes economist Eyler in the report, “The consolidated effects of COVID-19 and fires and smoke in 2020 reduced the industry’s economic impact by an estimated 20.5% from the 2019 estimates on Oregon’s economy,” but adds a positive note to the executive summary with notoriety of Oregon wines growing. “With Nielsen retail data also reflecting that Oregon wines led all major regions in both volume and dollar growth in 2018 and 2019, the outlook for the Oregon wine industry remains positive, though 2020 has been a year of large challenges.  COVID-19 dramatically curtailed in-bound tourist flow, and the impact of wildfire smoke on the 2020 wines is not yet fully understood.”

Miller, for whom this marks the fifth published Economic Impact Report for wine in Oregon, sees value in Oregon holding onto its high price per bottle, and the fact that demand, even during a tough financial year for most people, is still driving people to pay more for Oregon wine. “Many different data sources show Oregon maintaining the highest average price per bottle among wines from other states and even countries. This ability to command premium prices bodes well for the future of Oregon wine, as that is where growth continues in the wine market.”

The Oregon Wine Board and the state benefits from Miller’s 15-year perspective of Oregon’s wine industry. In fact, says OWB President Tom Danowski, “We are glad to sponsor this comprehensive report on the health and the performance of our state’s expanding wine industry as we look towards a gradual recovery. The ripple effects from our state’s wine economy on sustainable rural jobs, agritourism and local tax bases are increasingly important to our state. Christian Miller’s and Robert Eyler’s modeling expertise and experience with Oregon were especially critical this year as they worked to build a valid base of 2019 data off of which estimates related to the extraordinary circumstances of 2020 were possible.”

Wine grapes are Oregon’s most valuable fruit crop at $238 million, more than apples, cherries, cranberries, and hazelnuts combined. Pears come in a distant second at $109 million.

Charts below show the breakdown of all revenues, jobs and wages for each of four winegrowing regions, plus the top 10 wine producing counties, ranked by wine-related revenue. Please go here for a brief summary and link to the report, and for the full report, please click here. The findings of this study will be explored more fully on day three at the Oregon Wine Symposium, Thursday, February 18, 2021, from 1:00 to 1:45 p.m.

About the Oregon Wine Board:

The Oregon Wine Board is a semi-independent Oregon state agency managing marketing, research, and education initiatives that support and advance the Oregon wine and wine grape industry. The Board works on behalf of all Oregon wineries and independent growers throughout the state’s diverse winegrowing regions. To learn more, visit industry.oregonwine.org

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