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Study: San Luis Obispo County wine industry generated $1.9 billion in 2015

A mechanical harvester grabs ripe petite syrah grapes off the vine at one of the J. Lohr vineyards in Paso Robles.
A mechanical harvester grabs ripe petite syrah grapes off the vine at one of the J. Lohr vineyards in Paso Robles. jjohnston@thetribunenews.com

The San Luis Obispo County wine industry had a total economic impact of $1.9 billion in 2015, according to a study released Thursday. That’s 6.5 percent of the county’s gross regional product.

The study, conducted by the University of California Agricultural Issues Center at UC Davis, found that wineries and wine grape growers generated a total of 13,627 jobs last year earning $388 million in wages. What’s more, wine-related tourism brought in expenditures of $194 million.

Christopher Taranto, communications director for the Paso Robles Wine Country Alliance, said the study will serve to set basic benchmarks for the local wine industry.

The UC Davis study was primarily funded and managed by the alliance, with support from the San Luis Obispo Wine Country Association, the San Luis Obispo County Agricultural Commissioner’s office, the Economic Vitality Corporation of San Luis Obispo County, Visit San Luis Obispo County and Heritage Oaks Bank, among other entities.

“For me and for others it confirms that it (wine) plays a very large role in the county,” said Michael Manchak, president and CEO of the Economic Vitality Corporation.

Chuck Davison, president and CEO of Visit San Luis Obispo County, declined to comment Thursday on the findings, saying he had not yet a chance to look at the report.

The UC Davis study looked at wineries and wine grape growers in the Paso Robles AVA (American Viticultural Area), and San Luis Obispo County as a whole, during a year when they dealt with “less-than-stellar yield” due to unusually cool and windy springtime weather as well as severe drought.

The study found that San Luis Obispo County wineries produced 20.4 million cases of wine in 2015, generating $732 million in revenue, while growers produced 127,367 tons of wine grapes valued at $297 million. (That’s contrary to annual crop statistics released in May by the San Luis Obispo County Department of Agriculture, which valued wine grapes at $146.4 million, making them the county’s second-leading crop last year.)

Local vineyards and wineries generated $54.9 million in state sales tax, 10 percent of the county total, and had total property tax assessments of $44.8 million, 28 percent of the county total, the UC Davis study found.

Meanwhile, those businesses generated 11.5 percent of the county’s jobs, findings showed. Grape growers employed 4,349 people, while 6,905 people worked in winemaking. Wine-related tourism accounted for 2,372 jobs.

Tourists made a total of 1.56 million visits to county wineries last year, the study found, resulting in 28 percent of the demand for hotel accommodations.

“When you see that wine is an economic driver to tourism, it puts into context what our assets really are,” Taranto said.

According to Taranto, researchers William A. Matthews and Josue Medellin-Azuara relied on data from a comprehensive survey given to Talley Vineyards in Arroyo Grande, Niven Family Wine Estates and Tolosa Winery in San Luis Obispo and several members of the Paso Robles Wine Country Alliance. Taranto did not name the Paso Robles area wineries, citing confidentiality concerns, but said they represent about 24 percent of total production in Paso Robles wine country.

The last time the San Luis Obispo County wine industry was the subject of such a comprehensive economic impact study was 2007.

Napa Valley firm MKF Research LLC, which conducted the study at the behest of the Economic Vitality Corporation and Paso Robles Wine Country Alliance, found that county wineries and wine grape growers had a full economic impact of $1.785 billion in 2006 — generating 8,114 full-time-equivalent jobs with $241 million in wages.

That study, which said local wineries produced 3.2 million cases in 2006, put the total retail value of San Luis Obispo County wine at $1.46 billion. Wine grapes were valued at $151 million.

The 2007 study also charted 1.2 million winery visits, generating $113 million in expenditures.

Although it’s tempting to compare the two studies, Taranto noted that they were created by two different entities using different research methods.

Still, the 2015 figures suggest that the San Luis Obispo County wine industry has successfully rebounded from the crippling recession of 2008.

“There has been some substantial growth with not only acreage but [also] wineries,” Taranto said. “It is a good time to be able to create this basis benchmark … for the county.”

Manchak agreed. “That benchmarking before and after the recession is pretty key,” he said.

Asked about the eight-year gap between the two studies, Taranto said expense played a part in the delay. He did not say how much the 2015 study cost.

Taranto was not sure when a similar economic impact study would be conducted next.

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