The Detroit Association of Business Economists Talks Wine

By Paul Traub

At the final event of its 2016–17 events calendar, the Detroit Association of Business Economists (D.A.B.E.) hosted three presentations on what it takes to own and operate a vineyard (where grapes are grown) or winery (where grapes are processed into wine) in Michigan. The event took place on May 11, 2017, at the Detroit Branch of the Federal Reserve Bank of Chicago. While it may sound romantic to live on a vineyard, the attendees of this event learned that growing grapes and operating a winery is a tremendous amount of work. Thomas Smith, associate director of the Institute of Agricultural Technology, moderated a panel of three speakers—Karel Bush, executive director, Michigan Grape and Wine Industry Council, Dave Youngblood, owner and operator of Youngblood Vineyards, and Cristin Hosmer, VESTA and the Michigan Wine Collaborative.

Vineyards and wineries represent a growing part of Michigan’s economy. Michigan’s terroir or natural environment for producing wine features favorable factors such as good soil and topography together with a growing climate that gives its wine a unique taste. There are three main types of grapes grown in Michigan—classic European varieties called vinifera, native varieties including Concord and Niagara, and hybrids, which are a botanical cross between vinifera and native varieties. Because of Michigan’s harsh winters, most of its grapes grow within 25 miles of Lake Michigan, where the moderating “lake effect” protects the vines. The lake effect produces snow in the winter, protecting vines from early spring frosts that can damage the grape buds and lower production. In addition, the warmer air off the lakes in the early fall helps protect against freezing, thereby extending the growing season by up to four weeks. According to the Michigan Grape and Wine Council, Michigan has 13,700 acres of vineyards, making it the fourth largest grape-growing state in the country. While most of Michigan’s vineyard acreage grows juice grapes, about 2,850 acres are devoted to wine grapes, making Michigan the fifth largest wine-grape producer in the nation. Michigan grows about 20 types of wine grapes, but the top five account for almost 65% of total production by acreage. They are: riesling (27.9%), pinot noir (10.2%), chardonnay (9.6%), pinot gris (9.6%), and cabernet franc (7.1%).

Michigan’s vineyard area has more than doubled over the past ten years and the state now has 131 commercial wineries bottling more than 2.4 million gallons of wine annually. In fact, Michigan’s wine production has increased by 34% over the past five years, making it tenth state in the nation in wine production. Growth in wine production is expected to continue, with new hybrids allowing for production in areas of the state that were not previously hospitable to wine grapes. An added bonus for Michigan’s economy is that wineries are popular tourist destinations, attracting more than two million visitors annually. The wine industry directly contributes $300 million annually to Michigan’s economy, and the combined wine, grape, and juice products and related industries add nearly $790 million in total economic value to the State of Michigan. To learn more and to review the complete presentations, click on the links below.

The History and Economics of Michigan’s Wine Industry, Karel Bush, Michigan Grape and Wine Industry Council

Economics of a Vineyard, Dave Youngblood, Youngblood Vineyards

The Economics of a Winery, Cristin Hosmer, VESTA and the Michigan Wine Collaborative