Colorado's wine industry, based primarily on the Western
Slope, contributed more than $40 million to the state's economy
during the 2005 growing season, according to a new study conducted
by Colorado State University.
More than $21 million was generated from the production
and sale of wine when considering all the economic activity associated
with winemaking in an area, according to the report, which was funded
by the Colorado Wine Industry Development Board and the Grand Junction
Visitor and Convention Bureau.
Sales of wine produced in Colorado directly accounted
for $11.8 million, and $1.3 million came from the sale of grapes grown
in Colorado; employee wages, material and equipment purchases and tax
revenue accounted for about $8 million. Add the economic impact of wine-related
tourism and recreational enterprises such as tasting room visits, wine
festivals, wine trains and educational programs, and the total economic
contribution of the Colorado wine industry is $41.7 million.
Colorado's wine production ranked 22nd in the nation
and accounted for 3 percent of all sales nationwide, according to
the study. Colorado produced 689,000 liters of wine -- about 76,550
cases -- during the 2005 growing season, a five-fold increase from 10
years ago. The average 750 milliliter bottle of Colorado wine sells
for $12.86, according to the report.
"Wine has a tremendous positive effect on Colorado's
economy," said Dawn Thilmany, a Colorado State University professor
of Agriculture and Resource Economics who led the study with George
Kress, an emeritus professor from Colorado State University's College
of Business.
New Engine for Tourism
"In addition to the direct economic impact of the sale
of wine and grapes, the wine industry also boosts local economies through
the dollars of visiting tourists who might otherwise not have visited
or stayed as long in the region. Hotels are able to fill their rooms
and restaurants fill their tables during historically slower seasons.
It's a ripple effect."
"Wineries are generally in production in the spring
and fall, known as the shoulder seasons for Colorado tourism," Thilmany
said. "Since wineries are attractive destinations during these seasons,
this industry may help different areas to more fully utilize their existing
tourism infrastructure. Even in high seasons, the wine industry
can be used to justify a visitor to extend their visit a day or two."
Consumption of wine in the United States is growing
as the baby-boomer generation grows older and Colorado is outpacing
the nation on wine consumption, Thilmany said. In 2004, Coloradans consumed
an average of 3.66 gallons of wine per capita, almost 20 percent more
than the national average of 3.06 gallons per capita. As of March 2005,
there were 66 wineries operating in Colorado, the majority in Mesa County.
Since Colorado's wine industry is a new engine for
tourism, the state has the ability to increase the economic impact of
wine production through developing tourism campaigns highlighting Colorado
wines and its wine producing regions, Thilmany said. Many wine producing
regions in the nation have also been able to cultivate a complementary,
thriving art scene accompanied by boutique food-oriented businesses
making and serving artisan foods such as micro-cheeseries, gourmet chocolatiers
and small-batch sauces, preserves and mustards.
Overall, there is much optimism about the sustained
growth in the number and quality of Colorado wines, and increasing evidence
that it can be a catalyst for other economic development (tourism, food-based
businesses) as the size of the industry grows.
Category: Research at the University
Submitted: Tuesday, June 13, 2006
Subject: Ag and Resource Economics
Contact: Nikolaus Alrik Olsen
E-mail: Nik.Olsen@colostate.edu
Phone: (970) 491-6432