Michigan's Wine Industry is Adding $5 Billion to the Local Economy

There are more than 130 wineries statewide


Published:

Two new studies show that this year, Michigan’s wine industry will bolster the state’s economy by around $5 billion.

WineAmerica, a Washington, D.C.-based industry group, pegs the number at about $4.9 billion. Another study funded by the Michigan Department of Agriculture & Rural Development came in at around $5.4 billion.

Both studies were done by John Dunham & Associates of New York, and measure total economic activity and value added by examining production, distribution, sales, and consumption of wine in Michigan. The results vary based on differences in definition and additional survey data from Michigan wineries that led to slightly more jobs in the state.

Both studies used a wide base of criteria to reach their conclusions.

“This ultimate value-added product preserves agricultural land, provides American jobs, attracts tourists, generates taxes, and enhances the quality of life,” the WineAmerica report states.

“The broader economic impact flows throughout the state, generating business for firms seemingly unrelated to the wine industry,” the report adds. “Real people, with real jobs, working in industries as varied as farming, banking, accounting, manufacturing, packaging, transportation, printing, and advertising depend on the wine industry for their livelihoods.”

The studies confirm what we’ve suspected for years — the increased number of wineries means more jobs, more wages, more taxes paid, and more travelers to the wine regions.

The Michigan Grape and Wine Industry Council says there are now 132 wineries in the state, bottling more than 2.4 million gallons annually.

Some 27,930 people work directly in the Michigan wine industry, generating $772.6 million in wages. The industry directly generates $2.1 billion in economic activity in the state. 

WineAmerica’s report also adds that an additional 6,867 jobs exist in secondary areas, such as suppliers and the goods and services industry. Expanding further, the study states that the wine industry touches a total of 43,677 jobs.

Digging further down, the study finds that where the Michigan wine industry accounts for full-time jobs, the pay is surprisingly good: an average of $37,200 in annual wages and benefits.

“The total wages generated by direct, indirect, and induced economic activity driven by the wine industry are $1.6 billion,” the study concludes.

The Michigan study also counts the spin-off created by tourism. It estimated that some 514,130 people made nearly 1.7 million unique visits to Michigan’s wineries and vineyards.

“In addition to spending in the wineries and vineyards on wine, food, events, etc.,” the study reported that tourists “spent an estimated $252.7 million in other parts of the Michigan economy.” That generates about 4,042 jobs or $88.6 million in wages. 

Tax revenue from wine sales is another factor used in both reports. The Michigan study finds wine directly produces $719.4 million in federal, state, and local taxes. The industry additionally generates $134.1 million federal and state consumption taxes, which include excise and sales taxes.

The bottom line: Not all the information in the reports are new, but they provide fresh and impressive views. And they show the wine industry as an important sector of the state’s economy.

 

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