SodaCanyonRoad | Wine Industry Economics Study Session Presentations, Nov 5th

Wine Industry Economics Study Session Presentations, Nov 5th

Bill Hocker | Nov 6, 2014 on: The WDO

Below are the PowerPoint presentations made by participants at the Nov. 5th, 2014 Study Session hosted by the county planning commision.

A video of the event is here.
The presentation starts at 1:51:13 into the video.

Richard Mendelson, Attorney: The Business of the Napa Valley Wine Business
Craig Underhill, CPA: Economics of a Family Winery
Rob McMillan, SVBank: Shape of the Napa Wine Business (Rob McMillan's Blog)

The point that the speakers seemed to be making in these presentations is that the smaller wineries that continue to be built in the valley need direct-to-consumer (DtC) sales to be profitable and that sitting for tastings and events (i.e. food service) was more profitable than standing. It was a case for continued increase in visitation and food service at existing wineries and continued development of winery event centers, made by beneficiaries of that development.

The commissioners tried to formulate a question about the relationship of this business model and the impacts that visitation is having on the overall development of the Napa Valley. Resident Yeorios Apollas in his comment to the board pointed out that the presentations did not consider the economic costs of the external impacts (infrastructure development, increased employee housing and commercial demand) created by the increased tourism that these small wineries need to survive.

An economic question also not answered in the presentation: what are the revenues generated by small wineries in their tasting room sales as a percentage of the total revenues generated by the wine industry in Napa county? My question to the county: If it is a relatively small portion of the total wine economy in the county, is it worth jeopardizing the existence of an agricultural economy, by encouraging continued building and infrastructure development, to subsidize the revenues of a small percentage of the total revenue stream in the county? If, as I feel, tourism wineries are a threat to the agricultural economy of the valley, by requiring ever increasing development to accommodate tourist and tourism employees, should the county not consider banning the creation of wineries that require such development?

How much should the county and the residents of the county be expected to pay in mitigating the impacts of this model (wineries so small and inefficient at making wine that they need tourists and food service to survive), through development that continues to degrade the intent of the general plan and our quality of life (i.e. our agricultural economy and environment)?

As I have pointed out before, Screaming Eagle Winery has no visitation. A concentration on great wine making and effective publicity might prove a more sustainable economic model for the county's wine industry than food service and tourist experiences.