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Report Finds Wine Sector Making $30.4M Economic Impact

A report commissioned by a local advocacy group for the wine industry in San Diego County said it generated $30.4 million in regional economic impact in 2016.

That was among a number of findings contained in a report recently released by the San Diego County Vintners Association, a nonprofit membership organization. The group commissioned the report to measure factors that are driving or inhibiting the industry’s growth locally.

Vince Vasquez, the analyst who authored the report, prepared an 18-question survey which received responses from 37 vineyard and winery owners during April and May of 2017.

He found the region is home to about 116 wineries, from North County to the U.S.-Mexico border. The report noted concentrations in the San Pasqual Valley and Ramona Valley, as well as northern Escondido and Fallbrook.

The most popular wine grape varietals grown, cultivated and/or sold in 2016 were cabernet sauvignon and syrah, the report said.

The report estimated the industry supports just shy of 700 jobs in San Diego County, including about 500 direct jobs.

Crop Value Increased 429%

Vasquez reported the total acreage of grapes harvested since 2010 has increased by 111 percent and crop value has risen 429 percent. That’s when an ordinance was passed countywide relaxing the permitting process for wineries, spurring the creation of more such establishments.

From 2015 to 2016, sales at wineries rose by 88 percent, the report determined.

“This is a strong indicator of a vibrant, growing industry, and underscores that most wineries in the region are relatively new and small-scale,” Vasquez said.

While the number of winegrower licenses in San Diego has increased in recent years, the number of licenses issued in Riverside County, which is a wine destination because of Temecula Valley, peaked in 2013, he noted. Today there are 93 such licenses in Riverside County compared with 165 in San Diego County. It lags only Napa, Sonoma and the Central Coast (San Luis Obispo and Santa Barbara) in total licenses.

“This suggests that the phenomenon of new wineries in San Diego County is unique, and driven principally by local factors, such as regulatory changes,” Vasquez said.

Wineries in San Diego County generated more than $23.8 million in gross sales, $1.1 million in sales taxes and nearly that much again in property taxes, the report estimated. Of that, winery owners attributed 27 percent to tourism and direct sales to tourists. More than 90 percent of respondents said wine tourism and wineries were supported by residents locally.

Relatively Small Operations

However, responses indicate San Diego-based wineries remain relatively small. The majority reported producing fewer than 1,000 cases in 2016.

Still, local growers say they have significant experience, with 38 percent of respondents indicating they have six to 10 years of experience in the industry, and 27 percent indicating 11 or more years. And the majority reported having earned a certificate in oenology, viticulture, wine studies or sommelier training/beverage service.

Wine growers reported permits/local regulation, labor costs and groundwater/runoff rules as their top policy challenges.

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