News & Feature Articles Written About People & Places in Lake County, Ohio            

Wineries, vineyards pouring in big money
David W. Jones  News-Herald
  03/25/2008

Vineyards and wineries remain strong businesses in the region, and wineries are perhaps the No. 1 tourist industry in Lake, Ashtabula and Geauga counties.

But many such business owners don't have an estate plan for turning over their heritage to someone else, even as some such grounds are closed to become homes or remain vacant.
Most wineries have opened since 1990, and about a third of all vineyards opened in the same period.

So says the "Ohio Grape & Wine Economic Impact Study," based on research started in 2007 and mostly completed this year. The report pleased Tony Debevc, whose family has run Chalet DeBonne and DeBonne Vineyards in Madison Township for four generations.
"In the survey, wine districts are growing. It indicated a need for lodging activities and restaurants. And in the Grand River Valley, the report accurately indicated that it got nine new wineries in just the past few years," Debevc said. "The report has all the labor costs. But it doesn't have owner income for the wine districts, which are mostly mom-and-pop businesses. "The demand for food was noted. It is homegrown, nutritional and healthy. I think that is what draws people now that there are some concerns about food shipped in from overseas."

The study was done by Ohio State University Extension Services and involved the Ohio Agriculture & Natural Resources departments, Lake County Soil & Water Conservation District and Ohio Wine Producers Association. The study included interviewing 131 tri-county visitors, researching agricultural data and surveying 60 of the vineyard and winery operators contributing to an annual $30 million in economic value to the three counties.

On the bright side, 38.1 percent of responding growers planted 88.5 new acres of grapes in the last five years and expect to plant 156.5 new acres in the next five years, the study reported.

"But 78.6 percent of the respondents do not have a written estate plan, and 54.8 percent do not know who will take over their operation," the study said.
"Only 9.5 percent plan to sell or transfer their vineyard business in the next five years. However, an additional 28.6 indicated they may transfer (the business)."
If a vineyard owner ever sold the land, what "would best describe you and your family?" owners were asked. The responses:

* "May the highest bidder win." Yes: 16.7 percent.
* "Will only sell to someone who will keep it as a vineyard operation." Yes: 23.8 percent.
* "I would prefer it to remain as a vineyard, but I would sell to the highest bidder if I can get more money." Yes: 59.5 percent."
The owners were asked if they would take a lower price if the land would stay as a vineyard. In responses, 42.9 percent were "uncertain." But 33.3 percent said "No" and 16.7 percent said "Yes."
The study and responses covered such interest areas as:
Traveler survey
* "88.5 percent of visitors indicated the wineries were the primary reason for their visit to Northeast Ohio."
* "Respondents visited an average of 3.93 wineries per visit. 3.8 bottles of wine were purchased to taste on site by party, and 5.6 bottles were purchased on average to take home (average price of $8.11 per bottle)."
* Of the visitors, 35.8 percent stayed overnight in the tri-county area. Of those, 8.4 percent stayed in a hotel, 7.6 percent in a private residence, 7.6 percent in a bed and breakfast, 6.9 percent at a lodge and 3.8 percent at a campground."
* "19.8 percent ate breakfast, 50.4 percent lunch and 72.5 percent dinner at a restaurant while visiting wineries."
* "36.6 percent bought fuel in the tri-county region with an average fuel purchase of 12.61 gallons."
Profile snapshots
Responding tri-county vineyard and winery operation owners showed visitor and tourist visitors in a much larger picture:
* "Respondents reported that 332,750 persons visited their grape and wine operations in 2006."
* "32,000 additional visitors go to Vintage Ohio each August at Lake Farmpark in Kirtland."
Profiles
The owners of wineries and vineyards also filled out lengthy sheets describing such ownership and history as:
* The principal manager is average age 56.
* 71.4 percent of vineyard operators are the sole proprietor, 9.5 percent limited liability corporation, 11.9 percent corporation and 2.4 percent partnership.
* 20 percent of winery operations are sole proprietors, 33.3 percent limited liability corporation, 33.3 percent corporation and 6.7 percent partnership.
* Vineyards: 34 percent of all such operations have been established since 1990, and 82 percent of "grower" vineyards opened prior to 1980.
* Wineries: 69 percent have been established since 1990 (46 percent since 2000).
Production
* Grapes: Study respondents own 660 acres of grapes.
"429 acres of juice acres were reported with an average yield 5 tons an acre. The value of juice grapes was $455,488."
* Wine: "267 gallons of wine were produced per year by winery respondents. 72 percent of wine sales were reported to be retail sales."
Gross income
Respondents reported $2.26 million worth of retail wine sales and $3.6 million of wholesale wine sales.
For gross income, respondents reported a total $19.8 million in gross sales in Lake, Geauga and Ashtabula counties from such sales as:
* $92,000 in gift sales.
* $12.43 million in food/restaurant sales.
* $82,500 in special events.
* $5,000 in lodging/overnight accommodations.
* $80,000 from all nonwine sales.
Expenses
* Wineries: Thirteen winery managers reported a total
$5.38 million in capital expenses for five years. They expect $2.48 million in such costs the next five years.
They reported $3.5 million variable expenses and $937,500 for employee expenses in 2006.
* Vineyards: Capital expenses totaled $2.28 million for five years and could cost $2.23 million in the next five years, 39 vineyard owners reported.
The future
* New vineyard plantings: Of responding growers, 38.1 percent said they planted 88.5 new acres of grapes in the past five years.
Of respondents, 26.2 percent expect to plant 156.5 new acres of grapes in the next five years.
* Researchers were told by 52.4 percent of respondents that they would "consider compensation for preserving and protecting their vineyard from development."
"About 69 percent indicated there are abandoned vineyards within one mile of their vineyards. About 47.6 percent indicate that vineyards have been removed for housing within one mile of their operation."