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By July 6, 2018 0 Comments Read More →

How the Pennsylvania Wine Industry Is Rising to the Top

By Paul Vigna

For years, Pennsylvania’s wine industry was growing in numbers and scope but stagnant in legislative and financial support, especially when compared to neighboring states such as New York and Virginia.

That changed in 2016 as part of a statewide transformation called Act 39, which allowed alcoholic beverage sales beyond the producers and the state’s liquor system. Connected to that legislation was the industry’s first legitimate funding steam, which began in 2017 with $1 million awarded by the Liquor Control Board through the Pennsylvania Wine Marketing & Research Board. It’s raised through new direct shipping fees. Similar amounts were passed along in May 2018 and again Wednesday last week, the latter tied to the 2018-19 fiscal year.

For a state that had so little for so long, the $1 million sounds lucrative. But compare it to several other East Coast states and it puts that funding into perspective. The impact of Act 39 and its effects on distribution further complicates things.

Annette Boyd

Annette Boyd is the director of the Virginia Wine Marketing Board office and can recall that state’s funding bump to $1.2 million in 2010. It’s nearing $2 million today and growing annually because it’s tied in to ever-increasing sales of Virginia wine in-state. Generally, two-thirds goes to promotion, although that ratio is flexible.

Eight years ago, elevating that state’s wine profile was its top priority. “Our No. 1 goal was to drive people to wineries,” Boyd said. “We felt like if we could get them to a winery, the rest would happen on its own.” Other goals were to create interest from the trade and generate more media. Part of that was achieved by revamping the Governor’s Cup and building it around a gala that takes place annually in Richmond.

Since then, with the number of Virginia wineries tripling since 2007 and profile far less an issue, those priorities have been tweaked to, among other things, establishing a regional footprint.

New York’s initiative has been another success story. Jim Trezise was, for 31 years, the president of that state’s Wine & Grape Foundation before becoming president of WineAmerica in January 2017. His funding got as high as $2.6 million, usually two-thirds going toward promotion.

“As to successes, our research-funded program was great thanks to Cornell, which we are very lucky to have,” he said. “Our promotion strategy was essentially ‘Bring the people to the wine and take the wine to the people’ [i.e., tourism, and urban market promotions in a coordinated fashion], which worked well. In both research and promotion, having long-term programs and consistency is key. Our annual wine competition [New York Wine & Food Classic] was also a great success.”

Pennsylvania’s approach has mirrored both states, building enthusiasm on social media and on the PWA website with lists of events and stories that are intended to drive consumers to the wineries. More than half ($544,350) of the latest expenditure was designated for the continuation of a statewide marketing campaign, the expansion of PA Wine Month in 2019, and new regional marketing partnerships in Philadelphia and the Lehigh Valley. Its “Visit PA Wine Land” theme emphasizes to visitors that they’re never more than an hour away from a Pennsylvania winery.

Jake Gruver

This is a state with a nearly $5 billion industry that’s in the top 10 nationally in wineries, wine production, and grapes grown. It’s also celebrating 50 years since the passage of the Farm Winery Act, which created the state’s wine industry. Nothing has affected it more in five decades than Act 39, which has significantly expanded where producers can sell their product and, frankly, given some consumers less reason to visit wineries.

“The wine industry in PA is in a sort of a state of flux,” said Jake Gruver, the PWA president and co-owner of seven-year-old Armstrong Valley Winery outside Harrisburg. Wineries, he said, have to decide whether to move their product into grocery stores and, if so, how that will affect business at the winery.

“Maybe a winery is fine with selling more through grocery stores, but they may have to reduce staff because of less patrons on-site,” he said. “These are new areas for some wineries, and some wrong decisions could be bad. It has thrust wineries, breweries and distilleries into making marketing decisions with no proven long-term outcome. So we are all scrambling to find our place in all this.”

Elaine Pivinski

Elaine Pivinski echoed those sentiments, having opened Franklin Hill Vineyard in Bangor, amid Pennsylvania’s Delaware River Valley, in 1982. For four decades she was “coasting along in a comfortable place” introducing new products, opening secondary locations and building a following. Then came Act 39. “Everything has changed. Your customers can purchase your products for just slightly higher cost in the convenience of a grocery store or PLCB location or in an urban environment.”

Jason Reimer

Jason Reimer

Gruver would like to see some of the state’s funding stream be directed toward educating those in the industry or fledgling winery owners to be able to “step in and continue and improve on the work that’s been done so far.” At the same time, he knows the marketing is essential. “You know what a Ford is, but Ford still markets their cars and trucks all the time, Why? Because they don’t want you to forget, for a minute, who they are and what they have to offer. PA wineries need to do that.”

Leave it to Jason Reimer, a die-hard Philadelphia Eagles fan, to sum up the state of the “underdog” state industry. A former PWA board member and part-owner of The Vineyard and Brewery at Hershey admitted it’s playing catch-up to several nearby states. At the same time, he pointed out, 75 percent of Pennsylvania’s wineries have opened in the last 15 years. Developing a solid marketing strategy “will take time,” he said. “The reality is we are making as good  – if not superior – wines in Pennsylvania. We just need to tell our story.”

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