Benchmark program aims at helping Michigan wineries

Dan Nielsen
Traverse City Record-Eagle

Traverse City — A benchmarking program focused on Michigan wineries and vineyards could help managers hone in on higher profits.

Traverse City-based North Coast Ag Advisors, Farm Credit East and Greenstone Farm Credit Services this month combined forces to launch the Michigan Winery & Vineyard Benchmark Program of Michigan. It is modeled on an existing benchmarking program that serves winemakers in the northeast U.S., according to the Traverse City Record-Eagle.

“The West Coast has long had industry benchmark programs like this. Now is Michigan’s time,” said Jim Casler, president of North Coast Ag Advisors.

“This program helps continue to launch Michigan forward as a world-class wine-producing region.”

Benchmark programs aggregate data from participating businesses so each can compare their costs and expenditures to their competitors. The new program should help each winery see how its labor costs, production efficiency and profitability compare to the state average. It can help business owners determine where they have the most opportunity for improvement.

“Our office must receive at least half a dozen inquiries a year for this kind of information,” said Linda Jones, executive director of the Michigan Grape and Wine Industry Council.

The partners hope to attract at least a 20 percent participation rate across the state.

GreenStone is the sponsoring underwriter of the program. Farm Credit East provides the technology tools for data analysis.

“As the fourth-largest producer of grapes in the nation, it’s time for Michigan winery owners, the investment community and the industry at large to have access to Michigan-specific data to help best understand the industry and help it grow,” said Tyson Lemon, GreenStone vice president of commercial lending.

North Coast Ag Advisors serves as the program’s primary contact for winery and vineyard owners and managers. It will collect and analyze business data, conduct an annual conference and perform one-on-one review sessions with each participating winery and vineyard.

Eligibility for participation is based on the winery’s ability to provide accurate financial and operational information about their business. In order to maintain program participant confidentiality, identifying information is removed from that data. It then is analyzed to determine financial ratios, operating efficiency and other key performance indicators.

“The information in the annual report and the individualized follow-up analysis is not easy for the average winery owner to obtain,” Casler said. “It’s been almost impossible until now. Since most of the 100-plus wineries in Michigan are privately owned, the information just isn’t out there like it would be if they were all public companies.”

North Coast Ag Advisors provides business planning, financial management and succession planning services to family-owned farms and agribusiness companies.

“North Coast Ag will provide strict confidentiality, which is important to winery owners,” said Gregg McConnell, who directs the northeast winery benchmark program for Farm Credit East.

GreenStone Farm Credit Services, based in East Lansing, is the largest agricultural lender in Michigan and northeast Wisconsin.

Farm Credit East extends more than $4.3 billion in loans. It has 19 offices in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, New York and New Jersey.