Wineries worry state support will be watered down
For more than two decades, commercial wine grape grower Dan Nitz has dreamed of opening his own winery on his family’s sprawling vineyards in the gentle hills east of the Lake Michigan shoreline.
Nitz envisions his Chill Hill winery as just that — a place to chill, sip wine and soak in pastoral views of vineyards, woods and the sand dunes of southwest Michigan.
But his long-fermenting dream hit a snag when he tried to secure a small winemakers' license for a tasting room in nearby Baroda. Unsure what to do, he turned to the Michigan Grape and Wine Industry Council, an 11-member panel formed by the Legislature more than three decades ago to promote the state’s wine and wine-grape growing industries.
“They’ve been a big help to us,” said Nitz, whose family first planted wine grapes in 1971 and sells to wineries in Michigan and across the country. “We’ve asked tons of questions. From the start, (the council) said call us if you have any questions — we can help you.”
As instrumental as the council has been for aspiring winemakers like Nitz, its role is about to change — dramatically. The council is being reconfigured to become the Michigan Craft Beverage Council, charged with a broader role of also supporting the craft beer, spirits and hard cider industries.
With no additional funding planned for the revamped council, some are concerned that wine promotion will fall by the wayside. In jeopardy are popular marketing tools the council has used to expand Michigan’s footprint on the world wine map: the annual Michigan Wine Competition, which wrapped up Tuesday, an annual Michigan Wine Conference and a popular Michigan Wine Country magazine.
“The council has been a very important cog in the success of the wine industry in Michigan,” said Joe Borrello, president and CEO of the Tasters Guild and a judge in the annual wine competition.
“Something like the wine competition gives credence that Michigan can make good wines and brings judges in from all over the country. Wine events bring people in from all over and exposes them to Michigan wines. To lose a marketing arm of that nature is very difficult. It’s a big loss to the industry.”
Since the wine council was formed in 1985, the number of Michigan wineries has grown from 14 to about 145 today. A study released by the council last fall showed the wine industry has a $5.4 billion annual economic on the state — a figure that includes its impact on wholesalers, retailers, restaurants and bars, and tourism spending.
Michigan wineries bottle about 2.7 million gallons of wine a year, making the state fifth in wine production in the U.S. About 1.7 million people visit the state’s wineries each year, contributing more than $252 million in tourism spending.
“We have certainly benefited the past three decades because of the council’s work,” said Marie-Chantal Dalese, president and CEO of Chateau Chantal winery on Old Mission Peninsula outside Traverse City.
“It was relatively critical during the infancy of our industry. Having that outside marketing expertise, that outside agricultural expertise was very important to the foundation of our industry and helping spread the word about Michigan as a quality wine-producing region.”
The changes have not been unexpected. The craft beer and spirits industries have been pushing for inclusion for years; both contribute to the council’s funding mechanism through non-retail, non-wholesale liquor license fees (which include winery, brewery and distillery licenses; the bulk of the revenue comes from outstate sellers of beer and wine).
Legislation signed by Gov. Rick Snyder in June changes the board to include two winemakers, a winemaker who primarily produces cider, a restaurant representative, a retail representative, a small distiller, a distiller who manufactures more than 60,000 gallons of spirits a year, a large brewer and a microbrewer or brew pub license-holder. The governor is expected to make the appointments by October.
Sen. John Proos, a St. Joseph Republican who was a co-sponsor of the legislation, said it was time to include craft brewers and distillers on the council and assist their growing industries with agricultural research and promotion. They’re all driving growth in tourism, farming and entrepreneurship across the state, he said.
“I recognize the growth of the wine industry, but we’ve also seen an explosion in craft beer and craft distillers, especially in southwestern Michigan,” said Proos, noting many wineries also make beer, hard cider and spirits. “There is room for all of them to keep growing — a rising tide lifts all boats. This only makes sense … it makes for one fantastical growth industry.”
The new council will remain under the auspices of the Michigan Department of Agriculture and Rural Development. About half of its $580,000 annual budget will be earmarked for research grants to support the respective industries, including wine grapes, winemaking, beer and spirits, hops, barley and apples. The remainder will cover administrative expenses, and salaries and benefits. There will be little left for marketing and promotion.
There are no plans, at this time, to increase the council’s budget or add staff, which has already been reduced from three full-time employees, including an executive director, to just the director and a half-time program assistant.
“I think the real challenge is funding,” said Scott Graham, executive director of the Michigan Brewers Guild. “We need to take a look at the funding and see how we can improve that. The council is spreading its interest in more areas without more funding.”
Still, joining the council is a win-win for the state’s burgeoning craft brewing industry, which has also seen exponential growth in the last three decades, skyrocketing from a handful to more than 300 breweries, microbreweries and brewpubs today. It also has a big economic impact on the state — estimated at $600 million in a 2014 study — and plays a big role in tourism, drawing thousands to such beer towns as Grand Rapids, Kalamazoo and Traverse City.
“This (change) is not to take anything away from the wine industry,” Graham said. “But the beer industry is thriving, and we’re seeing a lot of Michigan agricultural products go into beer. We can use the support in research. We have things to learn with new crops, how to manage pests and disease, the production and sale of crops. It makes sense.”
Like the wine industry, there’s room for growth, Graham said. Michigan-made beer accounts for about 10 percent of all beer sales in the state, and the industry has an eye on doubling that. The council can help fuel that growth with help on research and other programs.
“I think in many ways this is a sign of the times,” said Lee Lutes, head winemaker at Black Star Farms near Traverse City. “The craft beverage industry in the state is evolving, and our hope is that the (new) council will bring greater recognition of the diversity of products.
“I think in any situation like this, we’re going to go through some growing pains. But I think in the long run it’s going to be good for the industry and good for the agricultural elements that support it.”
While uncertainty looms about the future of the Michigan Wine Competition and other events, at least one organization is looking to fill the void.
Formed two years ago, the Michigan Wine Collaborative sees itself as the emerging voice of the industry and is mulling taking over the annual wine competition and other marketing efforts once handled by the council. The collaborative has more than 100 members, composed mostly of wineries and people who work in the industry.
Dave Miller, president of the collaborative and owner of White Pine Winery in St. Joseph, said the organization is researching the possibility of imposing a self-assessment on wine grape growers — like other Michigan commodity groups do — to generate money for research and promotional efforts, like the wine competition.
“There is uncertainty right now,” Miller said. “It’s all a little vague about what’s going to happen. At least we’re in a position to speak for the industry, to raise the flag for the industry and let our voice be heard.”
For Nitz, the hope is to open his Baroda tasting room in the fall, in time for the flocks of tourists from all over the Midwest who come to enjoy harvest activities, colorful foliage and ripening grapes.
His long-range plan is to have a winery and tasting room open on the family’s nearly 400 acres near Berrien Springs in about five years, with a goal of ultimately producing 20,000 cases of a wine a year.
“My goal is to hit that number, but it’s going to be a long journey. Down the road, I’d like to get into beer and hard cider but keep things simple,” said Nitz, whose daughter, Ashley, will be helping the family-run operations. “Until you open the doors and cut the yellow ribbon, it’s no easy task. I hope there will be someone there to help other guys looking to open their own wineries.”
Greg Tasker is a Michigan-based freelance writer.