Tuesday, January 25, 2011

ANNOUNCING THE NEW YORK WINE COUNCIL "WHITE PAPER"

YESTERDAY, I went to Albany today to sound out about a dozen or so Assemblymen and Senators, as well as with Governor Cuomo's staff, to discuss spending more money on New York wine instead of less.

I did this as a furtherance of my essay "It's Time We Had a Conversation" to discuss why the legislature couldn't give New York wineries more money. My argument was the same as it was in that essay - the NY state wine industry, under Jim Trezise's tutelage, grew tremendously. But the NY wine industry is still grossly under supported, especially in the face of such well armed competitors as Italy, France, Spain, Chile, New Zealand, Australia, and such states as Washington, Orgeon, and Virginia.

In fact, it was the Virginia model I used specifically, to ask for additional funds - suggesting that the money come from something like I Love New York to establish a New York Wine Council to augment the NYWGF. We praised the NYWGF. I suggested that the NYWGF was under funded, and that they recieve additional funds, but that a new entity, who's sole charge was to brand New York Wine, be established to promote New York Wine. I suggested it it should be a separate entity, but that Jim Trezise should very much be involved in it, and that there should be cross synergy between it and the NYWGF. Not one person I met with yesterday thought the idea was a bad one, but admittedly, fiscal concerns this year especially, make this a tough discussion.

It is only a plan, a suggestion, a beginning. I am not sure in these tough economic times it is feasible. But New York wine, as it has grown and mtured, now remains an "an undeveloped oyster," a great econmoic engine, in New York's arsenal. It is time to begin that conversation.

I am sure the idea will morph and change as the conversation widens, but we thought if we didn't push, then nothing would happen.

I don't know much about politics; the arena makes me uncomfortable. But I hoped more voices might help force a bigger conversation, and help get the support our industry needs to move forward in a competitive way.


To that end, the following wineries support this "white paper."
Amici Vineyards
Arrowhead Spring Vineyards
Benmarl Winery
Black Willow Winery
Brookview Station Winery
Brotherhood Winery
Eagle Crest Vineyards
Eveningside Vineyards
Hermann J. Wiemer Vineyards
Hudson-Chatham Winery
Palaia Vineyards
Shaw Vineyards
Victorianbourg Wine Estate
Whitecliff Vineyard
The Winery at Marjim Manor

IF YOU WOULD LIKE TO SUPPORT THIS WHITE PAPER AND ADD YOUR NAME TO THIS LIST PLEASE EMAIL ME AT hudsonriverwine@yahoo.com

With all sincereity and good intentions,

Carlo DeVito, Hudson-Chatham Winery









LETTER TO GOV. CUOMO

Governor Andrew M. Cuomo
State Capitol
Albany, New York
12224

January 24, 2011

Dear Governor Cuomo,

As you know, the New York wine industry is responsible for more than 30,000 jobs in New York State and accounts for more than $3.5 billion annually to the state from wine sales and wine tourism. For the better part of 20 years, the industry has managed to achieve this remarkable success with little significant support from State government, especially compared to other states.

I recognize, and applaud, the support the State has provided the New York Wine & Grape Foundation. We believe this organization can and should continue to play an important role in guiding new start-up wineries, and providing leadership on the important agricultural issues vineyards face. But we believe the time has come for a new entity, the New York Wine Council, to lead a State-supported promotional effort to support New York wines.

New Yorkers clearly enjoy their wine – New York ranks 2nd among states for wine consumption -- but too often they select wines from out of state or from other countries. When you consider that States like California, Oregon, Washington, and even Virginia, spend millions to promote their wines, it’s no surprise. Yet, New York winemakers are producing award-winning wines that can compete with any in the world. Unfortunately, New Yorkers simply don’t know it.

A powerful promotional campaign can help drive more New Yorkers to select New York wines, which in turn will drive more jobs and revenues for our State. If we can increase consumer demand for New York wines, we can set off a chain reaction that will lift the entire industry. That’s why we hope you will include our proposal for a dedicated, sustained promotional campaign in your Executive Budget.

At a time when locally produced products are gaining traction with New Yorkers, we believe common sense and good economic policy demand an investment in this job-creating industry. Thank you in advance for helping our businesses take the next step toward creating more jobs for New Yorkers.

Sincerely,

Carlo DeVito, Hudson-Chatham Winery











"THE WHITE PAPER"
Support for a
New York State Wines Initiative


Business groups and wineries in New York have been working together to create an opportunity for the State to generate sales tax revenue along with the potential of new jobs within the wine industry. To accomplish this, we are seeking funding for the creation of a New York Wine Council, to be housed under the I Love New York tourism promotion.

This Council would have sole responsibility of creating brand recognition for New York wines and would consist of an Executive Director, an assistant and a Board comprised of two retailers, two restaurateurs, four representatives from wineries, and the Director of the NYWGF. They would receive no compensation other than reimbursement for expenses. The Council would work independently from the NYS Wine and Grape Foundation, who does a great job promoting agriculture and grape growing. The NY Wine Council would be charged with branding New York wines in New York City – an area that has yet to be properly developed.

The Council would promote New York wines in concert with the tourism industry, wineries, retailers and restaurants. For every dollar spent on branding, the State would benefit from tourism, giving each dollar a double impact on New York’s economy. New York can model other states, like Virgina, that have successfully marketed and branded wines, which boosts sales, brings in revenues to the State and enhances production and sale of its own state resources.

New York State is number two in the country in wine consumption and the third largest producer of wine in the United States — behind only California and Washington— but falls far short of other states in supporting this important industry. The state provided just over $700,000 for the Wine and Grape Foundation and only $34,000 for marketing in the 2010 budget.

California on the other hand spent more than $1.5 million on print campaigns alone and another $4.1 million on TV advertising. Even Virginia, which ranks fourth in wine production, outspends New York to promote its homegrown wines $4.5 to $1, though their industry is less than one-third the size. This also does not include the other world wide producers of wine that spend million of dollars promoting their wines in the New York market – countries like Italy, France, Spain, Australia, New Zealand, etc. What New York needs is a strong backing and the funding to create a promotional campaign to educate New Yorkers as to the quality and benefits of supporting New York’s wineries. Currently the wine industry is lacking the necessary resources to make this happen.

For years, the wine industry has been the fastest growing part of New York's two largest economic sectors of agriculture and tourism. New wineries are sprouting around the state, investments are growing and visits by tourists and wine lovers have increased by 21 percent since 2003, despite the recession, and record gasoline prices. The Finger Lakes region, with 104 wineries, has the largest share of wineries. Long Island, the Hudson Valley and the Lake Erie region are considered the other centers of the industry. More wineries have opened around the state since 2000 than in the previous 170 years, according to a New York Wine and Grape Foundation survey. And the expansion is unabated.

The New York grape, grape juice, and wine industries contributed over $3.76 billion in economic benefits to the economy of New York State in 2008, according to a study conducted by the Napa Valley-based Stonebridge Research Group LLC. This is an increase of over 10% from the $3.4 billion documented in an identical 2004 study. The new study also shows that out-of-state wines sold in New York contributed an additional $3.26 billion, for a total economic benefit to the State of $7.02 billion from the grape and wine industries.

Relevant highlights of the study include:

· $508 million New York winery sales (vs. $420 million)
· $376.5 million in wine-related tourism expenditures (vs. $312 million)
· 4.98 million wine related tourists (vs. 4.14 million)
· $455 million in State and local taxes paid (vs. $427 million) including $230 million from the New York sector and $225 million from out of state wines
· Charitable contributions $8.6 million

The Stonebridge Research study is complemented by another study released in October which shows industry growth over the past 25 years since the Foundation was created. The long-term study, conducted by New York Agricultural Statistics Service (NASS), measured growth in areas such as the number of wineries, total production, tourism, and similar indices.

Among the highlights of the NASS study:

· The number of new wineries in the 2000 decade exceeded the total created in the previous 170 years, with many in nontraditional regions of the state.
· Tourist visits to New York wineries in 2008 approached 5 million, up 21% from 2003, despite record high gas prices and a recession.
· Of 169 responding wineries, 124 made investments during 2006-2008 averaging nearly $400,000.
· Commercial wineries paid an average of $1,788,300 in federal and state taxes (excise and sales), with farm wineries averaging $34,600.

These numbers clearly show positive benefits from the wine industry in many areas of the economy. The growth of the industry is due largely to a productive partnership between the public and private sectors in concert with the recognition by New York's public officials on the state and federal levels that the wine industry plays a vital role in agriculture, tourism, and manufacturing. Enlightened public policy along with much-needed financial support will tremendously help expand our economic contribution.

One need only compare data from other states to see how much the New York State wine industry is underfunded:

Virginia
Wineries: 135
Total budget: $4.5 million ($1.5 from agriculture / $3 from tourism)
WAS INCREASED THIS YEAR BY LEGISLATURE AS A GROWING STATE BUSINESS

Ohio
Wineries: 125
Total budget: $1 million
WAS INCREASED THIS YEAR BY LEGISLATURE AS A GROWING STATE BUSINESS

New York
Wineries: 273
Total budget: $750,000
THREE STRAIGHT YEARS OF UNDERFUNDING IN THE FACE OF SOLID INDUSTRY GROWTH


NEW YORK WINE IS WORTH INVESTING IN BECAUSE:
· It draws tourism to the many wine regions – Erie, Finger Lakes, Hudson Valley, Long Island and Niagara
· Bring’s Out of State Dollars into NY economy - It draws into New York out-of-state tourists from Ohio, Pennsylvania, New Jersey, Connecticut, and Massachusetts consistently
· More Taxable Revenues -The tourists buy wine at the wineries, where the state makes a double gain on sales – through excise taxes and retail sales taxes
· Extra sales - Tourists also spend money on lodging, food, miscellaneous
· More job - As wineries grow, they hire more people
THE COMPETITION

There are numerous competing wine trade commissions in New York City:
Washington Wine Commission
Oregon Wine Commissions, c
Bodegas de Argentina
Australian Wine Bureau
Chilean Government Trade Office
China Wines Information
French Wine Associations
Bordeaux Wine Bureau
Burgundy Wine Association
Champagne Association
German Wine Information Bureau
Italian Trade Commission - Wine & Food Center
Italian Wine & Food Institute
Mexican Wines (Vino Mex)
New Zealand Trade Development Board
Portuguese Trade Commission
South African Wine
Wines from Spain
Vibrant Rioja

All of these organizations either have offices in or are represented by public relations firms that have offices in New York City. These organizations are concerned with branding their product. To do that they host dinners, they host regional tastings (that court media, sommeliers, wine store owners), court the media, and help promote their region’s wine in this market, as well as in the rest of the country. The Italians even have two offices – one in New York City, the other in Los Angeles.

New York City is a target rich environment, with the major wine and food magazines being located there, as well as major newspapers such as the NY Times, the Wall Street Journal, and several major retailers including Astor Wines, Sherry-Lehmann, Morrel’s, Zachy’s and others that other smaller stores look to for leadership. Also, New York City has the largest concentration of leading restaurants on the east coast. Wine store-owners, sommeliers, restaurant owners, caterers, and chefs attend tastings and dinners to find new wines to sell and pair with their foods.

New York Wine on the other hand has no representation in New York City.
New York Wine has no branding arm that engages the media in New York City on a consistent basis.
New York Wine hosts no tastings for the media or liquor stores or restaurants in New York City.
New York Wine is not a part of the I Love New York campaign.

What we need is a presence in New York City to compete. We need it to be a part of I Love New York because instead of fragmenting the message between the regions, it would offer one, easy to deliver message – I LOVE NEW YORK WINE
I LOVE NEW YORK WINE MARKETING PLAN

We need a multi-layered approach. We need to appeal to writers, press, an internet, appeal to retailers, and appeal direct to consumers.


1. Appeal to writers, press, and internet:
Professional Tastings for Stores and Restaurant Owners and Press
Winemaker/press dinners 3 per year in NYC, 1 in Albany, 1 in Buffalo
Give tours to wine writers of different wine countries
Host wine bloggers conference

2. Appeal to retailers:
Seasonal Programs That Appeal to Retailers with Coordinated Advertising and Publicity
April (pre-sales in Mar)
November (pre-sales Oct)
5 point discount for five cases or more per winery…promotion includes
mandatory 5 New York specific in-store tasting events per promotion
Professional Tastings for Stores and Restaurant Owners and Press
2 in NYC – spring (Mar) and (Oct)
1 Albany (Oct)
1 Buffalo (Oct)
1 Westchester (Oct)

3. Appeal direct to consumers
New website – more dynamic – like Maryland’s or Virginia’s
Sponsor Tasting Classes at New School, Learning Annex, etc.
More signage on roads and highways to increase tourism
In Virginia, First Lady has adopted wine industry as her cause…Ms Lee would be perfect
Advertising – print and internet
Press
Wine Festivals

4. Educate/Entice Wineries
extra - 3 point discount for five cases or more per winery (participating wineries would get some tax rebate from the state)
Provide Marketing Materials
bottle tags, shelf talkers, table toppers or posters, that help them
push their brand and the state’s message. Also provide templates
to fill out that work, that carry the state’s wine logo.
Provide Sales and Marketing Template complete with pricing and discounts,
and production margins to make them more profitable

5. Establish New I LOVE NEW YORK WINE Branding in NYC Office
Establish state employees separate from NYWGF OR hire an agency to run a I LOVE NEW YORK WINE Branding Campaign, that would be in the NYC area to cater to wine writers, magazines, bloggers, host wine dinners, etc.


6. Identify Market Outside NY State
Target Other Cities to create new markets for NY wines outside the state’s borders…chose targets close to home base to hopefully increase product awareness and help induce tourism
o Boston, MA
o Springfield, MA
o Montpelier, VT
o Hartford, CT
o Trenton, NJ
o Portland, ME
o Philadelphia, PA o Nashua, NH