{"id":4209,"date":"2011-01-06T21:57:12","date_gmt":"2011-01-07T01:57:12","guid":{"rendered":"http:\/\/www.hagarty-on-wine.com\/OnWineBlog\/?p=4209"},"modified":"2011-02-25T15:21:32","modified_gmt":"2011-02-25T19:21:32","slug":"virginia-wine-trumps-recession","status":"publish","type":"post","link":"http:\/\/www.hagarty-on-wine.com\/OnWineBlog\/virginia-wine-trumps-recession\/","title":{"rendered":"Virginia Wine Trumps Recession"},"content":{"rendered":"

Chairman of Fauquier County Chamber Explains How<\/strong><\/p>\n

The recession is long over. \u00a0Skeptical?\u00a0 It\u2019s understandable.<\/p>\n

But according to the Bureau of Economic Research, the downturn that began in December 2007 ended its nosedive in June 2009.\u00a0 Of course, try explaining that to folks still in danger of losing their homes or unable to land a job.<\/p>\n

Nonetheless, it appears the economy is slowly beginning to right itself.\u00a0 And while the economic landscape is littered with disrupted lives and portfolios, the United States, as well as Fauquier County, is looking forward to ringing in more than just good wishes in 2011.\u00a0 Cash registers would be a nice start.<\/p>\n

With twenty-four wineries in the county, it\u2019s timely to take a beginning of the year assessment of the industry. \u00a0Perhaps no one is better positioned to opine on the subject than the newly elected Chairman of the Fauquier County Chamber of Commerce and managing partner at three county wineries, Chris Pearmund.<\/p>\n

We caught up with Pearmund at his eponymous winery, hovering over his keyboard. He seemed eager to take a break and provide some perspective on an industry he knows well.<\/p>\n

How has Virginia wine fared over the last two years?<\/strong><\/p>\n

\"\"

Chris Pearmund<\/p><\/div>\n

Exceptionally well.\u00a0 I can\u2019t speak for individual wineries but the industry at large has exhibited robust growth during a difficult period. Total wine sales in the state increased almost 13% in 2009 over the previous year.\u00a0 And growth this year will be even greater.\u00a0 The number of wineries continues to increase, with 189 statewide.\u00a0 Back in 2007 there were some 140.\u00a0 This dramatic growth occurred during the worst recession in decades.<\/p>\n

Today, the industry employs over 3,000 people and contributes almost $350 million to the state\u2019s economy, selling close to 450,000 twelve-bottle cases a year.\u00a0 It\u2019s also the fastest growing agricultural segment in the state, generating $1.6 million in taxes for the state\u2019s coffers; Fauquier County receives 20 percent of that revenue.<\/p>\n

We are now the fifth largest wine producing state in the Nation, behind California, Washington, Oregon and New York. Speaking just for my three wineries, the recession has had zero impact.<\/p>\n

Having said all that, running a winery is difficult, time consuming work.\u00a0 Most of us are operating small businesses. So while the industry is doing very well, I\u2019m not implying fortunes are being made.\u00a0 An owner must be proficient in a number of disciplines to make a success of it and struggle to keep liabilities in balance with assets.\u00a0 It\u2019s not a business for the faint-hearted.<\/p>\n

What makes the industry so resilient?<\/strong>
\nI think it\u2019s our customer demographics.\u00a0 Research has shown that people who enjoy wine are middle-aged, prosperous, well-educated and responsible drinkers.\u00a0 Added to that is an emerging wine loving group called Millennials, roughly aged 20 to 30, who are among the fastest growing segment of wine drinkers in the country. \u00a0I think wine fits today\u2019s lifestyle, including the growing interest in locally produced fare and support for a green environment.\u00a0 Taken as a whole these are customers any business would court.\u00a0 Their success as an economic force has propelled our industry forward.<\/p>\n

Any growth areas?<\/strong>
\n\"\"Absolutely.\u00a0 If you\u2019re not evolving, you\u2019re likely fading.\u00a0 Stagnation is not a healthy business condition. \u00a0One of my challenges is to increase weekday sales.\u00a0 Weekends are a busy time at most wineries but if you elect to keep your doors open seven days a week generating customers Monday through Friday can be difficult.\u00a0 I\u2019m working on that opportunity now.<\/p>\n

Like what?<\/strong>
\nWell, I think we are discussing the industry at large not proprietary business plans. I\u2019m sure many full time wineries are focusing on ways to build weekday guest traffic.\u00a0 You can be certain whatever actions I take it will respect my neighbors and the community at large.<\/p>\n

Virginia Wine is perceived by some as too expensive.\u00a0 How do wineries sell pricey wine in a tough economy?<\/strong>
\nWell first off, I take exception to the idea that our wines are overpriced.\u00a0 Virginia wine is a hand-crafted, artisanal product produced from locally grown fruit.\u00a0 We do not operate wine factories selling millions of cases a year.\u00a0 The cost of producing our wine is higher and it\u2019s reflected in our pricing.\u00a0 But the end product is superior.\u00a0 The state\u2019s anticipated double-digit sales figures this year prove that customers are willing to pay for quality.<\/p>\n

\"\"If you look at any wine region in the world, you will find similar situations; small wineries creating excellent wines at fair, but not giveaway prices. The reality is Virginia is equal to, and in many cases better than, most of these niche producers.<\/p>\n

It\u2019s also interesting to note that nationally, wine in the $20-plus category enjoyed a 22% gain in dollar sales this November over the previous month.\u00a0 That surge is expected to continue through December.\u00a0 Even more intriguing, wine club sales from California averaging over $50 per bottle are one the hottest selling wine categories today.\u00a0 Wine lovers everywhere are willing to pay for quality and that\u2019s why Virginia is doing so well.<\/p>\n

Is the growth in the number of wineries sustainable?<\/strong>
\nYes. I don\u2019t think we have reached a saturation point.\u00a0 Less that five per percent of all wine sold in the state is Virginia wine.\u00a0 We can double that volume over the next decade. I do think some marginal producers are hurting the cause of national recognition.\u00a0 We\u2019ve achieved much in the past decade but everyone in the business must strive to further increase quality.\u00a0 We are coming ever closer to a tipping point of national appreciation for producing fine wine. \u00a0New entrants in the industry need to be committed to advancing our cause.\u00a0 And they need to sell beyond just their tasting rooms.<\/p>\n

The\u00a0bottom\u00a0line is new wineries don\u2019t hurt existing ones; a rising tide does float all boats.\u00a0 Visitors from both the DC metro area and out of state continue to swell tasting rooms around the state.\u00a0 I think the continued growth of quality-focused wineries will help all of us.<\/p>\n

Would you consider ever selling any of your wineries?<\/strong>
\n<\/strong> <\/strong> I would and I am.\u00a0 The Winery at La Grange is currently on the market. But you might ask, if I\u2019m so pumped about Virginia wine why would I consider selling?\u00a0 First, I think most owners of a business would be willing to sell at the right price.\u00a0 But for me other considerations also come into play.\u00a0 I\u2019m not getting any younger.\u00a0 I have been in the wine business for over twenty years and it\u2019s physically and emotionally demanding work.\u00a0 I\u2019m beginning to think about my retirement, even though it\u2019s years away. Everyone should carefully plan for their golden years but, truthfully, I haven\u2019t. \u00a0Now\u2019s the time to start.<\/p>\n

If I did sell my businesses, I would prefer staying on in some capacity.\u00a0 I love the world of Virginia wine and have considerable knowledge I can pass on to the next generation of owners.\u00a0 Consulting would be considerably less demanding than being a full time proprietor.<\/p>\n

\"\"<\/p>\n","protected":false},"excerpt":{"rendered":"

Chairman of Fauquier County Chamber Explains How The recession is long over. \u00a0Skeptical?\u00a0 It\u2019s understandable. But according to the Bureau of Economic Research, the downturn that began in December 2007 ended its nosedive in June 2009.\u00a0 Of course, try explaining that to folks still in danger of losing their homes or unable to land a […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[118,106,134,250,251,242,249,248,123],"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\t\n