By Miriam Raftery
January 2, 2018 (San Diego) – A report just released by the San Diego Vintners Association on the economic value of wineries in San Diego County shows that the burgeoning wine making industry is having a potent effect. In 2016, the county’s 116 wineries generated a $30.4 million regional impact and supported 697 jobs here.
San Diego now ranks fifth statewide in total wine licenses (165), behind only Napa, Sonoma, San Luis Obispo and Santa Barbara—surpassing Riverside County, home to Temecula’s well-known wine region. From 2015 to 2016, wine sales grew 88%. Wineries in San Diego County generated nearly $24 million in gross sales in 2016, generating $1.1 million in total sales taxes and nearly $1 million more in property taxes.
The report looked at growth in wineries from 2010 through 2016 to assess impacts of a landmark county winery ordinance passed in 2010 and amended in 2016, which eliminated the need for most wineries to obtain costly major use permits.
From 2010 to 2016, San Diego County’s wine grape crop value has more than quadrupled to $4.2 million, while total acres of wine grapes harvested has more than doubled. In the most recent year studied, sales at local wineries increased 88 percent on average from 2015 to 2016.
Most local wineries are new, taking root in the last three years (though wine growing here dates back to the Spanish friars in the 1760s). Though growing, most remain small, with 57% producing less than 1,000 cases of wine in 2016, 30% producing 1,000 to 2,500 cases, and just 13% producing more than 2,500 cases. By contrast, 62% of Temecula’s wineries produced 5,000 to 49,000 cases, 27% produced 1,000 to 4,900, and only 8% produced less than 1,000 cases.
San Diego County vintners are using over 45 different grape varietals to produce their wines, with an average of more than eight varietals per winery. Most popular grapes grown including these reds: Cabernet Sauvignon, Syrah, Sangiovese, Merlot, Cabernet Franc, Zinfandel, Malbec, and Petite Syrah. Most popular whites locally produced are Viognier and Sauvignon Blanc.
The wine industry has a multiplier effect, creating both direct and indirect jobs. While the outlook of the 37% of wineries that participated in the survey was positive overall, some cited potential impediments to attaining maximum potential.
Asked to name their priority issues, wine growers cited permits/local regulation, followed by labor costs and groundwater/runoff rules.
One area where marketing could boost sales further is tourism. Winery owners who responded to the association’s survey reported that 27% of their sales in 2016 were due to tourism. As far back as 2013, before most local wineries had even opened their doors, the San Diego Tourism Authority’s Visitor Survey Profile found that wine tasting ranked in the top 15 activities among all visitors to the region, after other popular activities such as theme parks, beaches and sightseeing. Increasing marketing to tourists could yield even richer rewards in the future, many in the local wine industry believe.
Wineries are also popular with locals who enjoy tasting or simply appreciate the economic boost the wine industry is having on areas such as Ramona, a hub for wine enthusiasts. A whopping 94% of winery owners surveyed locally said that wine tourism and wineries are appreciated and publicly supported by residents; only 3% believed industry tourism was unwelcome and actively opposed.
That strong support is in contrast to most other wine regions nationally and statewide; for instance, a 2016 survey of annual wine conditions done by Silicon Valley Bank found only 40% of winery owners thought their industry was both appreciated and publicly supported by locals.
San Diego's burgeoning wine business has no doubt benefitted from the earlier boom in craft brewing, which has made San DIego a top market nationally for the craft beer industry and shown the potent economic punch that such activities can ferment in our region.