Frosty Minnesota's Wine Industry Faces Challenges

Minnesota's wine industry faces challenges to keep growing now that the novelty of wine produced in such a frosty climate is wearing off, a new study says.

The North Star State's wine industry contributed $59 million to the state's economy and supported 3,250 employees in 2011 alone, according to a University of Minnesota Extension study released Wednesday. And that's for an industry that barely existed before the introduction of cold-hardy grapes in the late 1990s.

Sustaining that growth will require savvy marketing, said Brigid Tuck, the lead researcher. Almost 63 percent of made-in-Minnesota wine is purchased at wineries and their tasting rooms, and most host special events such as weddings to bring in additional business. Purchases at liquor stores account for less than 16 percent of sales.

Minnesota's wineries have been relying on customers to come to them, Tuck said. But most of these wineries are located in rural areas, so one challenge will be how to get customers to go back to their liquor stores and distributors and buy a Minnesota brand of wine when they have other choices, she said.

While on-site sales are likely to remain the mainstay of the business, she added, there are opportunities for capitalizing on that too. There's room for more collaboration to boost agritourism, by further promoting wine trails, and by working with local tourism offices and with local restaurants that could promote local wines, she said.

The study is based on survey responses from 101 vineyards and 34 wineries in Minnesota. It found that nearly half of Minnesota's vineyards have been established in the last five years. Since it takes vines three to four years to mature, grapes from many of them have only recently come on the market.

A major driver of the Minnesota wine industry's growth has been the acclaimed Marquette red wine grape, which was developed at the University of Minnesota and has raised expectations for what cold-climate vintners can achieve.

"What's really amazing is that the Marquette grape wasn't released until 2006 and now over half of the plantings are of that variety," Tuck said. "It's really been a success for the U of M."

The report is based on the Minnesota data from a survey of grape growers and wineries in 13 cold-climate states across the country as part of the federally funded Northern Grapes Project. A similar report on the economic impact of Michigan wine industry is nearly ready for release while another on New York state is still being reviewed, and reports on the other states will follow eventually, she said.

Terri Savaryn, who runs the Sovereign Estate Vineyard and Winery west of Minneapolis near Waconia, agreed that marketing is the key to sustaining the industry's growth. Her family's winery works to capitalize on its good microclimate on the north shore of Lake Waconia, she said, and its lakefront location, which makes the estate popular for special events.

Savaryn, who's on the marketing committee of the Minnesota Grape Growers Association, held up the group's special "Passport to Minnesota Wines" as an example of how the state's winemakers can work together to grow the business. For $25 buyers get 10 tastings they can enjoy at any of 30 participating winery whenever they happen to pass by, which she said makes the deal more flexible than a conventional wine trail.

The association also plans additional efforts to raise public awareness about Minnesota's wineries, she said, including a billboard campaign and seeking state help for putting up road signs with directions to help motorists find wineries off the beaten path.

Winning over consumers by investing in quality is another key to the future, Savaryn said.

"As the wines improve, that's the best thing that can happen for Minnesota," she said.