Journal of the NACAA
ISSN 2158-9429
Volume 2, Issue 1 - September, 2009

Editor:

Demographics of the Northeast Ohio Grape & Wine Industry

Marrison, D.L., Assistant Professor, The Ohio State University

ABSTRACT

The grape and wine industry is a dynamic part of the northeast Ohio's economy with 1,300 acres of vineyards and 20 wineries. In 2007, OSU Extension led a study to examine the demographic data of managers, business structure, visitors, labor, and employee benefits components of the northeast Ohio grape and wine industry. Forty-two total producers (67.7%) responded to the survey. The average age for the principal manager was 55.85 years with 58.5% between the ages of 50-69 years old. Based on respondent data, it is estimated 266 persons work in vineyards and an additional 184 persons in wineries for the northeast Ohio grape industry. Very few employees are offered employee benefits. The grower-only group utilize sole proprietor for their vineyard business structure whereas wineries which operate vineyards were more apt to utilize sole proprietor, limited liability companies or corporations. A variety of business structures are used for wineries with limited liability companies or corporation as the most utilized structures. Based on survey responses, it was estimated 494,000 person visit northeast Ohio winery and vineyard operations each year. This study has provided basic demographic data for the northeast Ohio grape and wine industry. This survey was also expanded to examine the demographics for the entire Ohio grape and wine industry. OSU Extension is also examining ways to help producers to provide more benefits (i.e. health insurance) to their employees.

Introduction

 
The grape and wine industry has been an important part of the northeast Ohio agricultural economy for many years. The northeast Ohio counties of Ashtabula, Lake and Geauga are home to 1,300 acres of grapes and 20 wineries. A 2005 study conducted by OSU Extension started to build base-line data on the number of employees hired by this industry and the desired technical skills desired by employees.1 Upon completion of this study, personnel at Ohio State University Extension were contacted to see if a comprehensive research program could be conducted in order to determine baseline demographics, economic impact of visitors, land use and development concerns, and the economic ripple effect of the northeast Ohio grape and wine industry.
 
In order address these research concerns, three organizations (Ohio State University Extension, Ohio Wine Producers Association, and Lake County Soil & Water Conservation District) collaborated to conduct a series of research projects to address the expressed research needs. This paper examines the demographic data of managers, business structure, visitors, labor, and employee benefits components.
 
Procedures
 
A survey was developed in the spring of 2007 by the research team and pilot tested utilizing input from the Ohio grape industry. Survey respondents were asked a variety of demographic questions about themselves and of their winery and/or vineyard operations. These questions examined the age of principal managers, business structure, year of establishment, and how their operations were acquired. Respondents were also asked to report the number of visitors to their operation, the number of family and non-family members employed, and benefits offered to

employees. This project was reviewed by the Institutional Review Board at The Ohio State University. Survey data were tabulated, statistically reviewed, and summarized by Ohio State University Extension faculty.
Sixty-two vineyard and winery operations were mailed a survey in July, 2007 with a second mailing in October. Twenty of the surveys were sent to winery operations and 42 were mailed to vineyard operations who do not own a winery. These growers are described as grower-only in this summary data. This group is predominantly Concord juice growers with a few producing wine grapes. Forty-two total producers (67.7%) responded to the survey. Sixty-four percent (n=27) of the grower-only group and 75% (n=15) of the winery operations responded. Data were analyzed using the statistical program Statistical Package for the Social Sciences (SPSS).
 
Management & Labor
 
Respondents were asked to list the age of the principal manager or managers of their business (Table 1). As many as four principal managers could be reported. The average age for the principal manager was 55.85 years with 58.5% between the ages of 50-69 years old. Forty-five percent of the respondents reported a second manager, 16.7% a third manager and 14.3% a fourth manager.
 
Table 1. Principal Age of Northeast Ohio Winery and Vineyard Managers
 
 
 
Age
 
Principal
Manager #2
Manager #3
Manager #4
 
 
 
 
Manager
(n=19)
(n=7)
(n=6)
 
 
 
 
(n=42)
 
 
 
Under 30 years old
2.4%
2.4%
4.8%
4.8%
30-39 years old
 
7.3%
9.5%
0%
4.8%
40-49 years old
 
19.5%
4.8%
7.1%
0%
50-59 years old
 
26.8%
16.7%
4.8%
2.4%
60-69 years old
 
31.7%
11.9%
0%
0%
Over 69 years old
 
12.3%
0%
0%
2.4%
Do
not
have
any
---
54.7%
83.3%
85.6%
additional managers
 
 
 
 


Respondents were asked to report the number of family and non-family members working in the vineyard and winery operations. Thirty-one vineyard operations reported 78 family members assisting with their operation. Twenty-eight operations reported hiring an additional 102 non-family members to assist with vineyard work. A total of 180 individuals were reported to assist with vineyard work. It is estimated 266 persons work in the northeast Ohio vineyards. This estimation was calculated utilizing the 67.6% survey response data. This estimation was made based on the assumption the respondent group was reflective of the entire population and that no systematic bias existed.
 
Fourteen of the 15 reporting wineries indicated they have a total of 33 family members assisting with their winery operation. Twelve wineries hire a total of 105 non-family members to assist with the wineries. Total reported family and non-family members working in northeast Ohio wineries is 138 employees. It is estimated 184 persons work in the northeast Ohio wineries. This estimation was based on winery response rate of seventy-five percent.
 
Managers were also asked about the benefits they offer their employees (Table 2). The grower-only group reported offering no benefits to their employees. Over seventy percent of the winery respondents (71.2%) do not provide benefits. However, some wineries are offering benefits with seven percent (7.2%) offering medical insurance, dental insurance, or stock or ownership options. Some of the other benefits offered by seven percent (7.2%) of the winery respondents included lunch, free use of equipment, and free juice.

 
Table 2. Benefits Provided to Employees by Vineyard and Winery Operations
 
Employee Benefits
All
Grower-
Winery
 
Respondents
Only
(n=14)
 
(n=41)
(n= 27)
 
Medical Insurance
2.4%
0%
7.2%
Dental Insurance
2.4%
0%
7.2%
Stock or Ownership Options
2.4%
0%
7.2%
Retirement Plan (401K)
0%
0%
0%
Eye Insurance
0%
0%
0%
Do not provide any benefits
90.4%
100.0%
71.2%
Other
2.4%
0%
7.2%
Business Acquisition & Structure
 
 
Vineyard owners were asked how they acquired their operation. Over thirty-five percent (35.7%) started their vineyard, thirty-eight percent (38.1%) purchased their vineyard, twenty-one percent (21.4%) inherited their vineyard, and five percent (4.8%) do not own a vineyard. Thirty-four percent of the vineyards were started prior to 1960, thirty-one percent (31%) were started from 1960-1980, twenty-percent (20%) from 1990 - 1999, and fourteen percent (14%) were started since 2000.
 
Winery operators were also asked how their winery was acquired. Eighty percent started their winery with the remaining twenty percent (20%) purchasing. Over fifteen percent (15.5%) started their winery prior to 1975, sixteen percent (15.5%) established their winery from 1980 - 1989, twenty-three percent (23%) from 1990 -1999 and forty-six percent (46%) started their winery since the year 2000.
 
Vineyard managers were also asked to report the business structure of their vineyard operation (Table 3). Seventy-one percent were sole proprietor, twelve percent (11.9%) corporation, ten percent (9.5%) limited liability company, and two percent (2.4%) partnership. There was a significant difference (α = 0.01) with regards to business structure between wineries that have vineyard operations and the grower-only group. The grower-only group used sole proprietor as their main business structure (93.6%) whereas wineries (which operate vineyards) were more apt to utilize sole proprietor, limited liability companies or corporations for their business structure.
 
Table 3. Structure of Northeast Ohio Vineyard Operations
 
Business Structure
All Vineyard
Vineyards
Grower-Only
 
Operations
owned by
Vineyards
 
(n=42)
Wineries
(n=27)
 
 
(n=15)
 
Sole Proprietor
71.4%
33.3%
93.6% z
Partnership
2.4%
0%
3.7%
Limited Liability Company
9.5%
26.6%
0
Corporation
11.9%
26.6%
3.7%
Not Applicable
4.8%
13.3%
0%
z Responses significantly different at α = 0.01
 
 

Wineries were asked about their winery business structure (Figure 1). Thirty-three percent (33.0%) use either a limited liability companies or corporations, twenty percent (20%) sole proprietor, seven percent (6.7%) partnership and seven percent (6.7%) responded as not applicable.
 
Figure 1. Business Structure for Northeast Ohio Wineries
 
 
Visitors
 
Respondents were asked to estimate how many people visit their business each year (winery
 
and/or vineyard). Respondents were asked to select the range of visitors per year (Table 4).   A

total of 332,750 visitors were reported by respondents (n=42) with the majority of these visitors
 
reported by winery operations. The grower-only group reported only 6,750 visitors per year. The total number of visitors to northeast Ohio winery and vineyard operations was estimated to
be 494,000 visitors per year. This estimation was made based on the assumption the respondent
 
group was reflective of the entire population and that no systematic bias existed.
 
Table 4. Annual Visitors to Northeast Ohio Wineries & Vineyard Operations
Range of Visitors
Percentage in Each
Visitors to Survey
Total Estimated
 
Visitor Range
Respondents
Visitors to
 
(n=42)
Vineyards &
Northeast Ohio’s
 
 
Wineriesa
Grape & Wine
 
 
 
Industryb
No visitors
26.2%
0
0
1 to 499
35.7%
3,750
6,000
500 to 999
4.8%
1,500
2,000
1,000 to 4,999
9.5%
10,000
15,000
5,000 to 9,999
4.8%
15,000
22,000
10,000 to 24,999
7.1%
52,500
78,000
25,000 to 49,999
0%
0
0
50,000 to 74,999
2.4%
62,500
93,,000
75,000 to 100,000
2.4%
87,500
130,000
Over 100,000
2.4%
100,000
148.000
No response
4.8%
---
---
Total
100%
332,750
494,000
a Calculated by multiplying the number of respondents in each range times the mid point of the range.
b Calculated by extrapolating respondent data to entire survey population using a factor of 1.48 Factor was calculated using survey response percentage. Rounded to nearest thousand people.

 
Summary
 
The northeast Ohio grape and wine industry is an important part of the northeast Ohio agricultural economy. Forty-two total producers (67.7%) responded to a survey examining demographic data of managers, business structure, visitors, labor, and employee benefits. The average age for the principal manager was 55.85 years with 58.5% between the ages of 50-69 years old. Based on respondent data, it is estimated 266 persons work in vineyards and an additional 184 persons in wineries for the northeast Ohio grape industry. Very few employees

are offered employee benefits. The grower-only group utilize sole proprietor for their vineyard business structure whereas wineries which operate vineyards were more apt to utilize sole proprietor, limited liability companies or corporations. A variety of business structures are used for wineries with limited liability companies or corporation as the most utilized structures. Based on survey responses, it was estimated 494,000 person visit northeast Ohio winery and vineyard operations each year.
 
Results
 
This study has provided basic demographic data for the northeast Ohio grape and wine industry. As a result of this study, OSU Extension has shared the survey results with a variety of organizations. This survey was also expanded to examine the demographics for the entire Ohio grape and wine industry. OSU Extension is also examining ways to help producers to provide more benefits (i.e. health insurance) to their employees.
 
 
References
 
1 Marrison, D.L. & Brown, M.V. (July, 2008). Ohio vineyard labor and management survey.
Journal of the National Association of County Agricultural Agents. Article can be retrieved at: http://www.nacaa.com/journal/