Wine Cluster Study and
Implications for Planning
EMSI Conference
September 11, 2012
Steven VanAusdle, President
Walla Walla Community College
Welcome to
Walla Walla
The Challenges of our Time
Balancing Security,
Prosperity, and the Environment
Safety and
Security
Economic
Competitiveness
Environmental
Sustainability
Jobs, Wages, and
Standard of Living
A Strategy for
Economic
Competitiveness
Productivity*
Innovation and
Entrepreneurship
Talent
Investment
Infrastructure
*Improving Productivity will require more innovative uses of existing resources.
Regional Strategy
For Economic Development
Investment &
Entrepreneurship
Talent
• STEM programs
• High-demand programs
• Establish high school skills center
• Use instructional technology for
access and efficiency
• Economic studies
• Increase access to expertise and capital
• Strengthen capabilities of
manufacturing
• Provide small business incentives
• Ensure regulations are not barriers
• Promote entrepreneurship
Infrastructure
• Information Technology
• Energy Technology
• Water Technology
• Waste Management Technology
• Transportation Technology
WWCC Center for Enology & Viticulture
2006 Governor’s Workforce and Economic
Development Best Practice Award
Our Vision: Wine / Food / Art
WWCC Enology Students
Learning While Creating College Cellars Wine
Wine Country Culinary Institute
With a Focus on Pairing Food and Wine
Port of Walla Walla
Wine Incubators
Vinea: Sustainable Wine Farming
The Cluster-Based Approach
to Economic Development
WWCC was awarded an $82,000 grant, plus a $25,000
match, to:
• Define and describe the nature of the region’s
functional economy;
• Describe the nature of the wine industry cluster;
• Develop a shared vision;
• Determine the influence of the wine industry cluster;
• Develop a strategic plan for the wine industry cluster;
• Maintain a wine industry cluster web site.
Walla Walla Area
Functional Economy
WALLA
WALLA
COUNTY
COLUMBIA
COUNTY
WASHINGTON
OREGON
UMATILLA COUNTY
WALLA WALLA AREA FUNCTIONAL ECONOMY
Westernmost edge of Walla Walla County
(includes Columbia County, most of Walla Walla County, and part of Umatilla County)
Umatilla County, Oregon
Net Migration, Walla Walla County
2000
1500
1000
2000-2005
500
0
-500
1995-2000
-1000
-1500
Sources: U.S. Census 2000 (Residence 5 years ago), U.S. Census
Annual County Population Estimates
Without Wine Cluster
With Wine Cluster
Total Regional Jobs
45000
40000
35000
30000
25000
20
20
20
20
19
19
19
19
19
17
12
07
02
97
92
87
82
77
The Economic Impact of
Walla Walla Valley Wine
Total current jobs in wine production and
tourism
Growth rate of jobs related directly to wine,
1997 – 2007
Total earnings generated by wine-related jobs
Additional jobs created by economic multiplier
effects
Total regional earnings due to wine-related
industries and multiplier effects
Total jobs projected to be dependent on winerelated industries in 2017
1,094
1,052%
$96 million
937
$59.3 million
3,975
Proposed Initiatives
•
•
•
•
•
Marketing (6)
Education and Workforce (8)
Infrastructure (8)
Amenities (3)
Policy (8)
Creating the Walla Walla Innovation Partnership Zone (IPZ) Ecosystem
Collaborators
K-12
University
Center
County
Skills
Center
Water Center
Watershed
Restoration
Sustainability
Confederated
Mission
Tribes
Workforce
Development
Foster a Healthy Economy
and a Healthy Environment
Business
Development
Port
Water
Efficiency
Vision
Excellence
City
Water
Quality
Values
Career
Pathways
Collaboration
WWCC
Dept. of
Ecology
Initiatives
Walla Walla
Watershed
Partnership
Salmon
Recovery
Board
Renewable
Partnerships
Integrity
Infrastructure
Chambers of
Commerce
Economic, Environmental,
and Cultural Sustainability
Innovation
Rural Center for
Entrepreneurship
Downtown
Foundation
Diversity
Energy
Wallowa
Resources
Energy
Efficiency
Utilities
Entrepreneurship
Wine & Hospitality
Cluster
Tourism
Walla Walla
Learning
Art
Alliance
Wine
Alliance
Sustainable
Living Center
Enology &
Viticulture
Center
Industry Cluster:
Groups of similar or related industries that
are geographically concentrated and may
achieve collective efficiencies and increasing
returns to scale through transactions, shared
labor pools, infrastructure, knowledge and
technology spillovers, and other
complementarities.
Questions






How has this regional economy changed over the
past five years?
How has the wine cluster changed over the last five
years?
What are the effects of the economic downturn on
the region and the wine cluster?
How do indicators of economic progress compare in
2011 with the 2006 benchmarks?
What are the priority initiatives for growing the
regional economy and what central role can the IPZ
continue to play?
What are other potential clusters the IPZ can
promote?
Walla Walla Valley Wine Cluster Study
Grape Stock
Washington State Legislature,
Wine Commission, Wine Institute, and
Walla Walla Valley Wine Alliance
Winemaking
Equipment
Fertilizer, Pesticide,
& Herbicide Vendors
Barrel Accessories
Grape Harvesting
Equipment Vendors
Irrigation Technology
Manufacturers
Growers/
Vineyards
Wineries/
Processing
Facilities
Bottle Etching
Caps and Corks
Suppliers
Compostea
INFRASTRUCTURE
Worm Farming
Educational, Research, and Trade Organizations
(e.g., WWCC Enology & Viticulture Center
& Culinary Arts Program, WSU)
Washington
Agricultural Cluster
Public Relations
& Advertising
Art Cluster
Culinary Cluster
Based on Michael Porter’s format
for describing industry-based clusters
Tourism Cluster
Projected IPZ Employment
With and Without the Wine Cluster
45000
40000
35000
30000
25000
With
Without
The Walla Walla IPZ Wine Cluster
Percentage Growth in Overall Employment
2006 to 2011
United States
Washington State
IPZ
- 1.5%
1.1%
11.3%
Walla Walla Regional Wine Economy, 2011
Direct jobs in wine production and wine tourism
Direct wine cluster employment growth, since 2001
Total earnings generated by the wine cluster
Wine cluster jobs, including multiplier effects
Total regional earnings
Total jobs projected to be dependent on the wine
cluster in 2017
Percent of all jobs dependent on wine cluster
Projected percent of all jobs dependent on wine cluster in 2020
Regional economic growth since 2007
Regional economic growth since 2007, absent the wine cluster
2,061
76%
$96 million
6,003
$230 million
8,913
14.4%
19.8%
9%
2%
Wine Cluster Research Summary
• Growth in the wine industry occurs in tandem with
wine tourism.
• The wine cluster’s share of the regional economy is
increasing: a multiplier effect of 3 and location
quotient of 50.7.
• Wine cluster diversifies the region’s industrial mix
and contributes to its resilience, dampening the
effects of economic recession.
Cluster Research Informs
Planning Decisions
• Align Workforce Education programs with
regional economy
• Adjust the scale and scope of existing programs
• Create new programs
• Identify industry needs
• Identify and target potential high wage/high
growth sectors
• Identify public policy needs
NationalJournal
How Wine Growing in Walla Walla
Supports the Economy
By Catherine Hollander
June 1, 2012
“America’s economy today feels as sleepy as Walla Walla’s
two decades ago. Middle-class workers were slammed by the
financial crisis, their jobs disappearing, wages stagnating, and
future uncertain. To put them back to work, the nation would
do well to consider Walla Walla, which seems to have cracked
the code on how to get mid-skill workers back into the labor
force while revitalizing an economy.
If the country needs a model, this could be it.”
WALLA WALLA
Union~Bulletin
Wednesday, May 30, 2012
College Cellars wines
win regional acclaim
Eight wines from the local teaching winery
took home honors from recent judgings
WALLA WALLA – Student-made wine
brought home nearly a case full of hardware at
the recent Seattle Wine Awards and Northwest
Wine Summit.
In the Seattle Wine Awards, College
Cellars won three double gold medals for its
2011 Ice Wine, 2009 Syrah and 2008 Malbec.
Silver medals were awarded for the 2011
Sauvignon Blanc and 2010 President’s Blend,
along with a bronze medal for the 2010
Scholarship Red.
The college’s 2011 Chardonnay won gold
and its 2011 Semillon won bronze in the
Northwest Wine Summit awards, which
covers Alaska, Alberta, British Columbia,
Idaho, Montana, Oregon, and Washington.
The 7th Annual Seattle Wine Awards is
Washington State’s largest and most
comprehensive independent wine
recognition program. On April 21 & 22,
local and national wine professionals
gathered to taste and evaluate 982
Washington wines in a single-blind format
(meaning grape variety or style is known,
but not price or producer) and awarded the
top wines by consensus with Double Gold,
Gold, Silver and Bronze Grand Awards of
Excellence.
Water & Environmental Center
2010 Governor’s Workforce and Economic
Development Best Practice Award
Water & Environmental Center
Jobs Created and Enhanced
• 90 construction jobs
• 27 additional jobs created associated with
Center Expansion
• At least 250 direct and indirect jobs created,
according to Earth Economics
• 129 graduates in 9 years with $414,336
increased lifetime earnings for each graduate
Economic Impact of Establishing 1,000 Acres
Of Vineyard Production in the Walla Walla Valley
Employment, Earnings, and Sales
Vineyard Operations
Time New
Period Acres
Year 3
200
Year 6
500
Year 9
1,000
New
FullTime
Jobs
Total
Combined
Earnings
Gross
Sales
Winery Operations
New
FullTime
Jobs
Total
Combined
Earnings
Gross
Sales
120
$4,392,000
$8,750,000
200 $6,000,000 $60,000,000
Indirect
48
$2,898,720
$2,800,000
80 $3,960,000 $19,200,000
Total
168
$7,290,720 $11,550,000
280 $9,960,000 $79,200,000
Can We Create An Energy Cluster in
Southeastern Washington?
Wine is Prosperity in a Bottle