WineAmerica

Analyzing the soul of wine and its maker
Members are spreading the word through the grapevine and have discovered that they have more strength in numbers when it comes to addressing its most pressing issues. And it seems to be working. ABJ editor Antonia McGuire sniffs around to find out why.

Among the vast green fields in Fingers Lake are some of New York State’s finest wineries. Intertwined among these grapevines, however are networks that spread across regions and the nation. The idea of these networks is pivotal when it comes to marketing, especially for smaller operations like Dr. Frank’s Winery. “We’ve been a part of WineAmerica for several years, even prior to me joining the winery,” says Frederick Frank, whose family roots run deep in the ownership of Dr. Frank’s Winery in Finger Lakes, N.Y. “WineAmerica has always been an important part of our growth, our operations, our marketing, and in helping with label-approvals,” says Frank who is the president of the family-run winery. “But I think just the fact that [WineAmerica] recognizes that each State has wineries, that they are each important; WineAmerica unites us,” says Frank.

Plant the seed, and members will come

Organizers from within WineAmerica, a national trade association for wineries in the US (formerly the American Vintners Association), originally set out to form networks of communication and develop a unified voice on government relations issues as well as provide comprehensive, affordable insurance for its members. Now its current leader is making it his business to protect the crop, so to speak. “One example of how we help [members] is with the wine-label approvals process that’s required from the Alcohol and Tobacco Tax and Treasury Board (TTB), the regulatory body of the government,” explains Bill Nelson, president of the WineAmerica. But Nelson has proven to be much more than a leader in his field.

He is truly one-of-a kind. With his host of public affairs and government relations experience, Nelson brings a certain kind of familiarity to the issues at hand. “Regulators in the government really prefer to work with someone who knows something in the industry other than a lawyer,” explains Nelson who lives in Alexandria, V.A but travels often to Capitol Hill. The 66-year old regulatory affairs veteran is looked upon by the vintners as someone who gets things done. “Bill is very involved in the bigger issues. For example, they helped defeat an increase in the Wine Excise Tax in the US,” says Frank. But what attracts the current members to be part of the national association is not only its commitment to address sticky issues but also the sense of equality among the states. “[WineAmerica] understands that all 50 states have wineries and this helps us politically because now basically, every Senator has wineries in their State. It becomes much more than a national issue rather than just California and New York State,” says Frank. Since the national association founded in 1975, several regulatory issues have bubbled up to the surface.

Growth in numbers strengthens the grapevine

The association expanded in number and geographical base in the 1980s and, in 1991, merged with the much smaller National Vintners Association to form the American Vintners Association. Another important benchmark in growth was to structure optional joint membership between WineAmerica and Family Winemakers of California. With more than 800 members from 48 states WineAmerica is the only wine trade association with national membership. This vast network of wineries and members provides formidable grass roots lobbying strength used to benefit the entire industry.

WineAmerica member Ron Barrett agrees. “An overriding factor [of being a member] is not what most identify with—usually that’s issues around labeling or discount for FedEx and such—the big one in today’s world is lobbying,” says Barrett, partner of Kinkead Ridge Vineyard and Winery in Ohio. In reality, he says, it is difficult to lobby as an individual winery. “But there’s more impact, more profile on issues…and [Wine America] gets it done,” says Barrett adding anything related to regulation is crucial but especially when it comes to taxation.

The current economic climate proved to be tough to plough through as it poses challenges with cash flow. Generally speaking, wine is a slow business. “You don’t turn over every 30 days, so you have a certain amount of buffering but there have been some payment issues and it seems like wine sales are up except at the high end,” explains Nelson. There have also been problems with distribution, which he thinks have been due to tighter line of credits. Not to forget that the environment plays an extremely influential role in the business of wine making.  “All agriculture goes up and down but if you have a freeze at the wrong time you can lose 30 per cent of your crop,” says Nelson adding less product to sell obviously means a hindered cash flow.

Complex regulatory issues remain a challenge

Among vintners and members of WineAmerica, shipping and distribution laws seem to be a hot-button issue. “Inter-state shipping to consumers has becoming increasing challenging because each State has its own laws when it comes to distribution,” explains the Dr. Frank’s Winery president. “There are even issues between the border –Canada and New York—where basically we don’t have a free trade situation. There are excise taxes in Ontario that are literally double the price of the wine,” says Frank.

In other words, if a Canadian crosses the border to visit some New York wineries, they can only buy two bottles per person without having to pay the excise taxes. “The reverse is, of course, completely different,” says Frank. “For Americans going to Canada, the excise taxes are so low that the border guard literally waves them along without having to fill out the paperwork,” he says. Many vintners have a hard time understanding how the two countries can have a so-called reciprocal relationship when clearly it is not a 100 per cent duty free border for all.  Barrett agrees that the issue of free-trade agreements is lacking equality on both sides of the border.  For this reason, WineAmerica has added the contiguous border issue to its hit list.

Perhaps what is more challenging are the more complex regulatory issues. Nelson is currently working on several international files that require some understanding from both sides. For example, World Health Organization (WHO) is developing a policy on alcohol. While industry experts must respect the laws of other countries where alcohol is banned or forbidden, Nelson says, it is important to see that the WHO doesn’t treat it like tobacco. Because there is a new administration, lobbying groups such as WineAmerica are currently in the midst of a courting period. Nelson has been making frequent trips to Washington to draw attention to the several regulatory issues ranging from food safety to the farm bill. “There has been talk about taxing alcohol as part of the health reform package and that could be devastating to our members so we are working to avoid that,” says Nelson.

Negative press taints the whole crop, say vintners

While regulatory issues continue to be a challenge, “anti-alcohol” campaigns have started to sway the public’s opinion with contradictory health claims and dire warnings in the news about the substance but also generated confusion. Just how much is too much-and is there such thing as too little in one’s diet? While the obvious results of drinking too much have its repercussions for both genders, as well as people on medications and pregnant mothers, that exact cut-off limit is still under debate. However the old saying: everything in moderation really does go without much explanation. But there is one intriguing thing that should be noted.

As part of an in-depth health story, Cornell University researchers did a TV show called the French Paradox where 60 Minutes looked at the French population and found that they consume a lot more fat than Americans yet their incidence of heart disease is much lower. The news report found that the French consume ten times more red wine on average than Americans so they put the two and two together. Cornell University researchers took it one step further and asked the question: what is it about red wine that is good for you? They discovered that a compound in red wine called reservatrol. This naturally occurring compound is produced when several plants, including grapes, are under attack by fungi. Scientists also believe this compound is one of the keys to longevity since the consumption of red wine leads to a lowered risk of heart disease and cancer. The Cornell University researchers analyzed red wines from all over the world and found that the pinot noirs from the Finger Lakes had the highest level of reservatrol. Interestingly enough, one of the world’s healthiest wines is Dr. Frank’s Fleur de Pinot Noir, which has the same amount of reservatrol as 17,000 capsules of commercial reservatrol pills. “I asked the researcher about that. He said that these health food pills don’t have alcohol in them and reservatrol is very unstable,” says Frank. “That’s why the pills sold in the health food stores typically have very low levels and why the levels in the pinot noir is stabilized in the alcohol,” explains Frank.  Despite the laws about using health claims in advertising and in labels, the headlines about Finger Lake’s healthiest wines left its vintners like Frank was a smile.

Pressing forward

The National Association for Wineries is ideal for those vintners who want to be a part of the strong network that promotes creativity and information-sharing. “All businesses and industries need to be involved in advocacy,” argues Nelson. “That’s only enhanced for wine because it’s so highly regulated,” he says.  “It’s critical we educate and advocate and work uniformly to ensure positive outcomes because wine at the local level has been a boom to agriculture, the economy, tourism in all states in the US,” explains Nelson. “It’s providing a cocoon, an environment that is favorable to growth of wineries in the US.” Now that’s something to clink glasses about.

Add to: del.icio.us | Digg | NewsVine | Mixx | FaceBook | Twitter