Anybody who thinks that grape-growing can’t possibly be a profitable business outside of California, Oregon, Washington and New York ought to take a tour to Stone Hill Winery in Hermann, Missouri—an 80-minute drive west of St. Louis. On a sunny Saturday, some 2,000 people come through to taste wines, and last year, the place drew 200,000 visitors overall.
Stone Hill has a rich history. Founded in 1847, the winery was the second-largest winery in the United States by the late 19th century. Today it’s more than a tasting room; some of the 115,000 cases produced each year go out to wholesale channels in neighboring states like Illinois, Kansas and Oklahoma. The Stone Hill brand is a common sight on the shelves of big box stores, such as Schnuck’s Supermarkets, Walmart and Costco.
For most of the past decade, foodies have been seeking out farm-to-table restaurants where they could eat asparagus picked down the road and beef from cows slaughtered at a local packinghouse, paired with a beer brewed on the premises or nearby. Then they’d order a wine made 2,000 miles or an ocean away. However, wine is now made in all 50 states, and the increased quality of offerings from the likes of Stone Hill are steadily changing consumers’ tastes. They’re more often seeking out regional wines made close to home.
And it’s not just about quantity—the wines made in places like Wisconsin, Indiana and even Arizona are constantly improving in quality. One state after another has sponsored viticultural programs at local universities, turning out new generations of winemakers who are able to craft products made not just from Merlot and Chardonnay, but a whole range of native grapes, including Norton and Muscadine.
“People have been drinking local craft beers and spirits, and now they want to try regional wines too,” says Michael Kaiser, a vice president at the Washington, D.C.–based national trade association WineAmerica. “There are now a dozen states that each have over 100 wineries. In Virginia in the 1990s, we had perhaps one or two quality producers. Now we have dozens and dozens—farmers who once grew tobacco are switching over to grapes. In Texas, we have micro-climates that are very similar to the conditions in Spain.” Kaiser also notes that the modern advancement of winemaking techniques has enabled grapes to grow in unexpected places like Minnesota and Vermont.
Orley Ashenfelter, a Princeton economics professor and the president of the American Association of Wine Economists, believes the broadening of consumer tastes is natural. “Travel to France and you usually drink local wines,” he says. “You don’t often drink Bordeaux in the Rhône.” Ashenfelter cites Cuthills Vineyards’ Temparia—a hybrid of Tempranillo and Riparia—from Pierce, Nebraska, as an example of local pride driving consumer’s wine purchases. “The wine retails for $35 a bottle, which seems expensive, but people love it and can’t get enough,” he says.
There was a time when it was the rare regional winery that would dare charge much more than $10 a bottle. Now prices regularly surpass $25 and $30 a 750-ml. The Chicago wine bar Pops for Champagne sells the 2011 Illinois Sparkling Ensemble from The Illinois Sparkling Co. for $57 a bottle—a price that’s higher than many of the Californian, Spanish and Italian sparklers that are also on the bar’s list. Ashenfelter, who recently planted 10 acres of his own grapes in southern New Jersey, says the higher prices serve a purpose. “Many of these regional wineries run out of wine each year, and the higher prices help preserve their inventories,” he explains.
California's Head Start
When it comes to wineries, California still leads the pack by a huge margin, with 3,782 producers, according to 2014 data from WineAmerica. After Washington at 681 wineries, Oregon at 599 and New York at 320, Virginia ranks fifth with 248, followed by Texas with 204 and Pennsylvania with 182.
As recently as 2004, Virginia had just 1,900 grape-bearing acres and produced 3,700 tons of fruit, according to the National Agricultural Statistics Service. That total has grown to 3,144 acres in 2015, according to the Virginia Wine Marketing Office—a large jump, but still just a tiny slice of California’s total of 560,000 acres. Virginia has created more than two dozen wine trails in support of the industry. About three-fourths of its local wines are sold through tasting rooms, while the rest goes into wholesale distribution, and big dollars are being invested. Early Mountain Vineyards in Madison, Virginia, is owned by billionaire and AOL founder Steve Case and was recently voted by one travel publication as having the best tasting room of any winery in the United States.
Barboursville Vineyards also has a national reputation. Its 2012 Octagon—a Bordeaux-style red blend priced at $55 a 750-ml.—is offered at Wine Spectator’s Grand Tour events and sold off-premise outside of Virginia, along with some of the other 17 wines it produces. Annual volume amounts to about 40,000 cases. “We’ve got many bottles in our library here from the 1990s that are drinking nicely, proving to people who once doubted us that Virginia wines are age-worthy,” says general manager and winemaker Luca Paschina, who comes from Italy’s Piedmont region. “Piedmont isn’t very different from here in terms of climate and growing conditions,” he notes.
David King, the co-owner of King Family Vineyards, makes just 13,000 cases a year but has boosted his visitor traffic—pegged at 50,000 last year—by staging polo matches each weekend on a field adjacent to his vines. The winery’s non-vintage Brut sparkling wine, priced at $36, is popular, but he doesn’t make enough of it to sell very far beyond the winery. “In Virginia, just 5 percent of the wine sold is made in Virginia,” King says. “We have a lot of market share we can go after.”
Over in the state capital of Richmond, the Barrel Thief Wine Shop stocks 400 wine labels, some 30 of them from Virginia. Sommelier and owner Booth Hardy has had success selling the 2015 Early Mountain Foothills ($20 a 750-ml.), a red blend dominated by Merlot. “It’s a very good value at that price,” Hardy says. “We’ve noticed here that people come in looking for either Virginia wines or something else. We can’t switch them from French wine to Virginia in most cases.”
Lone Star Grapes
Wine production in Texas has jumped nearly 40 percent to 1.3 million cases in the past decade. According to the Texas Wine & Grape Growers Association (TWGGA), the state counts 17 wine trails, and some 1.8 million tourists visit Texas wineries each year, spending close to $500 million. The Texas Hill Country is rated the second-largest wine region in the country, after Napa. Wine grapes have been good for the state’s farmers, often planted in water-scarce areas where predecessor crops such as cotton had struggled through frequent droughts.
On his 148 acres in Texas Hill Country, Neal Newsom farms Cabernet Sauvignon, Merlot, Sangiovese, Syrah and Petit Verdot at elevations of 3,500 feet and higher at his Newsom Vineyards. “It gets very hot here—into the 90s—during the daytime in summer, but it cools into the low 60s at night,” says Newsom. “We’re surrounded by cotton fields, though wine grapes can gross 10 times per acre what cotton gets. The challenge is that wine grapes are very labor intensive—all my grape picking is done by hand. Cotton is so mechanized that farmers around me can farm 20,000 acres with four or five employees.”
According to the TWGGA, an estimated 80 percent of Texas counties are at least partially dry and prohibit alcoholic beverage sales in some areas, but a constitutional amendment passed 14 years ago made it legal to grow and sell wine anywhere in the state. Thus restaurants like the Cabernet Grill in Fredericksburg have flourished while selling a long list of Texas wines.
The same has occurred in Tennessee. James Riddle, the president of the Appalachian Region Wine Producers Association, estimates that 85 of the state’s 95 counties are at least partially dry. The state’s 72 wineries—that number has grown by 85 percent in the past 20 years—are exempted from dry laws and allowed to both taste and sell wine. But Tennessee, plagued by grape-rotting high humidity, has just 1,000 acres planted, and many wineries buy grapes from other states. “Only 20 percent of the wines made here are produced with local grapes,” Riddle says. “We could easily support 5,000 acres in vines.”
In many places, wine grapes are only a small percentage of a farm’s total business. Fireside Winery in Marengo, Iowa, is one of 103 wineries in the state and represents 14 acres carved out of a 3,500-acre spread that’s dominated by corn and soybeans. It gets below zero in the winter, so the winery works with hybrids like the Brianna, which makes a hardy $13 white, and the Frontenac, which is used for a $16 red. Fireside has seen success: It staffs four tasting rooms around the state, produces 42 wines overall and is present in 130 retail stores.
One such retailer is West Des Moines’ Wines of Iowa, which carries more than 40 of the state’s wine brands. Co-owner Jorene King reports that most of her Iowa wine sales are between $10 and $16 a 750-ml., the most expensive being the Reserve Marquette from Train Wreck Winery at $28. “It’s a nice red that compares favorably with any Cabernet Sauvignon,” King says. As in many states, Iowa law allows local wineries to self-distribute, which enables retailers like King to bypass wholesaler markups.
For skeptics, King’s biggest challenge is convincing customers that not all regional wines are sweet. She estimates that about two-thirds of Iowa’s wines are vinified dry. “We have to do a better job of educating consumers,” she says.
Global Warming Spurs Growth
Michigan grows everything from blueberries and peaches to cherries and apples, all along a wide swath of land clustered around the Lake Michigan coast, which proves surprisingly temperate for most of the year. A Michigan State study found recently that global warming has added some 29 days to the growing season in the past 50 years. As such, Michigan has turned into a major hotbed of wine production, with Pinot Noir and Chardonnay both faring well in places like the Leelanau Peninsula near Traverse City. Still, there are periodic disappointments, with a harsh winter in 2013 cutting grape production by half for the ’14 vintage, followed by hail damage a year later.
Michigan wines have won wide acceptance around Midwest restaurants. Wyncroft winemaker and co-owner James Lester started growing Pinot Noir on the winery’s property near South Haven in the late 1990s and has won placement at top Chicago restaurants. The 2013 Wyncroft Avonlea Vineyard Pinot Noir is priced at $45 a 750-ml. in the tasting room. “We make just 1,000 cases a year, but would like to increase that to 5,000 someday in the future,” says Lester, who likens Michigan’s emergence to that of California in the 1960s. “I don’t have any trouble getting my wines into fine restaurants. The sommelier only has to taste my product.”
Wine clubs are a big deal for most regional wineries. Black Star Farms, perched north of Traverse City on 160 acres, maintains hiking trails and a 10-room luxury inn for visitors while producing 30,000 cases a year spread among 45 labels, including fruit brandies. The winery maintains four tasting rooms and has a wine club of more than 2,000 members, up from 600 a decade ago. Its Barrel Room is filled with the highest-end wines for special club member tastings. The wines are sold as far away as Minnesota.
To distribute in a serious fashion in other states, regional winemakers must sell wholesalers on their products. In St. Louis, Lohr Wine & Spirits vice president of sales Scott Smithson reports that the top-selling value brand in Missouri wasn’t from California, but locally made. “We sell a ton of California wine here, but the No.-1 selling wine in Missouri between $6 and $9 last year was the Stone Hill brand,” Smithson says. “It outsells Robert Mondavi, which is really saying something.” He adds that rival wholesalers like Breakthru Beverage Group and Southern Glazer’s Wine & Spirits carry wines from Missouri and elsewhere. St. Louis–based grocery chain Schnuck’s makes room for 18 Stone Hill wines on its shelves, along with a range of other local brands.
The scale is getting ever bigger. St. James Winery in St. James, Missouri, sells 250,000 cases a year, with roughly 40 percent of that distributed through Missouri wholesaler Major Brands. The wine is available in 17 states. St. James CEO Peter Hofherr has expanded his business in recent years, opening a brewery in 2014 and a cidery last year. He’s planning on building a distillery next, as part of what he envisions as a “fermentation campus” erected around the winery. “We get up to 100,000 visitors a year here,” Hofherr says. “We want to grow that number by giving people three or four different places to sample our products when they arrive. The millennial generation loves to sample new things all the time, and we think they will play a key role in driving the growth of regional wineries.”