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Wineries Sprouting Across America

Direct-shipping laws have helped entrepreneurs establish 460 new wineries in the past year

Mitch Frank
Posted: May 26, 2006

More and more Americans are planting vines, crushing grapes and selling wine. As of mid-April, the United States was home to a total of 4,280 wineries in all 50 states, 460 more than at the same time last year, according to data released by the federal Alcohol and Tobacco Tax and Trade Bureau. In 1995, there were only 1,817 wineries.

WineAmerica, a trade association of wineries, analyzes the data the TTB releases each quarter, noting the number of licensed wineries. The group's president, Bill Nelson, cited two factors he believes have contributed to the industry's continued growth. The first, Nelson said, is that grapegrowing and wine production have rapidly become an attractive business model for family farmers--grapes are now the sixth largest crop in America--and the second is that direct-shipping laws and other changing state regulations are allowing small wineries, which typically sell most of their wine in their tasting rooms, to reach a larger number of customers. "The average new winery focuses on on-site sales," said Nelson. "That's why direct shipping is so important."

In addition, new entrants to the industry can capitalize on a growing wine culture in the United States. Last year, Americans listed wine as their favorite alcohol beverage over beer and liquor, according to a Gallup poll, while the number who prefer beer was on the decline.

While the bigger wine states--California (1,867 wineries), Washington (394), Oregon (266) and New York (228)--are still enjoying steady growth, some surprising smaller regions are growing much faster. "There's something going on in the Midwest," said Nelson.

Iowa now has 49 wineries, 36 percent more than last year. The state hasn't been home to that many wineries since Prohibition; just five years ago, there were only 13. But Iowans' wine consumption is up 7 percent, according to state data, and farmers are tearing up cornfields to plant vines. Kansas (15), Illinois (73), Missouri (75), Kentucky (39) and Michigan (103) also saw major growth in the past year. Several small states did not gain any wineries, however, and Ohio and Mississippi lost wineries.

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