Horizon, Host: Ted Simons

August 3, 2011


Host: Ted Simons

Arizona’s Wine Industry Tourism Survey


  • Northern Arizona University’s Arizona Hospitality Research & Resource Center has released the results of a survey of visitors to Arizona’s wine regions. Learn more about Arizona’s wine tourism industry with one of the authors of the report and industry representatives.
Guests:
  • Cheryl Cothran - Ph.D., Director, NAU AZ Hospitality Research Center
  • Peggy Fiandaca - President, AZ Wine Growers Association
  • Tom Pitts - President, Verde Valley Wine Consortium
Category: Business/Economy   |   Keywords: wine, tourism, survey, NAU, industry,

View Transcript

Ted Simons: Arizona's wine industry is pouring millions of dollars into the state's economy. That's according to a new report produced by NAU for the Arizona Office of Tourism. I'll talk with one of the report's authors and some wine industry experts in just a moment. But first, David Majure takes us to a winery in the Verde Valley, one of Arizona's growing wine regions.

Man: To me, it was -- you know, plant another Vineyard, and just do another winery in California, or do I want to go to a frontier and do something new and different and exciting? Everybody's already proven you can grow grapes in Sonoma, but can you do it in Cornville?

David Majure: Cornville, Arizona is a new frontier for wine makers. It’s one of three regions in the state recognized as suitable for planting Vineyards.

Man: Arizona is incredibly diverse from a landscape perspective, and I'm confident you can grow about any grape here, but you have to find just the right microclimate.

David Majure: Ecologist and winemaker Eric Glomski found his slice of grape-growing paradise along Oak Creek in Cornville where he opened Page Springs Cellars in 2004. The winery gets the name from the cold water spring that runs through the property.

Eric Glomski: We have a great water supply; we farm organically, so we have beautiful vineyards. We use, you know, Ducks, Chickens and Geese to do all our weeding and our insect pest-control

David Majure: Only natural ingredients like Chrysanthemum are sprayed on the vine.

Eric Glomski: We have a grape Cabernet Feiffer, which is an intensely spicy grape. To my knowledge, we're the third or fourth vineyard in North America to plant Feiffer.

David Majure: But mostly, Page Springs grows varietals like sera, muvette

Eric Glomski: And fruity ganache, and those three together are the base for our blends.

David Majure: Blending and testing take place in the lab.

Eric Glomski: Everything here is hand-crafted. We babysit these wines their whole lives; we taste intensively.

David Majure: Page spring wines are produced in small batches and aged in oak barrels for up to two years.

Eric Glomski: Right now, we’re going through a tasting through most of our barrels, trying to assess what blends are going into, what wines stand out and should be Vineyard designated. This is the fun part; there's still plenty of work to be done, but I really enjoy this. I think when I tell people I'm growing grapes in Arizona, they think of sand dunes and Looney Tunes: Roadrunner and Coyote.

David Majure: It's a perception Glomski to change.

David Majure: I really truly I believe that winemaking and grape growing is about trying to express a landscape.

David Majure: Like an artist who tries to express the beauty of Arizona on canvas, Glomski wants to paint your palates with flavors that can only be introduced by Arizona's soil and sun.

Eric Glomski: And now we need to have enough people to try our wine. I can't tell you how many people come into our taste room and go, “Oh, this is really good.” We get people--winemakers from NAPA who are visiting who are blown away too. It's actually really exciting to change people's opinions what can be done here.

Ted Simons: And joining me to talk about the Arizona wine industry is Cheryl Cothran, director of NAU's Arizona Hospitality Research and Resource center which produced the Arizona wine tourism industry report; Peggy Fiandaca, president of the Arizona wine growers' association and owner of Lawrence Dunham Vineyards in southeastern Arizona and Tom Pitts, president of the Verde Valley Wine Consortium. Boy, good to have you all here; thanks for joining us and making the trip to Phoenix. Let's start with the study because I want to get to what we kind of saw as far as the individual characteristics of wine in Arizona. But the study, what exactly did you look at?

Cheryl Cothran: Well, we did the market research to understand where they’re from what they're interested in, what they think about the wineries they're visiting, how much money they're spend something, so we can get a picture of this new niche market for Arizona.

Ted Simons: And this is a statewide survey, correct?

Cheryl Cothran: This was a statewide survey; these great wineries in the north and south helped us collect the surveys, and so we have great data from north and south. So we found that 60% of visitors are in-state--40% out of the state. So out of state, it's California--the usually suspects: Washington, Illinois. And in-state, it's really metropolitan Phoenix and Tucson sending visitors out to rural Arizona.

Ted Simons: is that what you’re seeing too?

Peggy Fiandaca: That's the exciting thing about the study is that it's Arizonans really supporting this industry, and discovering rural Arizona and spending money on Arizona wines, so that's very exciting for all of us.

Ted Simons: Overnighters, day-trippers, that sort of thing?

Tom Pitts: We're getting both, and the study gave us a quick break down on how that works, but take the markets as the example: we’re in the northern part of the state and we get about 72%-74% of our +-in-state visitors coming from Maricopa County--coming north. 82% of the southern visitors are coming from Pima County, so there's a double axis we're dealing with that separates itself.

Ted Simons: It looks like a lot travel in groups.

Cheryl Cothran: The average party size was three persons traveling in family and friends. Average age of about 46, which is younger than we see for visitors to most of rural Arizona, so it's a different demographic, younger that are getting out into rural Arizona. Higher than average income, and it's higher than actually the typical tourist in Arizona, which was exciting for us to hear. As well as the fact that people are looking for an experience. And what greater experience that walking amongst the vineyards and enjoying wine.

Ted Simons: Yes. And talk about the experience. What? We have tasting rooms and we have the ability of walking among the vineyards.

Tom Pitts: Yes, this is one of the big keys. Arizona changed the law in 2006 and prior to that some of the way the people were operating wasn't legal. All the way back to prohibition, and there were changes that opened the doors for people to do really progressive business now: the tasting rooms, the visitors coming to the wineries have the opportunity to go out -- kind of have the hands-on experience.

Ted Simons: As far as people spending money, sounds like they've got the money, and are spending the money. Are they spending it on wine?

Tom Pitts: They’re spending a fair piece on the wine: the average visitor’s spending about $70 on wine when they come to a tasting room. Now, the overall expenditure, I’ll let Cheryl will deal with them in a moment, but yes they are spending money on wine and merchandise and food when they come into these tasting rooms. So it’s not just wine, and it’s kind of become a broad-based opportunity to get out and about.

Ted Simons: Talk about the broad-based spending habits.

>> Okay, I thought it was impressive that they go away with an average of three bottles of wine, $70 worth; they buy other food and merchandise. So all together, for both the north and southern wineries, there was a $23 million economic impact. When we calculated the indirect and induced impact, that’s the multiplier effect as those dollars are re-spent, that’s about $15 million for a total annual impact of $38 million.

Ted Simons: That's got to be a big impact on some of these rural areas.

Peggy Fiandaca: It’s a tremendous impact, and we're talking less than 50 wineries in the state of Arizona. The potential for having even more of an economic impact on this state through this industry is tremendous.

Ted Simons: I -- please.

Tom Pitts: Well part of that too--just to add to that, the law changed in 2006; you go back to the turn of the millennium, there were only nine licensed wineries in the state; now that's 50. In the last four, five years, these are new operators bringing new people, and one of the things that came up in the studies is at least 25% people of these people that visited had never been to a winery in their life.

Ted Simons: I was going to bring that up next. First time visitors: we seem to see a lot of them in this study.

Cheryl Cothran: A lot of them were first-time visitors; those could be the ones from out of state who were first-time visitors to these wineries. [Indiscernible] That is kind of surprising.

Peggy Fiandaca: But that's exciting for an owner of a winery and vineyard because we have this opportunity to turn them on to wine and the experience for life by educating them and telling them about where the wine comes from and how it's made and build that passion in people.

Cheryl Cothran: Right. And I think a lot of groups going out there are taking friends and relatives who come to visit, and maybe this is the first experience. But that’s the wonderful thing about this niche: that we get to add this experience to other experiences that visitors are having here.

Ted Simons: And sounds like from the report that most people seem to be satisfied. You hit enough tasting rooms, you'll be satisfied with just about everything, but what I’m saying is most seem to be enjoying the experience according to the report.

Tom Pitts: Yeah, one thing that we’ve seen--I talked to you about this in a recent meeting we had—I talk to a lot of people--I'm also on the tourism council and the regional economic group and we so we talked to lots of others as well and we see a lot of visitors, of course to our region. And some people have become a little bit jaded with the other tasting rooms around the world, especially the west coast because of the traffic and crowds. People come to our tasting rooms, it's a fresh experience; they’re dealing with wine makers and key staff. This isn't just somebody punching a clock and coming in; these are people who have a stake in it, and it's really fun.

Ted Simons: Compare that to what you might find whether it’s NAPA, Sonoma or those sorts of areas. I’ve seen those—those are very refine areas almost like you feel you’re in a high-class restaurant rather than a tasting room. Is there more of a bucolic aspect in Arizona?

Peggy Fiandaca: In Arizona, the wine and grape growing it's truly agriculture, and you're dealing -- as Tom said—you’re dealing directly with the winemaker, or you’re dealing directly with someone very knowledgeable about the business, and so I know myself, being a collector of wine for a long time, when I visited, I wanted to talk to the winemaker and learn and talk right to that person. And that's what you get here this Arizona.

Cheryl Cothran: Exactly, I think it's an authentic local experience that visitors everywhere are looking for, and they’re getting sustainable agriculture in a wonderful rural settling.

Peggy Fiandaca: Yeah.

Cheryl Cothran: It's taking all of the boxes that people are looking for.

Tom Pitts: Let me pick up the sustainability issue. This is important and a lot of people don't understand. The wine that we're familiar with is an arid region plant. This is a low water use plant. These plants came from the desert, and in pre-classic times, the great growing areas were in places like Syria and Iraq and Iran and Israel, and so on. These are definitely desert region plants that use a very, very small amount of water compared to other crops.

Ted Simons: Really quickly, back to the numbers as economic impact. What are looking at as far as jobs here?

Cheryl Cothran: We found an impact of about 400 jobs. $6 million in state and local taxes produced by this. Again, a nice niche market to add to the rest of the tourism industry.

Peggy Fiandaca: A tremendous opportunity for us. If you've been to California where they recently did an economic impact study of their wine industry, and in 1989, there were only 7 wineries. Today there's over 200 wineries, and they are bringing in an economic impact of $1.5 billion, and we can be there; we can do that.

Ted Simons: Can we be there? Because how much can Arizona handle, A, and areas that are totally undiscovered right now as far as growing grapes, growing wine, that are just waiting to be developed?

Tom Pitts: Good chance. We've talked about that quite a bit, and there are growers experimenting now all over the state. There's an outfit in Kingman that just recently planted as an example. Certainly in our area, the demand is outstripping the supply by quite a bit. So every single grower in our region is going to be doubling their acreage by next year. That’s going to double the jobs; that’s going to double the cash flow, the among of acreage, the amount of product. And what's impressive with the study is it's not just the grape growers: I'm not a grape grower; I have a restaurant in Jerome and I’m the president of the association, and we've had—or the Consortium—and we’ve had a number of other business interests come to the table because they see the obvious benefit. When these people are coming and spending their tourism dollars, 60% of our overnight visitors are staying in Sedona; we’ve have a number coming up to in Jerome, a number going into Cottonwood. Old time Cottonwood--I’m sorry—but it was just like a morgue a few years ago. They opened up the tasting rooms; suddenly there's a olive oil tasting rooms, there’s new restaurants, there’s a chocolate tasting room; it's just exploded that area, and so we see the impact expanding beyond just the Vineyards.


Cheryl Cothran: The spinoffs. As we say in tourism, it’s getting that visitor who is may be already here it spend another day, night, and have more meals and really dramatically increases the economic impact.

Ted Simons: In terms of that visitor, did you see the difference between the Verde Valley, Southeastern Arizona, is there a different characteristic in terms of the visitor? We’ll talk about the wine in a second.

Cheryl Cothran: There were more day visitors in the southern area. Again, there's not a lot of lodging in the rural areas. And we have the accommodations in Sedona, so we’re seeing many more overnight visitors in the Sedona area. I think in terms of age and income, closely aligned.

Ted Simons: Now let’s get to the important part: the wine itself. Is there a difference between Verde Valley, between Wilcox, the whole -- the whole nine yards? Because you hear about that. The weather is a slightly bit different, the microclimate, it makes a difference. Is it making a difference in Arizona?

Peggy Fiandaca: It’s very--obviously soil and weather are critical to the quality of grapes that can be grown here, but the quality of not only wine being made, but the grapes grown are excellent all over the state in all three of the regions currently producing. It's exciting.

Tom Pitts: You do see a few differences in the wine. As an example, the piece with Eric: Eric’s doing a lot of Rome varietals in Jerome. And those kinds of grapes, and when it got first got started seriously in southern Arizona, there was a lot more Cabernet and a few more of the Bordeaux varietals and now we're seeing all kinds of grapes suddenly exploding and with all of the new growers, there's a lot of experimentation, so we're not quite clear where it will wind up but it's wonderful wine.

Ted Simons: If I'm a wine snob and I walk into your restaurant—

Tom Pitts: Oh, we can talk.

Ted Simons: --and you pour me an Arizona wine, am I going to say I can tell that's a Arizona wine, or I can tell that's a little bit different because of -- what?

Peggy Fiandaca: Nationally, our wines are really being recognized. They've been poured in the White House. We've been at James Beard and at key places all around the country. And I think people are surprised by the quality. But at some point, it's going to be where they drink a bottle of Arizona wine and says this just plain quality wine. And we're there.

Tom Pitts: One thing I want to say about that too: I think people here are really interested in place, what the French call tour roi, and the California growers, when it really exploded, tended to be focusing on varietals: “We’re going to make cabernet, the biggest, richest—whatever we can do with cabernet.” And what all of the wine makers here seem to do is they’re taking more of the French, Italian model, and they’re saying, “we're going to let the soil dictate a little more what it's like. Some off it might be a little more off steer, not necessarily over-fruited or over-oaked, but let’s really make a statement that what we can make with this, especially as a food friendly which excites me.

Ted Simons: The report is suggesting that the Arizona wine is making a statement. Good Stuff. Thank You. Good conversation, good to have you all here and continued success and good luck.

Peggy Fiandaca: Thank you very much. Really appreciate it.

Cheryl Cothran: Thanks.



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