Journal of the NACAA
ISSN 2158-9429
Volume 2, Issue 1 - September, 2009
Examining the Land Use, Development, and Succession Concerns of the Northeast Ohio Grape & Wine Industry
- Marrison, D.L., Assistant Professor, The Ohio State University
ABSTRACT
The grape and wine industry is a dynamic part of the northeast Ohio's agriculture industry with 1,300 acres of vineyards and 20 wineries. In 2007, OSU Extension led a study to determine vineyard expansion intentions, estate and succession planning, development pressures, and future operational concerns. Sixty-eight percent (67.7%) of the sixty-two northeast Ohio vineyard and winery operators responded to the survey. Respondents indicated they plan to plant 156 new acres of grapes during the next five years. Over forty percent (40.5%) indicated they would consider renovating, expanding or establishing a vineyard if a statewide vine grant program was offered. Fifty-two percent (52.4%) reported they would consider compensation for preserving and protecting their vineyard property from development. Sixty-nine percent (69%) reported abandoned vineyards within one mile of their operation. Forty-eight percent (48.8%) vineyards had been removed for development within one mile of their operation. The top three operational concerns for the future were costs, employees, and regulations. Fifty-four percent (54.8%) indicated they did not know who would take over their operation in the future. Eighty-four percent (84.6%) reported they did not have a written estate plan. As a result of this study, OSU Extension has shared the results with county and township officials so they may be better aware of the land use and future concerns of the northeast Ohio grape community. A greater emphasis on estate and succession planning has been placed on regional and state Extension programs to help address the lack of planning by producers in these areas.
Introduction
The grape and wine industry is a dynamic part of northeast Ohio’s agriculture industry with 1,300 acres of grape vineyards and 20 wineries located in Ashtabula, Lake and Geauga counties. Many of these vineyards are located where unique microclimates exist which allow grape vines to develop their buds late in the spring to avoid frost while providing a longer growing season which allows for the maturation of the grapes. Water course such as rivers and lakes are often key components of these unique microclimates. Ohio’s largest grape growing region is located in northeast Ohio, on both sides of the Grand River Valley, in close proximity to Lake Erie.
Much of the northeast Ohio grape growing region is located in the Cleveland Metropolitan Area. This provides a clientele base for grape and wine products with close to 500,000 persons visiting northeast Ohio grape and winery operations each year. However, this population can exert undue developmental pressure on vineyard operations. The 2000 Ashtabula County Farmland Preservation Plan1 cited the strong development pressure which exists on the grape and wine industry of northeast Ohio. The Harpersfield grape growing region was listed as the highest priority by the plan due to its unique microclimate and proximity to urban pressure. It was noted this grape growing region could be adversely affected by development.
In 2007, OSU Extension in cooperation with the Ohio Wine Producers Association and Lake County Soil & Water Conservation District formulated strategies to address the land and development concerns in the Northeast Ohio grape growing region. In order to examine the changes occurring near this grape region, the team developed a survey on vineyard planting and expansion projects, estate and succession planning, development pressures, and concerns for the future operation of grape and wine businesses.
Procedures
A survey2 was developed in the spring of 2007 by the research team and pilot tested utilizing input from the Ohio grape industry. This project was reviewed by the Institutional Review Board at The Ohio State University. Survey data were collected, tabulated, statistically reviewed, and summarized by Ohio State University Extension faculty.
Sixty-two vineyard and winery operations were mailed a survey in July, 2007 with a second mailing in October to non-respondents. Twenty surveys were sent to winery operations in Ashtabula, Lake and Geauga counties and forty-two were mailed to vineyard operations that do not have wineries. These growers are described as “grower-only” in this summary data. This group is predominantly Concord juice growers but includes a few producing wine grapes that are sold to local wineries.
Forty-two producers (67.7%) responded to the survey. Sixty-one percent (n=27) of the grower-only group responded and 75% (n=15) of the winery operations responded. A total of 582 acres of grapes were reported by survey respondents. Data were analyzed using the statistical program Statistical Package for the Social Sciences (SPSS).
Vineyard Plantings in Northeast Ohio
Thirty-eight percent (38.1%) reported planting 88.5 new acres of grapes in the past five years. There was a significant difference between the winery and grower-only group in regards to these new plantings (α = 0.01 level). Seventy-three percent (73.3%) of the winery respondents (n=11) reported they planted new acreage compared to nineteen percent (19.2%) of the grower-only group.
Seventeen producers (40.5%) anticipate planting 156.5 new acres of grapes in the next five years. Again, there was a significant difference between the winery and grower-only group in regards to new plantings (α = 0.01 level). Eighty percent of the winery respondents (n=12) reported they would plant new vines compared to 18.5% of the grower-only group.
Over forty percent (40.5%) of the respondents indicated they would consider renovating, expanding or establishing a vineyard if a statewide vine grant program was offered with an additional twenty-six percent (26.2%) of the respondents uncertain.
Estate and Succession Planning
Thirteen percent (13.3%) of winery and nine percent (9.5%) of vineyard respondents indicated they planned on selling or transferring their business in the next five years. Fifty-four percent (54.8%) of all respondents indicated they did not know who would take over their operation in the future with seventy percent (70.4%) of the grower-only group not knowing who will take over their operation (Table 1).
Winery and grower-only respondents were significantly different (α = 0.05 level) when asked this question. Sixty percent (60.0%) of the winery respondents indicated a family member would be taking over their operation as compared to thirty percent (29.6%) for the grower-only group (α = 0.05 level).
Table 1. Business Transfer
Is There a Plan in Place to Transfer
|
All
|
Grower-
|
Winery
|
Your Business Upon Your
|
Respondents
|
Only Group
|
Respondents
|
Retirement or Death?
|
(n=42)
|
(n=27)
|
(N=15)
|
|
|
|
|
Yes, a family member will be taking
|
40.5%
|
29.6% y
|
60.0% y
|
over
|
|
|
|
Yes, a non-family member will be
|
2.4%
|
0%
|
6.7%
|
taking over
|
|
|
|
No, I do not know who will take
|
54.8%
|
70.4% y
|
26.7% y
|
over my operation
|
|
|
|
Other
|
2.4%
|
0%
|
6.7%
|
y Responses for winery & grower-only were significantly different at the α = 0.05 level.
While forty-three percent (42.9%) of all respondents indicated a family or non-family member would take over their operation, many had not formalized their intentions through a written estate plan. Eighty-four percent (84.6%) reported they did not have a written estate plan. This number was higher for the grower-only group as ninety-two percent (91.7%) of this group (n=22) did not have a written plan whereas seventy-three percent (73.3%) of the winery group did not have an estate plan.
Utility Services & Land Use Changes
Producers were asked to indicate which public utility services were adjacent to their winery or vineyards. Respondents indicated 95.2% electric, 81% cable, 35.7% public water, 11.9% sewer, and 2.4% reported no public services were adjacent to their property. Producers were also asked six questions with regards to land use changes near their operations (Table 2). Only five percent (4.8%) of the respondents had sold any of their land for development during the past five years.
Sixty-nine percent (69.0%) reported abandoned vineyards within one mile of their vineyards. Forty-nine percent (48.8%) reported vineyards had been removed for construction within one
mile of their operation in the past five years. Only seven percent (7.3%) indicated they had experienced any negative impact due to construction near their vineyards. Only nineteen percent of all respondents reported having any problems with zoning or other state and/or local regulations which affected the achievement of their business goals. However, winery operations indicated significantly greater problems (α = 0.01 level) with local or state regulations (40.0%) than the grower-only group (7.4%).
Fifty-two percent (52.4%) of all respondents reported they would consider compensation for preserving and protecting their vineyard property from development. The winery and grower-only group differed significantly (α = 0.05 level) with regards to this questions as sixty-seven percent (66.7%) of the winery operations would consider this alternative versus forty-four percent (44.4%) of the grower-only group.
Table 2. Questions about Local Land Use
Land Use Impact on Local Vineyard & Winery
|
All
|
Grower
|
Winery
|
Operations
|
Respondents
|
Only
|
Operations
|
|
(n=41)
|
(n=26)
|
(n=15)
|
Have you sold any of your land for development during
|
4.8%
|
3.7%
|
6.7%
|
the past five years?
|
|
|
|
Are there any abandoned vineyards within one mile of
|
69.0%
|
77.8%
|
53.3%
|
your vineyards?
|
|
|
|
Have any vineyards been removed or developed for
|
48.8%
|
57.7%
|
33.3%
|
housing within one mile of your operation in the past
|
|
|
|
five years?
|
|
|
|
Have you experienced any negative impact due to
|
7.3%
|
7.4%
|
7.1%
|
housing construction near your vineyard?
|
|
|
|
Have you had problems with zoning or other state
|
19.0%
|
7.4% z
|
40.0% z
|
and/or local regulations which have affected the
|
|
|
|
achievement of your business goals?
|
|
|
|
Would you consider compensation for preserving and
|
52.4%
|
44.4% y
|
66.7% y
|
protecting your vineyard property from development?
|
|
|
|
z Responses for grower-only & winery were significantly different at the α = 0.01 level.
|
|
||
y Responses for grower-only & winery were significantly different at the α = 0.05 level.
|
|
Respondents were asked if they ever wished to sell their vineyard operation, which statement would best describe themselves or their family (Table 3). Over fifty-eight percent (58.5%) percent would prefer to keep it a vineyard but would sell to the highest bidder if they could get more money from a housing developer than a grower. Fifteen percent (14.6%) percent reported they would sell to the highest bidder and twenty-two percent (21.9%) indicated they would sell it someone who would keep it a vineyard.
Table 3. If You Wanted to Sell Your Vineyard Operation, What Would You Do?
If you sell vineyard, what
|
All
|
Grower
|
Winery
|
statement would best
|
Respondents
|
Only
|
Operations
|
describe you?
|
(n=41 )
|
(n=26)
|
(n=15 )
|
May the highest bidder win
|
14.6%
|
19.2%
|
6.7%
|
Sell to someone who will
|
21.9%
|
11.5%
|
40.0%
|
keep as a vineyard
|
|
|
|
Prefer to keep vineyard but
|
58.5%
|
69.2%
|
40.0%
|
sell to highest bidder
|
|
|
|
Other
|
2.4%
|
0%
|
6.7%
|
Not Applicable
|
2.4%
|
0%
|
6.6%
|
Future Operational Concerns
Producers were asked to review ten operational concerns and check their top three concerns for the future (Table 4). The top three concerns for all respondents were costs (78.6%), employees (54.8%), and regulations (42.9%). The top three concerns for the grower-only group were also costs, employees, and regulations whereas winery respondents cited employees as their largest concern with costs and regulations following. The grower-only group rated costs as a more significant concern (α = 0.01 level) than their winery counterparts.
Table 4. Operational Concerns for the Future.
Concern
|
All Respondents
|
Grower-Only
|
Winery
|
Area
|
(n=41)
|
(n=27)
|
Operations
|
|
|
|
(n=14)
|
Costs
|
78.6%
|
92.6% z
|
53.3% z
|
Employees
|
54.8%
|
47.2%
|
73.3%
|
Regulations
|
42.9%
|
44.4%
|
40.0%
|
Taxes
|
38.1%
|
40.7%
|
33.3%
|
Management
|
26.8%
|
25.9%
|
28.6%
|
Finance
|
16.7%
|
18.5%
|
13.3%
|
Competition
|
9.5%
|
3.7%
|
20.0%
|
Information
|
7.3%
|
3.7%
|
14.3%
|
Technology
|
7.3%
|
3.7%
|
14.3%
|
Public Service
|
0%
|
0%
|
0%
|
z Responses for grower-only & winery were significantly different at the α = 0.01 level.
|
Summary
The grape and wine industry has been a dynamic part of the northeast Ohio’s agriculture industry for decades. Respondents indicate they plan to plant 156 new acres of grapes during the next five years. Over forty percent (40.5%) of the respondents indicated they would consider renovating, expanding or establishing a vineyard if a statewide vine grant program was offered with an additional twenty-six percent (26.2%) of the respondents uncertain. Fifty-two percent (52.4%) of all respondents reported they would consider compensation for preserving and protecting their vineyard property from development.
There has been concerned expressed with the future of the industry due to housing and development pressure. Sixty-nine percent (69%) report abandoned vineyards within one mile of their operation. Forty-eight percent (48.8%) of the respondents indicated vineyards had been removed or developed for housing within one mile of their operation. However, only seven percent (7.3%) reported having experience any negative impact due to this construction.
The top three operational concerns for the future were costs, employees, and regulations. Another potential threat to the northeast Ohio grape and wine industry is the lack of planning forthe succession of their business. Fifty-four percent (54.8%) of all respondents indicated they did not know who would take over their operation in the future. Eighty-four percent (84.6%) reported they did not have a written estate plan. This number was higher for the grower-only at 91.7%. There is a clear need for succession and estate planning with this industry especially with the grower-only group.
Results
As a result of this study, OSU Extension has shared the survey results with county and township officials so they may be better aware of the land use and future concerns of the northeast Ohio grape community. A greater emphasis on estate and succession planning has been placed on regional and state Extension programs to help address the lack of planning by producers in these areas. This survey was also expanded to examine the land use, development, and succession concerns of the entire Ohio grape and wine industry.
References
1Marrison, D.L. & Welker, J (2000). Ashtabula County Farmland Preservation Plan. The plan can be accessed at: http://www2.suite224.net/~ashtswcd/farmland_preservation.htm
2Northeast Ohio Grape & Wine Survey (2008). The Ohio State University. This survey can be accessed at http://ashtabula.osu.edu