Cluster Means Collaboration

By John Darling

Some major players in the wine industry from Southern Oregon and the state level encouraged 80 attendees at the Wine Cluster Conference in Grants Pass to keep past robust growth in mind during the recession and to focus on developing industry clusters and wine tourism.

State Employment Department Economist Brian Rooney displayed PowerPoint charts showing steady growth of the wine industry out of the last recession—the dot-com bust—but said this recession, being driven by housing prices and a credit crisis, has caused state economists to “write off 2009,” but with predictions of a revival in 2010.

Southern Oregon’s wine industry has grown faster than wineries in any part of the state and its demand for workers (lumped in with agriculture statewide) makes it No. 2 for “vacancies” out of 500 job categories, Rooney said. There’s also a big demand for professional training in the viticulture field, he added.

The conference was organized by Umpqua Community College’s Southern Oregon Wine Institute, which has enrolled over 30 students in its first year. It is awarding one- and two-year certificates in viticulture and enology, offering the program online, and is starting its own five-acre vineyard, said UCC President Blaine Nisson.

Purpose of the conclave was to boost “industry clusters,” meaning partnering of competitors in the same industry to increase markets, swap business secrets and get favorable regulations for the benefit of all, something Southern Oregon has been doing for almost a decade, said Anne Root, owner-manager of EdenVale Winery in Phoenix and a member of the Oregon Economic and Community Development Commission.

Clusters mature and become effective after about 10 years, and Root observed, “We’re on that edge…we’re doing it almost textbook perfect, and it’s exciting to see it happen. We’re starting to have clout and influence. When we’re successful, more money goes into state coffers and there’s more employment.”

As one regulatory quandary, Root and others cited the ban on adults drinking alcohol between the ages of 18 and 21. Nisson noted the obvious obstacle for young UCC students wanting to get their viticulture degree—one participant said he was having to send a son to train in Germany where the drinking age is late teens.

Carolyn Hill, executive director of Southern Oregon Visitors Association in Medford, led a group on Wine Destination Tourism and noted this region has had the strongest showing in the state-run Oregon Bounty program, which partners wineries with restaurants, farms and tourist attractions, but that the economy has suppressed such wine tourism by 5 percent in October and November.

“Of course, the economy has hurt tourism, but, all things considered, not too badly. We’ll see when the fourth quarter gets evaluated in February,” said Hill, in an interview. “We’re in a drive market (tourists need a car and cheap gas to get here) and our No. 1 market is California, especially the Bay Area. California has been in a recession longer and so they’ll come out of it sooner.”

After conducting a how-to PowerPoint on clustering, Ron Fox, executive director of Southern Oregon Regional Development Inc. in Medford, said the practice is vital for this region’s wineries because “they’re all small volume wineries, and collaboration makes their marketing more efficient and effective. We can’t compete with Mondavi, but we can cooperate to sell to the global market.” ◊

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