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Discussion: Iowa's Wine Industry

posted on February 2, 2011 at 3:37 PM

Making good wine is a complex process.  It takes the cultivation of a variety of grapes that will grow well in the Iowa climate, as well as the blending and processing of those varieties into an excellent taste and flavor consumers demand. 

Here to talk about the wine industry in Iowa are three guests with us, Mike White of the Iowa-based Midwest Grape and Wine Industry Institute; across from him at the table is Ron Mark, the owner and operator of Summerset Winery in Indianola; and Barb Rasko is publisher of the “Make Mine Wine” magazine. 

 

Yeager: To the three of you, thank you so very much for coming in to discuss this topic.  Mike, I want to start with you.  Is the Iowa wine industry still in experimental stages?

White: No, I wouldn’t say that.  We’ve been doing it, I would say, fairly active for about ten years now.  We’re not completely mature.  We have some infrastructure yet to be put in place.  But I’d say we’re probably 70 percent there.  We’re getting close.

Yeager: Rob, do you think that’s – what do you think about that?

Mark: I think we’re still trying to figure out the best grapes to grow.  When we first started, we knew who would grow.  Since then we’ve discovered more, and they might be better.  So we still are experimenting somewhat.

Yeager: Barb, will we ever see this industry go away in Iowa?

Rasko: No, I don’t think so.  I don’t think so.  I think we’re where Napa Valley was years ago.  And as people come to visit us and enjoy the wineries and the wine, the wine is getting better.  I think we’re here to stay.

Yeager: So you hit a couple of things, you both did – actually all three of you did.  But is that the reason why Iowa should have a wine industry?

Rasko: Well, as you said, we were sixth in grape production years ago, and grapes grow very well here.  We have creative and dedicated winemakers, so why wouldn’t we?  It’s a great beverage and something that people enjoy. 

Yeager: So we went away partially because of prohibition and then also corn and soybeans.  We know corn and soybeans do things to the soil.  What do grapes do to our soil? 

White: Really grapes don’t take much fertilizer.  And the biggest reason why we have vineyards in Iowa – wine grape vineyards is in the mid ‘90s Cornell University and the University of Minnesota, they started coming out with grapes specifically bred for wine grape production in the upper Midwest.  And that is the number one reason we have a wine industry in Iowa right now.

Yeager: Because, Ron, when you started back in the late ‘90s, you really didn’t have that many Iowa-grown grapes to pick from to mix – to make your wine.

Mark: No, I started planting my vineyard in 1989, and I experimented with different things.  I probably tore out more acres than most people have planted, because no one really knew what was doable.  I contacted Iowa State University and they said, oh, you can’t grow grapes in Iowa primarily because of 2, 4-D drift from the corn fields.  But I see us as having great opportunities right now.  We’ve got a lot of things in place. 

Yeager: Who has been the biggest helper?  You mentioned Iowa State.  Is that who’s been of big assistance to guys like you who are in production of the wine?

Mark: They’re a big help to the winemakers because we have the institute – the wine institute up at Iowa State.  And we can send our wine to them and ask for an evaluation.  One thing they will do that you can’t get out of most laboratories is they will also tell you how to fix a problem, which a lot of these new, young winemakers are going to have a lot of problems that they don’t know how to fix.  So we’ve got some things in place that we didn’t have before.

Yeager: And guys like Mike, that’s kind of what they’re able to do.  I mean your job has even evolved since you’ve been with the ISU Extension.  You used to be full-time with them.  Grapes were kind of on the side.  Now you’re full in.

White: I’m a certified corn and soybean agronomist.  And Ron pulled me into this in about 2000 and wanted some help – he wanted some grape growers.  So we jumped in and I knew that the green side went up when you plant them, you know.  But my job has evolved from corn, soybeans, forages.  Now I work with vineyards, how to take care of the vineyard and how to plant the vineyard.  And I work a lot even with the marketing side of wineries and things like that.  I don’t get into the wine making itself.  We have other people do that.

Yeager: You mentioned how you’ve been trained in a background in corn and soybeans.  How many of the corn and soybean farmers that you had at the beginning of your career in this area are now doing grapes as well?

White: Yeah, at the beginning the corn and soybean farmers, most of them were somewhat, I would say, kind of against the wine-grape industry coming in because many of the pesticides they used, that 2, 4-D or Manville-type products that could drift over to the grapes and harm them, and they could see that as a liability.  About somewhere around 2005, that changed.  I think the farmers realized that this was going to be an industry to stay.  But the other thing that happened was the kids were coming back from college and said, “Mom and dad, I’m going to stay on the farm and do the corn and soybeans, hogs and cattle deal, but let’s put in a vineyard or a winery.”  And then we started seeing some big farmers get into this – the vineyard industry.

Yeager: Barb, is that true around the state, do you think, or is that just in certain pockets of the state?

Rasko: I think it’s true pretty much everywhere except northwest Iowa.  They have now started their Iowa – I mean, their northwest Iowa grape and wine association, and we’ll see more development there.  But I would say that’s been the slowest side to develop.  But the rest of the state has a lot of vineyards everywhere. 

Yeager: All right.  Well, let’s get on to some of the economics of this.  Ron, I’ll ask you as a man in business, what role can grape growing and wine production play in the Iowa economy?  I mean, you know what you’ve done to your local economy around Indianola.  But an industry as a whole, what can it do for the economy long-term? 

Mark: There’s free money out there that Iowa doesn’t do a very good job of collecting.  It’s tourism.  And if you have wineries in a location, people will actually drive off of the interstate if there’s a sign and pull out their credit cards and spend their money at the wineries and at the gas station and in a hotel and a restaurant.  Tourism is free money and that’s one of the biggest advantages to having a wine industry.  The other thing is we’re not sending money out of the state for wine.  We’ve got a nice percentage – about five percent of the wine sold in the state now is Iowa wine.  And it took Missouri twenty years to get there.  And it took us about ten. 

Yeager: When you talk – you said out of state.  How many – what’s the percentage of your customers are from out of state?

Mark: In the summertime quite a few.  It depends.  It’s very seasonal.  This time of year it’s very sparse.  People don’t like to drive into the country.  But in the summertime there’s a good percentage of our customers that are tourists and we’ll give them tours and tastings and they’ll purchase a bottle of wine and go sit on the deck with their friends.  Still the majority of them are locals. 

Yeager: All right, Barb.  What about – we mentioned the out of state.  Is it going to be tourism that helps this industry along the most, or is it going to be quality of the product? 

Rasko: Well, I think the quality is key, and we’re definitely seeing some very nice wines in Iowa now.  And I think that just – what I’m trying to do with the magazine is raise the visibility of what’s going on in Iowa wine country because, you know, I will have people from tour bus companies call and say, okay, what area can we cover, where can we go.  So, yes, you have the people that stop by.  I know, Ron, you have a lot of bus traffic, people that come that have a great day.  So we’re spreading the word.  And I think that tourism is key.  And people enjoy the winery even if they don’t enjoy wine.  That’s an important point.  They come from the music.  They come for the entertainment.  They bring their out-of-town guests.  If you’ve got people in for the holidays, that’s the place to take them.  They’ll be shocked at the great wine in Iowa.  So, you know, everyone can get involved.  It’s like buying something local at the farmer’s market.  Get out, support your neighbors, help the economy.

Yeager: And it’s not just helping the economy.  But it is helping the farm economy, or which economy benefits more, Mike, the farm economy or the economy in general with wine?

White: No, I wouldn’t say the farm economy per se.  You know, if you look at a lot of economic studies about the wine industry and other states, typically when a person visits a winery, for every dollar they spend in a local winery, they’ll spend another 75 cents or dollar locally.  So it’s pretty well impacting probably more of the urban area in there.  That’s a pretty big economic impact.  When I first got into this, you know, I had no idea what wineries were all about.  But essentially they’re event centers and they’re kind of replacing the Methodist church basement and the Odd Fellows Hall in many of these communities.  And this is where the chamber of commerce brings in people.  This is where weddings are held, the Red Hat Society ladies go.  These are becoming the local event centers.  And I think that’s neat and I wish we had a winery in every county, you know.  I hope we get there soon.

Yeager: Is that true, Ron, from a standpoint?  I mean, how many meetings do you have at your location?  You used to have a bed and breakfast that was part of the business.  But how widespread is your reach?

Mark: Well, like I say, I have a wedding every Saturday.  And then we have the grand tours, like Senator Grassley’s world ambassador tour comes to our place.  He’s been there a few times.  Of course, we have to have political fundraisers for everybody in the state.  Then there’s also corporate meetings.  They’ll have corporate dinners out there or their corporate Christmas parties, things like that.  You build a facility large enough and it’s nice enough that you’ll be able to draw people in.  I like to say that the mother of the bride pays my rent.

Yeager: Pays what, your rent?

Mark: Mm-hmm. 

Yeager: Would you have been able to – can a winery exist without those others, other than the wine?

Mark: They do.  There’s wineries out there so small that they make wine in the basement of their house and they sell it in their living room.  They’re out there.  They’re not going to get wealthy, by any means.  But you have to be diverse.  You have to be able to move a little bit into different directions.  So when we had the bed and breakfast and the winery and the wedding facility and all of those things together, it’s like you’re living in a carnival, and it’s just something going on all the time.  Summertime is just crazy, but we have harvesting and we have a hundred people out every Saturday to help us pick our grapes.  And we have lunch and we have grape stomping and they pay me $25.  It’s kind of a Tom Sawyer thing.  But we give them a nice event and they take ownership of the winery in that they helped to make that wine, whether they do or not, but – and then they’ll come back at Christmastime and say, “Ron, which one of these wines did I stomp?”  And they want a case for Christmas presents.  They will be there in the summertime.  So when you get them there once, generally they’ll come back again and again.

Yeager: All right.  You mentioned a couple of things there.  You mention politicians, so I want to go to government.  What has the government done to help you?

Mark: We have in place some laws that give us the ability to be self-distributors.  I can sell to anybody 21 years old, basically, which allows us not to have to go through a distributor.  If I went through a distributor, they would want $2.50 per bottle to carry the wine into the store.  As it is, if we have our own people, they will pay a little bit more attention to how the wine is put in place, the needs of the store, those type of things.  That’s the main thing for me because I am selling wine all over the state now.  One of the things that we also have in place is we have some funding for the institute up at Iowa State University.  That piece right there is going to carry us into the quality area that we need to be at some day.  So we’ve done some nice things in the legislature.  We have some more things we would like to do.  A lot of what we do is make sure no one messes with the industry. 

Yeager: So what more could be done?  Are there other things, Barbara and Mike, that could be done?

White: I’ll let you go on that one.

Rasko: I personally would like to see some truth in labeling that just lets people know where the grapes come from so that if they choose to buy wine that is made from all Iowa grapes, great, or if they choose – if that doesn’t matter to them, that’s fine.  And I don’t know if that would be hard to do or not.  I would also like to see Iowa wine be sold in any state.  We have a fairly restricted list right now where we can sell the wines.  So if you are one of the tourists and you come to Ron’s winery and you love the Summerset wine and you want to buy it and you live in Colorado, you can’t.  So those – I think those are things that I hope would come –

Mark: I think it has to happen on the federal level.

Rasko: It will be the federal –

Yeager: It’s a federal level.  So how many states are Iowa wines available in?  I guess I didn’t know that.

Mark: Well, right now basically Iowa and then we would have to go through a distributor to ship into another state, and there goes your profit.  So unless you have a very, very large amount of wine that you’re trying to move, it isn’t very profitable to have a distributor go into another state.  We can’t ship because every state now requires you to have a license in those states.  It is counterproductive.  It might be a $500 license for me to ship to Colorado.  I’m not sure what it is.  It could be $5 but you have to have one in every state you ship to and you have to renew it annually.  And it really is – for me it was not such a huge part of our business that it wasn’t just easier for us to say we can’t do it. 

Yeager: So that’s prohibitive.  But will that ever change?  You’re saying federal is where that has to change.

White: It is changing slowly.  Those old prohibition laws are starting to –

Yeager: And that’s what it stems from?

White: Yeah, they’re starting to come down.

Yeager: Okay, but can you ship if somebody in Colorado wants to buy?  I know when I was at Tabor Home, there was somebody who was from Colorado who’s like, I can’t buy this at home, I want it shipped to me.  Can they do it that way? 

Rasko: No. 

Yeager: No?  Okay. 

Rasko: I don’t think so.

Mark: I’m not familiar with anybody in Iowa that ships out of state.  In California they have people that have licenses and they’re sort of like an Internet winery.  And they can have licenses in every state and then they will ship out of California for you.  It’s really a difficult situation.

White: It’s very complicated today.  Yeager: We’ll stop on the complicated things.  Let’s get back to some of the other stuff.  I’ve taken us down a path – what Ron talked about has helped the industry.  Are those the biggest things that have helped Iowa wine and the industry grow?

White: I think the biggest thing that will help this industry is to continue to do what we’ve been doing.  This is a very emotionally and politically charged industry, any time you get around alcohol and many states, they get in the in-fighting between the legislature and the Department of Agriculture and the university.  Iowa, everything just – we’re running on all eight cylinders – Iowa State University, the junior colleges, the Department of Agriculture, the Iowa legislature.  Am I missing anybody?  The Department of Economic Development.  We’re all working together and we’re making this industry grow because they realize how the impact of rural Iowa and economic development and – I think that’s the reason why every time we go to the Iowa legislature or the wineries do and ask for legislation, it passes a hundred percent in both the senate and the house.  That doesn’t happen very often.

Mark: Not every time.

White: Well, close. 

Rasko: Quite a bit.

Yeager: I think eight of eight, some of the things you’ve gone for.  I mean, there have been some misfires.  What’s going to be number nine?  What’s the next thing that’s needed to help Iowa move forward?

Mark: I wish I had a crystal ball and an answer for that.  We need to have someone from the wine industry be on the alcoholic beverages division board so that we have a voice of the Iowa wine industry there.  Right now we don’t have anyone.  That would help us with the local alcoholic beverages division folks.  Federally they’re basically a taxing organization.  They want to make tax money off of us and we pay them well.  Statewide they would like to have more regulation on us from that division, which would impair a lot of things that are going on right now.  They have been helpful getting us some things.  We had some laws that went through that helped the wineries be more profitable, and we can sell wine by the glass with a certain license and you can get more money per bottle if it goes into a glass. 

White: And the wine festivals. 

Yeager: And the wine trails.

White: Well, wine trails – people don’t realize this – we couldn’t have a wine festival in Iowa prior to 2005.  They got the law passed and now we have wine festivals.  It’s just amazing some of the things that have been done.

Mark: There’s a lot of things in the law that don’t make sense and they’re leftover from prohibition.  And although no one really wants to fight them, they are the law and so you have to get them changed.

Yeager: Who is getting into the industry if somebody else – I mean, we know that number is getting big.  But is it Ma and Pa or is it somebody who is coming out of college who is moving back to the farm and going all in? 

White: I don’t see any big corporations getting into this.  All these wineries and vineyards are, for the most part, small independent businesses, family businesses that are being started.  We don’t have corporate America involved with the wine industry in Iowa yet.

Yeager: Okay, Barb, you talk about the buses that come in.  Are any of those full of wine snobs who are coming in, as they’re called in the industry, who say, “I’m coming back because Iowa wine is top notch”?  Are we to that point yet?

Rasko: I don’t know that we are.  I think that there’s been a large curiosity factor.  People don’t know what Iowa wine is.  The first thing they need to do is if they want to do the cold, hearty grapes is learn what the names of them are and learn what they taste like.  So I think curiosity really brings people in.  And, you know, we do have Iowa wines that win international awards, very top international awards.  So, you know, you’re going to find some very good wine.  And it’s just a matter of getting out there and trying it.  I think we need to introduce a little bit younger generation to wine because many of what you would call wine snobs might be more mature, older, baby-boomer groups who’s also interested in exploring and finding new things.  But I don’t think that the younger groups, the generation X or the millenniums are very acquainted with wine yet.

Yeager: All right.  We get one minute to discuss the final question.  How big can the Iowa wine industry get?

Mark: I think there’s room, because there’s parts of the state that we haven’t gotten into as far as wineries.  There’s room on the store shelves.  There’s a lot of stores that haven’t carried the wine, and restaurants are not part of our business, because people go in to look at a wine list and they don’t know what a vignola is.  It’s a new name for them.  A Frontenac is something they’ve never heard of.  So it’s not something we try to push.

Yeager: All right.  Mike? 

White: I would say that, you know, Missouri has been doing this close to thirty years.  They’re roughly 8 percent market share of their total wine consumed in the state.  We’re at 5.25 percent, I think it is.  I think we could easily double our market share – easily double our market share with no problems whatsoever.

Yeager: All right.  Very good.  I appreciate your time.  That is Mike White of the Iowa-based Midwest Grape and Wine Industry Institute.  Across the table is Ron Mark, owner and operator of Summerset Winery in Indianola.  And Bark Rasko, publisher of “Make Mine Wine” magazine.  Thank you so much for coming in.

Tags: industry Iowa