The Michigan Grape and Wine Industry Council, which has been serving Michigan’s wine and winegrape industry for more than 30 years, is being given a new name and an expanded mission.

In June, Gov. Rick Snyder signed legislation to create the Michigan Craft Beverage Council, taking effect Oct. 1 under a newly appointed 10-member board. In addition to funding research, marketing, education and promotion of wine and winegrapes, the intent of the new council is to offer those same services to the state’s growing craft beverage industry, including breweries, cideries and distilleries.

The Michigan Department of Agriculture and Rural Devel-opment will continue to administer the council with an MDARD representative serving as a non-voting chair on the board — currently MDARD Director Gordon Wenk. Representatives from all the craft beverage industries, as well as retail and restaurant license holders, make up the rest of the board.

Council funding
The Michigan Grape and Wine Industry Council is funded through non-retail, non-wholesale liquor license fees, such as winery, brewery and distillery licenses, but not retail license fees, such as restaurant, bar or party store licenses. The bulk of the revenue comes from out-of-state sellers into the Michigan market.

The change was prompted by pushback from the craft beer and spirits industries, which were contributing to the funding, but were not benefiting or being represented on the board.

“It’s not our goal to provide less resources on wine and for the council to be diluted on beer, but to be funded well enough to do both,” says Scott Graham, president of the Michigan Brewers Guild, who noted that the legislation was a top priority for the self-funded organization.

Graham is looking forward to additional research on barley and hops, and promotion of the craft beer industry through the Pure Michigan campaign, beer trails and other opportunities.

“The idea is to make these resources more equitable,” says Karel Bush, executive director of the current Michigan Grape and Wine Industry Council, who will continue with the new council. “It is a positive thing for these other industries. I look forward to working with all the craft beverage sectors and helping them use Michigan’s agriculture.”

However, there is a downside. The revamped council is being asked to do more with less funding than it had two years ago, when $170,000 in wholesaler fees was slashed from the budget and redirected to the Michigan Liquor Commission for enforcement activities.

Bush says that money will likely never be returned, leaving the council’s annual budget around $580,000, which gets a $200,000 bump every three years when certain fees are renewed.

The new legislation directs the council to spend half of its annual budget for research grants to support the respective industries. Most of the remaining half will fund administrative expenses, with a small amount left for marketing activities, Bush says.

Wine program cuts
“Wineries are disappointed that there are activities we will no longer be able to offer,” Bush says. “Essentially, there will be very little marketing or promotion budget for wineries, breweries or distilleries.”

The legislation restricts the use of the council’s administrative funding, which combined with the loss of wholesaler fees, results in cutting the council’s two full-time staff positions to just one half-time person to assist Bush’s full-time position.

The downsize in the council’s marketing and administrative budget affects several projects, including the annual Michigan Wine Competition, the website, the Michigan Wine Country magazine and an annual Michigan Grape and Wine Conference.

Started in 2002, the annual conference will be discontinued, at least for now. “There is no budget or enough staff for this,” Bush says. “And now that we’re the Craft Beverage Council, we can’t throw a big conference for the wine industry without including brewers and distillers.”

Until a council board is appointed (likely in October), Bush says she’s in the dark on what the priorities will be other than what is outlined in the legislation for the budget.

The wine council contributed about $30,000 for the conference, which featured educational opportunities, networking and high-profile speakers, and required the purchase of a lot of wine.

Bush says that growers may benefit from other conferences throughout the country, but it won’t be targeted to Michigan, its unique climate, growing conditions and suitable grape varieties.

Help to new growers
One of the biggest disappointments, Bush says, is the lack of help the council will be able to provide new winegrape growers and startup wineries.

“They got the most benefit and will have a hard time finding a replacement,” she says. “If they must fly to Missouri for a grape, wine and beer conference, it greatly increases their costs. With the Michigan conference, they could come for the day, go to sessions and go back the same day.”

Also, the new council does not have funding for the Michigan Wine Competition, which requires about $7,000 and many hours of labor to coordinate the 1,200 bottles of wine being presented to 25 judges in one day.

However, Bush says she sees the potential for two wine industry groups in the state to work together to offer something similar.

Michigan Wine Country magazine, which publishes 150,000 copies a year and is used extensively for marketing by wineries, will no longer be published by the council.

However, Hour Media, which has worked with the council to publish the magazine since 2005, will likely take it over, according to Bush. Content will no longer be controlled by the council, “but they [Hour Media] are very committed to continue with the same standards we had,” she says, noting a good relationship between the two.

A big unknown is the website michiganwines.com. “It’s expensive to keep websites and time-consuming to maintain,” Bush says. “Especially when you talk about changing it to encompass all those industries.” The decision will be determined by the new council.

No additional funding is planned for the council. “My ability to serve all three of those industries, including responses for help with startup and other areas of support, might take longer,” she says.

It’s hoped that the new Craft Beverage Council, like its predecessor, will be able to tap into federal Specialty Crop Block Grants to boost the availability of Michigan-grown ingredients and further expand the council’s reach.

Winegrape growers may soon vote on checkoff

There’s no doubt that Michigan’s Grape and Wine Industry Council has benefited the industry.

Since the wine council was formed in 1985, the number of Michigan wineries has grown from 14 to about 145. A study released by the council last fall showed the wine industry has a $5.4 billion annual economic impact on the state.

Some worry its replacement — the new Michigan Craft Beverage Council — will slow the industry’s progress, as the same budget will now be spread over the wine, brewing, distilling and cider industries.

Seeing this as a real possibility two years ago, Dave Miller helped form the Michigan Wine Collaborative, which has about 100 dues-paying members composed mostly of wineries and people who work in the industry.

Miller, president of the collaborative and owner of White Pine Winery in St. Joseph (a boutique winery and tasting room), says the organization is researching the possibility of imposing a self-assessment on winegrape growers — a checkoff authorized by Michigan’s Public Act 232 — to provide for research, education and promotion of Michigan’s wine and winegrape industry.

Michigan has 13,700 acres of vineyards, making it the fourth-largest grape-growing state in the U.S. The state’s commercial wineries bottle more than 2.7 million gallons of wine annually — fifth in the country. The majority of production is from Michigan-grown grapes.

“We want to enhance the sustainability and profitability of Michigan’s wine industry with support for wineries and growers,” says Miller, who obtained a doctorate in viniculture from MSU before starting his 40-acre vineyard south of Lawton in 1997.

He doesn’t bemoan the other craft beverage industries joining the council, saying they deserve to reap a benefit from the council they help fund.

The collaborative was conceived when Miller served on the Research and Education Advisory Committee for the Michigan Grape and Wine Industry Council. “We really got some great proposals and some good ideas, but lacked the funding,” says Miller, who notes that funding is now even less.

Work is underway to finalize a petition, which will need the signatures of 25% of winegrape growers, or 200, whichever is less. Once that’s completed, a workgroup will develop the proposed program. Public hearings will follow throughout the state to gather comments on the program. Miller says small presentations will start this fall, with regional meetings after the first of the year.

The proposed assessment would only be on winegrapes, not juice grapes, and 51% of growers representing 51% of the winegrape acreage must approve the referendum for it to pass. The referendum would come before growers every five years.

The proposed assessment (yet to be determined) would fluctuate based on price per ton of grapes — the higher-valued grapes would be assessed more than the lesser-valued. The governor would appoint a board to manage those funds.

Miller says the referendum may be before growers by fall 2019.

“Our goal is to leverage every dollar collected from the industry with another dollar from either Michigan State University, USDA or the state of Michigan,” he adds.