MINUTES Michigan Grape and Wine Industry Council Thursday, May 16, 2013 Bayshore Resort, Traverse City, MI

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1 Council Members Present Gordon Wenk, MDARD Paul Howland, MEDC Steve Lovejoy, Michigan State University Mark Esterman, Meijer Corp. Sharon Martin, MLCC Jeff Lemon, Lemon Creek Winery Martin Lagina, Villa Mari Vineyards Claes Fornell, Grape Grower Council Members Absent Walter Brys, Brys Estate Vineyards Greg O Niel, OK Distributors Michael Marsh, Flatout Breads MINUTES Michigan Grape and Wine Industry Council Thursday, May 16, 2013 Bayshore Resort, Traverse City, MI Others Present Linda Jones, MDARD Karel Bush, MDARD Sherri Goodreau, MDARD Brian Lillie, Chateau Chantal Liz Berger, Chateau Chantal Marie Dalese, Chateau Chantal Lee Lutes, Black Star Farms Coryn Briggs, Black Star Farms Andy Jacobson, Black Star Farms Paul Birgy, Graphic Solid Ink Dan Young, Tandem Ciders Jonathon Pack, Cherry Tree Inn & Suites Mary Winowiecki, Traverse City CVB Brad Van Dommelen, Traverse City CVB Eddie O Keefe, Chateau Grand Traverse Garrett Coggin, Grand Traverse Conservation District/MAEAP Tree Sterman, Grand Traverse Conservation District Dan Busby, MDARD/MAEAP Duke Elsner, MSU Extension Dean Johnson, Johnson Farms Heatherlyn Johnson, Johnson Farms Welcome and Introductions The meeting was called to order by Council Chair Gordon Wenk at 10:33 am. The Chair welcomed Council and guests. Agenda for the May 16, 2013 Meeting MOTION: JEFF LEMON MOVED THAT THE COUNCIL APPROVE THE AGENDA FOR THE MAY 16, 2013 MEETING. STEVE LOVEJOY SECONDED. MOTION CARRIED UNANIMOUSLY. 1

2 Minutes of the January 10 and February 15, 2013 Meetings MOTION: STEVE LOVEJOY MOVED THAT THE COUNCIL APPROVE THE MINUTES OF THE JANUARY 10 AND FEBRUARY 15, 2013 COUNCIL MEETINGS. MARTY LAGINA SECONDED. PAUL HOWLAND ASKED THAT THE SPELLING OF HILFINGER BE CORRECTED IN THE JANUARY MINUTES. MOTION CARRIED UNANIMOUSLY. The spelling of Steve Hilfinger s name was verified and was corrected in the January minutes. Council Member Comments Mark Esterman stated that sales from Michigan wines are up. Mark also stated that there is nothing (regarding wine) in South Africa that rivals Michigan, from a scenic point of view. Sharon Martin reported that the Senate approved the Farmer s Market bill that will allow small wineries to sell at the markets. To be eligible, wineries must produce less than 5,000 gallons. Sharon feels that there needs to be discussion about the virtual wineries that are opening. This discussion will be moved to the Business Development Committee portion of the meeting. Steve Lovejoy announced that Doug Buhler has been named Director of Ag Bio Research. Michigan State University has approved three classes in brewing and distilled beverages for the fall of MSU is planning to tear down Morrill Hall. AG Hall will be renamed the Morrill Hall of Agriculture. Paul Howland congratulated the staff on a successful conference, pre-conference and Showcase events. The Leelanau Peninsula tour that Paul recently participated in is something he would like to see more of. Jeff Lemon noted that he appreciates the opportunity to visit Traverse City. He noted that the 2012 vintage was great and that the growth in the vineyards in Southwest Michigan is already between 2 and 8. Mother Nature did spring right this year. Claes Fornell has been traveling extensively and flew in from New York last night. During his trip he noted that the Chinese are buying up vineyards around the world. He also observed in person that the Pure Michigan campaign is running in New York. Marty Lagina said the cold March weather was great for the vineyards. The late frost did little damage. Marty went to Germany with the O Keefe s from Chateau Grand Traverse. They visited a 900-year-old vineyard, Schloss Johannesburg. They had a superb visit there as Sean O Keefe went to school with the winemaker there. Gordon Wenk was recently on the Old Mission Peninsula participating in an awards ceremony for all of the vineyards that are MAEAP verified. Governor Rick Snyder presented plaques recognizing seven wineries and three vineyards on Old Mission Peninsula that have completed MAEAP verification. 2

3 A $6 million Strategic Growth Initiative Grant program, to be administered by the Michigan Department of Agriculture & Rural Development is being considered by the Legislature for the FY 14 budget. There have been six regional meetings to learn about needs of the food processing industry. The program is intended to support adding value to Michigan agricultural products. Public Comment The following people introduced themselves to the Council: Garrett Coggin, MAEAP Dan Busby, MAEAP verifier Paul Birgy, Graphic Solid Ink Dan Young, Tandem Ciders Dan also read a letter of interest asking that the Council add cideries to the promotional materials that the Council distributes to the public, including the Michigan Wine Country magazine (Attachment A) and michiganwines.com website. Marie Dalese, Chateau Chantal Liz Berger, Chateau Chantal Tree Sterman, CT Conservation District Gordon facilitated a discussion on a request from Mike Beck (Attachment B) on behalf of Michigan s hard cider producers that the Council revisit their policies regarding promotional support for the growing hard cider industry. It was noted that the Council s eligibility policies as recorded in the Administrative Practices are the policies that affect which businesses are promoted by the Council. Mark Esterman reported that the Promotion Committee had discussed the issue at their May 15 meeting and felt that product labeled as cider differed in significant ways from wine and it might be challenging to incorporate cider easily into the Council s promotional activities. Paul Howland indicated that the Business Development Committee had a similar reaction at their April 19 meeting, where this topic was discussed. The Council discussed the matter at great length. MOTION: STEVE LOVEJOY MOVED THAT THE COUNCIL NOT MAKE ANY CHANGES TO ITS ELIGIBILITY POLICIES. MOTION DIED FOR LACK OF SUPPORT. The Council requested that more research be conducted by staff before they would be prepared to make a change in policy. Specifically, the Council requested additional information regarding: Review of the federal and state licenses for hard cider producers. Interpretation of the Council s founding statute with respect to defining wine (would require further discussion with MLCC) Discussion with the Michigan Apple Committee regarding their views on the growth of the Michigan hard cider industry and the support the hard cider producers have received or might receive from the Committee. 3

4 A review of other states regarding how they classify hard cider for licensing and promotional purposes. MOTION: MARTY LAGINA MOVED THAT THE COUNCIL NOT CHANGE THE ELIGIBILITY CRITERIA TODAY. STEVE LOVEJOY SECONDED. MOTION CARRIED. MOTION: STEVE LOVEJOY MOVED THAT THE COUNCIL TABLE THE PREVIOUS MOTION UNTIL THE AUGUST MEETING. JEFF LEMON SECONDED. MOTION CARRIED. Staff Report The following reports were given by Linda Jones: Constitution Hall is going through a remodeling process. Grape and Wine offices will have a temporary location through the summer. Linda attended the WineAmerica meeting in Washington. WineAmerica addresses federal issues for the industry. Burgdorf s Winery, Lemon Creek Winery and Modern Craft Winery have all signed up to participate in the freeway sign program, using the grape cluster icon. There were 289 attendees at the Michigan Grape & Wine Conference. There were 33 wineries and 78 winery attendees. The cost to the Council was approximately $15,000. A more detailed report will be provided to the Council prior to the August meeting. The 2014 Michigan Grape and Wine Conference is scheduled for February 22-24, 2014 at the Grand Traverse Resort in Acme. The Council Chair recessed the meeting at 12:00 for lunch. During lunch there was a MAEAP presentation to Johnson Farms of Old Mission Peninsula. The meeting reconvened at 12:41pm. Dr. Dan McCole gave a presentation on Understanding Michigan Tasting Room Visitors. Promotion Committee Report - Mark Esterman The Committee met on May 15 at the Bayshore Resort. Topics included: The Michigan Wine Country magazine should have a welcome from the Governor. The cover of the magazine needs to change. The 2012 and 2013 covers were similar. Maybe have a contest of local artists. Vintage Michigan has over 3,000 members Promote Michigan Wine Month earlier There will be a cap of 30 wineries at the Showcase event. The Michigan Wine Competition will be no longer accept spirits entries. 4

5 The Committee recommended adding a market research element to their list of priorities (Attachment C). MOTION: MARTY LAGINA MOVED THAT THE COUNCIL ACCEPT THE RECOMMENDATION OF THE PROMOTION COMMITTEE TO ADD LANGUAGE ABOUT RESEARCH TO THE PRIORITIES OF THE PROMOTION COMMITTEE. MARK ESTERMAN SECONDED. MOTION CARRIED. Business Development Committee Report - Paul Howland Paul reviewed the Business Committee Report (Attachment D) with the Council and asked for their support. The report included two memos from Linda Jones that were distributed to the Council in advance of the meeting: 1. Public Policy Document on Wine Laws 2. Reforms to Michigan Wine Laws MOTION: PAUL HOWLAND MOVED THAT THE COUNCIL ACCEPT THE REPORTS OF THE BUSINESS DEVELOPMENT COMMITTEE IN REGARD TO LIQUOR REGULATIONS AS THEY PERTAIN TO WINERY REGULATION. STEVE LOVEJOY SECONDED. MOTION CARRIED. MOTION: PAUL HOWLAND MOVED THAT THE DEPARTMENT OF AGRICULTURE AND RURAL DEVELOPMENT SUPPORT THE PASSAGE OF BILLS 216, 79 AND 279. JEFF LEMON SECONDED. MARK ESTERMAN ABSTAINED. MOTION CARRIED. Sharon Martin brought back to the table the discussion of virtual wineries that do not have manufacturing capabilities. MLCC Enforcement Division feels that this is an issue that needs further discussion. MOTION: PAUL HOWLAND MOVED THAT THE GRAPE AND WINE INDUSTRY COUNCIL RECOMMEND TO THE DEPARTMENT OF AGRICULTURE AND RURAL DEVELOPMENT THAT THEY DISCUSS REGULATORY ISSUES WITH THE MICHIGAN LIQUOR CONTROL COMMISSION AND PRESENT RECOMMENDATIONS LATER IN MARK ESTERMAN SECONDED. MOTION CARRIED. Chairman Gordon Wenk noted that a meeting between MDARD and MLCC staff is scheduled for early June to discuss these and other items. Viticulture and Enology Research and Education Advisory Committee Report - Jeff Lemon The REAC Committee is meeting on May 17, 2013 in Traverse City. Lee Lutes spoke about the Industry Supplemental Funding Initiative that he and Dave Miller are proposing to the industry. They will be holding meetings in the Northwest and Southwest parts of the state to introduce this fund raising package. The money raised would supplement the funds that the Council provides for viticulture and enology 5

6 research. The Michigan Wine Foundation is being considered as the collection point for funds collected. (Attachment E) Eligibility Review Linda Jones reported that she has received an eligibility application from Mackinaw Trail Winery in Petoskey and that they meet the criteria set forth by the Council. MOTION: JEFF LEMON MOVED THAT THE COUNCIL APPROVE MACKINAW TRAIL WINERY OF PETOSKEY AS A PRODUCER OF MICHIGAN WINE FOR PROMOTIONAL PURPOSES OF THE COUNCIL. MARTY LAGINA SECONDED. MOTION CARRIED. New Business Brian Lillie reported that he participated in an application from the Northwest Michigan Council of Governments for a Specialty Crop Block Grant for a pilot training program; Training for Tasting Rooms (Attachment F). The Council provided a letter of support for the application. Liz Berger reported to the Council that the Michigan Wine Foundation is a 501(c)3 nonprofit, which was established as a means to help collect revenue and pay expenses for training seminars for the industry. She notes that the Foundation has the potential to serve other roles for the benefit of the industry. Wine grape production was discussed by members of the Council and industry. The Chair asked if the Council should be doing more to help get more vines in the ground. Jeff Lemon felt that the wineries themselves should be what drive the growers to produce more fruit. The growers need to discuss with the wineries what grapes need to be grown to meet the demands of the industry. Adjournment MOTION: MARTY LAGINA MOVED THAT THE MEETING BE ADJOURNED. MARK ESTERMAN SECONDED. MOTION CARRIED UNANIMOUSLY. The meeting was adjourned at 2:55 p.m. The next meeting of the Michigan Grape & Wine Industry Council is scheduled for August 22, 2013 in Lansing, MI. The following documents are on file in the Michigan Grape and Wine Industry Council office and can be obtained upon request: A. Remarks by Dan Young, Tandem Ciders regarding the MI hard cider industry. B. Letter from Mike Beck regarding the Council s promotion of hard ciders C. Promotion Committee Priority Language Addition D. Business Development Committee Report E. Letter to wine industry from Lee Lutes and Dave Miller regarding industry fundraising to support the future growth of the industry. F. Training for Tasting Rooms - Brian Lillie 6