Sportzfun.com. Source: Joseph Pine and James Gilmore, The Experience Economy, Harvard Business School Press.

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1 National Extension Tourism Conference Park City, Utah Center for Agribusiness and Economic Development June 15 th, 2009 or Agribusin siness and Econ onomic Deve Center fo velopment

2 What does Agritourism Have to provide? Sportzfun.com The Experience Economy Experiences must provide a memorable offering that will remain for a long time Source: Joseph Pine and James Gilmore, The Experience Economy, Harvard Business School Press.

3 What do you think of when you hear Nature Based Tourism in Georgia?

4 Fishing

5 Hunting

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7 Georgia Agritourism We have Identified d over 650 agritourism/nature i based tourism operations in Georgia. Contributes to over $100,000,000 million annually Cut/Pick your Own (124) Alligator farm Butterfly farm Clam farm Bees Winery (24) Petting Zoo Maze (20) P-Y-O (209) Equine (35) Hunting /Fishing (250) Ham processing facility (1) Historic Farm structures

8 Impact of Georgia Wineries

9 Background Information Georgia s wine industry began in late 1970 s and early 1980 s. Georgia currently has 24 wineries scattered throughout the state, many of them primarily located in the northeastern Georgia. - This is known as the North Georgia Wine Highway. Two distinct regions demarcation is the GNAT line Northern region above gnat line Southern region below gnat line Pierce s disease prevents lower elevations from growing viniferous grapes. Generally, Georgia s northern wineries i produce more traditional vinifera wine in addition to muscadine wine, whereas the wineries in the southern region of the state generally produce wine and other products derived from muscadines or other fruits. Increased wine consumption combined with growth in agritourism is expected to lead to a doubling of wineries across the state over the next 10 years. According to the Georgia Farm Gate Fruits and Nuts Report, Georgia had 689 acres of wine/juice grapes in 2007 with a total value of $3,102,349 (Boatright and McKissick 2008).

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12 What We Did The Center for Agribusiness and Economic Development (CAED) conducted two surveys in the summer and fall of 2008 to obtain detailed information on wineries and winery visitors.

13 Surveys The first survey, entitled Georgia Winery Survey, - collected detailed operating cost data as well as sales data (winery, gift shop, restaurants, etc ) Asecondsurvey survey, Georgia Winery Visitor Survey, - collected detailed expenditure and demographic data..

14 Winery Survey Methodology 24 wineries i registered with the State- had 25 but??? Personal visits and phone calls were made to all 24 wineries to explain the study objectives and to try to ensure participation. Wineries were mailed a copy of the Georgia Winery Survey. Wineries were mailed packet of 50 visitor surveys - the packet contained a business reply envelope which allowed the wineries to return the Georgia Winery Survey to the CAED at no cost. Wineries that did not return phone calls and those who failed to respond to s were given two follow up phone calls a week later. A total of 17 wineries responded to the survey. Incomplete or surveys missing critical data were followed-up with a call in an attempt to capture this information.

15 Data The Georgia Winery Survey began on July 9, 2008 and ended on October 26, A total of 17 Georgia wineries completed surveys. A total of 248 Georgia Winery Visitor Surveys were completed by visitors. The Georgia Winery Survey started on June 27, 2008 and ended on October 24, Eight Wineries participated in this survey.

16 Visitor Information 84% were Georgia residents Average party size was 2.7 people 56% percent of visitors were at the winery as part of a trip to the area 58% were e spending the night in the area Spend an average of 3 days in the area On average spend $49 in the area per person daily.

17 Distance Winery Visitors Traveled Miles Percentage Over The majority of visitors (81.8%) travel 100 miles or less to visit the wineries.

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19 Attractions That Draw Visitors to the Area Other than the Winery Reason for Visiting Winery Percentage Georgia Resident Non-Georgia Resident All Visitors Primary Reason Secondary Reason Attraction Percentage Scenery 26.7 Outdoor recreation/ Camping 26.7 Events 24.4 Culture 17.8 Other 4.4

20 Winery Survey data Variable All GA NGWH Non-NGWH Number of Wineries Surveyed Years in Operation Mean Median Experience Seasonality Yes 94% 100% 87% No 6% 0% 13% Seasonal Traffic Patterns Summer 23% 29% 19% Fall 37% 38% 36% Winter 20% 11% 27% Spring 19% 22% 18% Annual Visitors it Mean 9,863 35,943 15,271 Median 4,639 8,000 3,500

21 Visitor Percentage by Category All NGWH Non-NGWH Winery visitors 70% 68% 73% Special event visitors 14% 17% 10% Gift shop visitors 9% 0% 17% Restaurant visitors 7% 15% 0% Lodging g or other amenities 0% 0% 0%

22 Retail Wine Sales and Production Pi Price Ranges All NGWH Non-NGWHNGWH Less than $10 per bottle 12% 0% 24% $10 - $15 per bottle 42% 26% 58% $16 - $25 per bottle 35% 53% 18% Above $25 per bottle 11% 21% 0% Production Capability for Maximum Number of Cases (Annually) Mean 6,418 7,625 5,954 Median 5,000 6,250 5,000 Georgia wineries range in production capacity from 675 to cases Georgia wineries range in production capacity from 675 to 18,000 cases produced annually.

23 Future Plans More Agritourism Category All NGWH Non-NGWHNGWH Lodging or other amenities Bottling equipment Retail facility (wine tasting and retail) Restaurant facility Event facility Wine storage equipment Acreage devoted to grapes Wine processing equipment Gift shop facility

24 Expenses/Expenditures Number of Cases sold and total Revenue Generated What were the expenditures in your winery over the last 12 months in each of the following areas? Total employee compensations (all wages and benefits): $ Total number of employees included: # Management and administration employees: $ Number of employees included: d # Production employees : $ Number of employees included: # How much hdo you pay in property taxes for winery related operations $ This question is critical to estimating the impact of the Georgia Winery industry on the local and state economy. What is your 2007 gross revenue (total revenue for the year including wine sales and other events) for your winery? Total (including events, weddings, concerts, food service, lodging, amenities, etc): $ Events only (weddings, concerts, food service, lodging, amenities etc): $

25 Lodging Expenditures Dollars per Day Total Dollars Category All NGWH All NGWH Hotel/Motel ,960,259 1,572,855 Bed & Breakfast ,193, ,616 RV/Camping , ,373 Other , ,539 Friends/Relatives NA NA NA NA Total 4,241,658 3,403,383 58% of visitors surveyed indicated they were going to spend the night in the area.

26 Visitor Days The winery surveys were used to derive a total winery visitor population. All Georgia Wineries - 236,723 visitor days NGWH Wineries- 172,250 visitor days

27 Area Lodging 58% of visitors surveyed indicated they were going to spend the night in the area. Percent Visitor Days at Facility Category All NGWH All NGWH Hotel/Motel ,548 36,547 Bed & Breakfast ,030 14,466 RV/Camping ,591 6,091 Other ,365 24,364 Friends/Relatives ,110 25,126 Total , ,594

28 Other Visitor Area Expenditures Other Visitor Expenditures ($/Person/Day for All Visitors) Restaurants $14 Grocery $3 Souvenirs $7 Fuel $11 Bottles of Wine $10 Entertainment $4

29 Other Visitor Spending Results $/Person/Day Total ($) Category All Visitors NGWH Visitors All Visitors NGWH Visitors Restaurant ,202,917 2,394,060 Grocery , ,317 Souvenirs ,564,392 1,125,099 Fuel ,688,117 1,982,475 Entertainment ,017, ,986 Total 9,231,016, 6,813,937,

30 Three Different Impacts One Grape production Two Wineries minus grape production Visitor Expenditures

31 Impact of Grape Production for GA Wineries Direct Indirect Total Output ($) 3,159,841 3,465,724 6,625,565 Labor Income ($) 1,706,075 1,281,004 2,987,079 Employment *Value Added ($) 215,608 2,041,895 2,257,499 State Taxes ($) 160,401 Local Taxes ($) 154,613 Sum of Taxes ($) 315,014 *Value added is output minus purchase inputs, value added consists of p p p, profits, net equity exchange, and property income. Property income is a negative value in IMPLAN for fruit farming which explains why the value added component is low

32 Economic Impact of Georgia Wineries, Excluding Grape Production Direct Indirect Total Output ($) 11,148,881 6,736,007 17,884,883 Labor Income ($) 1,688,747 2,229,160 3,917,907 Employment Value Added ($) 2,098,841 3,532,857 5,631,699 State Taxes ($) 377,998 Local Taxes ($) 363,148 Sum of Taxes ($) 741,146 *Value added is output minus purchase inputs, value added consists of profits, net equity exchange, and property income.

33 Economic Impact From Winery Visitors Direct Indirect Total Output ($) 13,472,674 6,807,242 20,279,916 Labor Income ($) 3,498,666 2,241,078 5,739,744 Employment Value Added ($) 5,231,672 3,850, ,082, State Taxes ($) 631,750 Local Taxes ($) 545,271 Sum of Taxes ($) 1,177,021 * import substitution and exports 83 7% of respondents are Georgia residents This is import substitution and exports. 83.7% of respondents are Georgia residents. This is known as import substitution which captures the spending that would otherwise be spent in other states if Georgia wineries did not exist. The other 16.3%, which are outof-state residents, are exports. Exports capture the out-of-state visitors

34 Total Economic Impacts of Grape Production, Wineries, and Visitor Expenditures Grape Winery Visitor Total Output ($) 6,625,565 17,884,883 20,279,916 44,790,364 Labor Income ($) 2,987,079 3,917, ,739, ,644,730 Employment Value Added ($) 2,257,499 5,631,699 9,082,056 16,971,254 State Taxes ($) 160, , ,750 1,101, Local Taxes ($) 154, , ,271 1,032,640 Sum of Taxes ($) 315, ,146 1,177,021 2,134,161

35 Multipliers Grape Wineries Visitor Output Employment Wineries- the 1.60 indicates for every dollar of output (sales) by the wineries, $1.60 of economic activity occurs in the state s economy. The same interpretation applies for employment. For every job directly employed by the wineries, 1.34 jobs are involved throughout Georgia s economy.

36 Adding Value to Georgia s Agricultural Economy Through Research and Extension Agribu for Center usiness and Econo lopment omic Develo edu College of Agricultural & Environmental Sciences