MINUTES Michigan Grape and Wine Industry Council Thursday July 27, 2017 Kellogg Hotel & Conference Center, East Lansing, MI

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1 MINUTES Michigan Grape and Wine Industry Council Thursday July 27, 2017 Kellogg Hotel & Conference Center, East Lansing, MI Council Members Present: Gordon Wenk, Michigan Department of Agriculture & Rural Development Dustin Stabile, Mackinaw Trail Winery Richard Rinvelt, Public Member Michael Brenton, Public Member Doug Buhler, Michigan State University Deb Burgdorf, Burgdorf s Winery Sara Weber, Michigan Liquor Control Commission Paul Howland, Michigan Economic Development Division Rick Lopus, Great Lakes Wine & Spirits Steve Massie, Meijer Corp Taylor Simpson, Good Harbor Vineyards Matt Moersch, Round Barn Winery Others Present: Sherri Goodreau, Michigan Grape & Wine Industry Council Karel Bush, Michigan Grape & Wine Industry Council Jenelle Jagmin, Michigan Grape & Wine Industry Council Peter Anastor, MDARD Chris Cook, Superintendent of Michigan Wine Competition Jeff Lemon, Lemon Creek Winery Welcome and Introductions The meeting was called to order by Council Chair Gordon Wenk at 11:00 a.m. He commented on another great Michigan Wine Competition. Congratulations to all of the winners and great work by staff in organizing. The Gold Medal Wine Reception and Awards Ceremony will be this evening starting at 5:00. Agenda for the July 27, 2017 Meeting MOTION: RICK LOPUS MOVED THAT THE COUNCIL APPROVE THE AGENDA FOR THE JULY 27, 2017 COUNCIL MEETING. RICHARD RINVELT SECONDED. MOTION CARRIED UNANIMOUSLY. Minutes of the May 4, 2017 Meeting MOTION: PAUL HOWLAND MOVED THAT THE COUNCIL APPROVE THE MINUTES OF THE MAY 4, 2017 COUNCIL MEETING. RICHARD RINVELT SECONDED. MOTION CARRIED UNANIMOUSLY. Introductions and Council Member Comments Dustin Stabile, Mackinaw Trail Winery - I am really excited about the competition. Two wineries from the Tip of the Mitt AVA took best of show. 1

2 Deb Burgdorf, Burgdorf s Winery - The winery is bottling. The winery took home awards from the competition. Matt Moersch, Round Barn Winery - has been busy with the acquisition of Tabor Hill Winery and Restaurant. Most Tabor Hill staff stayed on. We are busy moving equipment. I will report on the Michigan Wine Collaborative later in the meeting. A shout out to Sara Weber and her team from Liquor Control. Great communication with them helped make the licensing portion of the sale possible. Paul Howland, MEDC - Pure Michigan is looking for content for their website. Jeff Mason is the new Director for MEDC. Paul saw the Burgdorf s Winery display at the Mackinac City Welcome Center while he was traveling with visitors from Switzerland. Sara Weber, MLCC - Sara will be taking over for retiree Sharon Martin as the representative for the Michigan Liquor Control Commission. Rick Lopus, Great Lakes Wine & Spirits - Business is exploding. Richard Rinvelt, Public Member - Best Michigan Wine month that he has been a part of. Lots of media and articles. Taylor Simpson, Good Harbor Vineyards - The wineries are bottling, bottling, bottling. Weddings galore, and the wineries are busy with summer traffic. Michael Brenton, Public Member - Last weekend was the City of Riesling in Traverse City. Attending were New York winemakers and writers. They were very impressed. Doug Buhler, MSU - Yesterday was the Viticulture Field Days in Benton Harbor. Above average crowd in attendance. MSU is evaluating staffing for viticulture/enology. Filled the position up north, now looking at the southwest region. Discussion on weed science/control on perennial crops. Ag Innovation Day (formerly Ag Expo on campus) moves around the state. This year, in Lake City, 2018 will be at SWMREC in Benton Harbor. Looking for a diverse program could involve some of council. Steve Massie, Meijer Corporation - Meijer is doing a nice seasonal fall play with Round Barn Winery. Local spirits are doing really well. Wine is doing well but a little softer than expected with sales. Public Comment on Agenda Items There was no public comment on agenda items. Public attendees introduced themselves: Peter Anastor, Division Director for Agriculture Development at MDARD Kerry Krone, Manager with MLCC Jenelle Jagmin, Grape & Wine staff Sherri Goodreau, Grape & Wine staff Karel Bush, Program Manager, Grape & Wine Business Development Committee Gordon Wenk Legislative update: Legislators are on recess for the summer. Companion bills have been introduced in House and Senate that reorganize the Grape & Wine Industry Council to the Craft Beverage Council. The House bill was voted out of committee. They are still working on the language. Currently, the 2

3 bill states that the board would be made up of one large and one small brewer, one large and one small distiller, three winemakers, one retailer and one restaurant. There are no grower, public or wholesaler representatives, and no representatives from other agencies that are now represented on this council: MEDC, MLCC and MSU. The legislation restricts the use of the budget; MDARD has taken the position that the Council should be allowed to appropriate spending. The Michigan Wine Collaborative and the Michigan Wine Producers Association are working together to form an industry position related to the legislation. Matt Moersch has suggested using excise taxes for additional funding. Another bill was introduced that would allow MLCC to divert funds from the General Fund to the Craft Beverage Council. The State budget office is not supportive of using General Fund for this purpose. The question was raised whether MLCC could increase license fees to increase funding for the Council. Kerry Krone responded that legislators would have to open the Michigan Liquor Control Commission Act to increase license fees. The last increase was in the 1970s. Business Development Committee: Currently the Business Development Committee is without a chair. It was initially created to guide the council with winery eligibility requirements. The Committee also provided guidance regarding: Hard cider eligibility Wine trail eligibility Hospitality training Legislative issues Zoning issues Discussion took place on the need to continue to have this committee. It was determined that the committee should stay intact, and be utilized when needed. Viticulture and Enology Research and Education Advisory Committee (REAC) Dustin Stabile reported as Chair of the REAC Committee. Proposals for research projects went out in June and are due August 15, There will be a committee meeting on September 12, to review proposals and make recommendations for funding. With a reduction in funding for 2018, the committee will give priority to continuing projects funded in FY17. Consumer and Trade Promotion and Education Committee Report Taylor Simpson, chair of the committee, advised the council that Jenelle will report on the Economic Impact study as she is more involved with it. The survey was sent to every business that holds a small winemaker s license. John Dunham & Associates also completed a national study for WineAmerica. Information for Michigan from the WineAmerica report is as follows: o 40,000 jobs o $624 million in taxes generated, including local, state and federal o Economic impact for Michigan wine grape and wine Industry is $4.5 billion per year o Total economic impact for U.S. is $183 billion o Michigan ranks #8 in the nation for economic impact. The Michigan study will include: o Migrant labor usage 3

4 o Vineyard acreage expansion o Employees o Production of beer, hard cider, spirits The Michigan study will also include an analysis of the hard cider industry, which has not been done anywhere in the country. The final report is due to MDARD by September 30, Part of the Pure Michigan partnership has been completed (May-June), and Passions Page will be live in September-October. Committee is waiting for budget to be approved for 2018 before determining how to move forward. In 2016, the Council approved $50,000 funding for a Wine Camp for FY18, but with the current legislation, the committee is not sure what direction to take. There is an alternative option, which would cost about $5,000 but we would lose some control. Wine Camp is a wine tasting experience where food and travel writers are invited to Michigan to taste Michigan wine and food. They would return to their home states and write about their wine experience here. Similar camps have taken place throughout the country. Some wine regions cover the expenses, others charge the writers to attend. Break for lunch at 12:20 pm. Council reconvened at 1:05 pm. Eligibility Review Karel reported she received applications from two wineries: Townline Ciderworks and Chateau Lake Charlevoix. Chateau Lake Charlevoix has applied and is waiting on their Food Establishment License from MDARD. Once approved they will meet the eligibility requirements set forth by the Council. Townline Ciderworks meets the requirements at this time. MOTION: DUSTIN MOVED THAT THE COUNCIL APPROVE TOWNLINE CIDERWORKS AS A PRODUCER OF MICHIGAN WINES FOR PROMOTONIAL PURPOSES OF THE COUNCIL. CHATEAU LAKE CHARLEVOIX WILL BE APPROVED ON THE CONTINGENCY THAT THEY RECEIVE THEIR FOOD ESTABLISHMENT LICENSE FROM MDARD. MICHAEL BRENTON SECONDED. MOTION CARRIED UNANIMOUSLY. The Council promotes 132 wineries to date. Michigan Wine Collaborative Matt Moersch - Dave Miller is President of the Michigan Wine Collaborative. There is a lot of momentum for the organization. We are enhancing the website to drive membership. We are working on a position letter regarding the Craft Beverage legislation, and investigating the possibility of a PA 232 check-off program. Heather Fortin is working on a grant to hire a possible full-time employee. A Collaborative member who is also MAEAP verified becomes a member of the Great Lakes Sustainable Wine Alliance. Peter Laing is helping to develop the winery sustainability portion. Hoping to put processes in place to be able to bring to other states, but we re not there yet. This is a way to recognize efforts in Michigan to protect the land. Tom Petzold, 10 Hands Vineyard is the research and education lead. There are concerns about Lake Michigan College not having a qualified instructor for their wine making classes. The industry is trying to help them but they are meeting resistance. 4

5 Discussion took place among the members of the council. The Council has issued a grant for a microvinification project at the college. To date, no payments have been made to this grant. Because the grant agreement is with Michigan State University, Doug Buhler asked that the Council submit a letter to MSU regarding their concerns regarding the grant and MSU will investigate. MOTION: PAUL HOWLAND MOVED THAT NO ADDITIONAL PAYMENTS WOULD BE MADE TO THE MICROVINIFICATION GRANT UNTIL AN INVESTIGATION IS CONDUCTED REGARDING THE WINEMAKING PRACTICES OF THE LAKE MICHIGAN COLLEGE WINE PROGRAM. RICK LOPUS SECONDED. MOTION CARRIED UNANIMOUSLY. Staff Reports Chris Cook gave the competition report: Wine Competition, Chris Cook - New booklet with judges was created to celebrate 40 th anniversary of the Michigan Wine Competition. In 2016, 27 dry reds competed in the Best of Class category. This year 17 wines went into the same category. The dry white Best of Class round had 20 competing against each other, and 25 in the semi-dry white class. In light of these very large groups of Gold medal wines, we ll revise our procedures for the future to be sure all wines are evaluated in the best possible manner. Many notable judges every year. Rick Lopus served as a judge. We have an honorary seat on each panel. Nancie Oxley from St. Julian Winery served as honorary judge, as did Gordon Wenk. Karel Bush reported on other staff activities: Wine Grape Acreage Report (Attachment A) increase to 3,050 acres of wine grapes. Michigan GROWN, Michigan GREAT Restaurant Award-supportive of Michigan restaurants using Michigan products in their business. Karel is on the evaluation committee. They received 20-plus entries for their first year. Next year, Karel plans to send the application form to the wineries and Council members to distribute to restaurants of their choice Value added grant award - Campbell Milarch Vines received $140,400. Kerm Campbell from Black Star Farms is an owner of the vineyards. Sam Simpson from Good Harbor Vineyards received $150,000 grant for a mobile bottling line. Conference plans - Kalamazoo Radisson, Feb 26-March 2, 2018 Dashboard (Attachment B) 2017 Budget Update (Attachment C) There was an increase in number of licenses, which increases our budget. Karel explained budget breakdown. Council recessed at 2:40 pm Council reconvened at 2:50 pm New Business Karel presented a draft budget for fiscal year 2018 to the Council for review, discussion and approval (Attachment D). 5

6 MOTION: MATT MOERSCH MOVED THAT THE COUNCIL APPROVE THE 2018 BUDGET AS PRESENTED. DUSTIN STABILE AND RICHARD RINVELT SECONDED SIMULTANIOUSLY. MOTION CARRIED UNANIMOUSLY. Adjournment MOTION: MATT MOERSCH MOVED THAT THE COUNCIL ADJOURN. DUSTIN STABILE SECONDED. MOTION CARRIED UNANIMOUSLY. The meeting was adjourned at 4:25 p.m. Attachments A) Vineyard Acreage Report B) Dashboard C) FY17 Budget Update D) FY18 Budget 6