MINUTES Michigan Grape and Wine Industry Council Thursday, December 1, 2016 Round Barn Public House, Baroda, MI

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1 MINUTES Michigan Grape and Wine Industry Council Thursday, December 1, 2016 Round Barn Public House, Baroda, MI Council Members Present: Gordon Wenk, Michigan Department of Agriculture & Rural Development Jeff Lemon, Lemon Creek Winery Richard Rinvelt, Public Member Michael Brenton, Public Member Vance Baird, Michigan State University Matt Moersch, Round Barn Winery Bill Kratz, Michigan Economic Development Corporation Brien Fox, Henry Fox Sales Steve Massie, Meijer Corporation Council Members Absent: Martin Lagina, Mari Vineyards Taylor Simpson, Good Harbor Vineyards Sharon Martin, Michigan Liquor Control Commission Others Present Sherri Goodreau, Michigan Grape & Wine Industry Council Karel Bush, Michigan Grape & Wine Industry Council Jenelle Jagmin, Michigan Grape & Wine Industry Council Bonnie Rinvelt, guest Peter Anastor, Michigan Department of Agriculture & Rural Development Welcome and Introductions The meeting was called to order by Council Chair Gordon Wenk at 9:39 a.m. Matt Moersch welcomed the Council to the Round Barn Public House and gave a brief history of Round Barn Winery and offered to host a tour for the Council at the end of the meeting. Agenda for the December 1, 2016 Meeting MOTION: JEFF LEMON MOVED THE COUNCIL APPROVE THE AMENDED AGENDA FOR THE DECEMBER 1, 2016 MEETING. MICHAEL BRENTON SECONDED. MOTION CARRIED UNANIMOUSLY. Minutes of the AUGUST 4, 2016 Meeting MOTION: MICHAEL BRENTON MOVED THE COUNCIL APPROVE THE MINUTES OF THE AUGUST 4, 2016 MEETING. STEVE MASSIE SECONDED. MOTION CARRIED UNANIMOUSLY. Introductions and Council Member Comments Matt Moersch- Round Barn experienced a nice harvest, some varieties were light, most were great. They have hired a new winemaker from Walla Walla. Richard Rinvelt- He and Bonnie have been traveling. They went to Cuba, a small developing country with people living in the 50 s and 60 s. Richard did some Michigan traveling as well, including 3 North Vines and Lexington Brewery and Winery during a trip with the Governor. 1

2 Michael Brenton- He and Deb have been enjoying Traverse City. They spent 4-5 days touring Finger Lakes, in New York State and evaluated a lot of wines. Reaffirmed Michigan isn t taking second to anyone. Brien Fox- Wholesale business is healthy. The craft beer sales seem to be slowing. They are expecting changes with the new presidency. Tax reforms are coming. Vance Baird is representing MSU in place of Doug Buhler. The new dean is on campus from Ohio State. There have been three new faculty members hired. They are searching for a grape educator for Northwest station. This position will be 100 percent grape education. Matt Moersch commented that the Michigan Wine Collaborative was asked to help in the search for a grape educator. Jeff Lemon- It rained the last 14 days in August, which was a challenge. October was great for harvest, and tourism traffic has been great this fall. Brewery integration with wineries is working well. Winter is supposed to be warmer than normal Steve Massie-This is his first meeting of the Council. Meijer is opening 7-10 stores a year, the newest ones are in Escanaba and Alpena. Meijer is committing to grow fresh and alcohol is included in that mission, by buying local. Wine up 9 percent. Growth between wine and spirits is robust. Average price is $9 per bottle of wine and they expect it to go up. They are merchandising wine better for example, by placing a display in the meat section and other areas of the store. Bill Kratz was a great year for Michigan s economy and 2017 should be the same. Skilled labor is in great demand. Gordon Wenk-Gordon spoke at the National Conference for State Liquor Administrators in Traverse City in October. There were approximately 200 attendees from the Midwest and Western states, including Alaska and Hawaii. Gordon and Karel Bush attended the WineAmerica meeting in Newburg Oregon in early November. While there, they visited four wineries. Public Comment on Agenda Items The public had no comment on agenda items. Business Development Committee Report Senate Bill 929, which will take the wholesaler fees from the Council budget and give it to Liquor Control for enforcement, will most likely pass. The Council received a one-time general fund appropriation of $170,000 to replace the lost funding. House bill 5025 would change the structure of the Council by adding the craft brewers and distillers and rename the council to the Michigan Craft Beverage Council. This bill is currently in its third reading, with no scheduled hearing of the Senate at this time. Richard Rinvelt asked whether there would be additional funding to allow the Council to serve a larger industry. Gordon Wenk responded that there is no additional funding allocated. Karel reported that the Michigan Grape & Wine Conference will host a hospitality training for tasting room servers. The training will include customer service training, TAM and wine fluency training. The hospitality training was initiated by a Specialty Crop Block Grant in 2013, and a 2

3 booklet was produced using the grant money. Tom Smith from the VESTA program at MSU has come onboard to create a credential for completion of the training. The Council will subsidize the cost of training at the conference to help fulfill the goal of the Council s strategic plan. Discussion took place over ownership of the training for the future as well as administration costs. Matt Moersch felt that the trails could possibly subsidize some of the costs and the Michigan Wine Collaborative could be the administrator. Bill Kratz also informed the Council of funds available for skilled trade training through Michigan Works. Companies are funded on a first-come, first-served basis. There is $15 million available annually for training. Viticulture and Enology Research and Education Advisory Committee Report (REAC) Jeff Lemon reported on several things the REAC team has been working on: The REAC team met in August to review research proposals for 2017 (Attachment A). Complete proposals were available at this meeting for review by Council members. The team invited researchers to meet in September to answer questions and provide additional information about their proposals. The committee then decided their recommendations for funding. Research proposal requests totaled $185,000. The budget for 2017 is $150,000. The committee recommended approval of all but two of the proposals, for a total of $138,785. MOTION: JEFF LEMON MOVED THAT THE COUNCIL APPROVE THE FUNDING RECOMMENDATIONS MADE BY THE RESEARCH AND EDUCATION ADVISORY COMMITTEE FOR THE 2017 FISCAL YEAR FOR THE AMOUNT OF $138,785. MATT MOERSCH SECONDED. MOTION CARRIED UNANIMOUSLY. Karel also reported that she is working with Joy Landis at MSU Extension to create web videos for the final research reports. The videos will be housed on the MSU website and michiganwines.com will have a link to them. Consumer and Trade Promotion and Education Committee Report Jenelle Jagmin reported to the Council on the following: Jenelle sent a survey to the wineries asking which month they prefer to celebrate Michigan Wine Month (Attachment B) and presented the results to the Promotion Committee at their meeting in November. On behalf of the committee, Jenelle is requesting the Council move Michigan Wine Month from April to May, beginning in MOTION: MATT MOERSCH MOVED THAT THE COUNCIL APPROVE THE MOVE OF MICHIGAN WINE MONTH FROM APRIL TO MAY BEGINNING IN RICHARD RINVELT SECONDED. MOTION CARRIED UNANIMOUSLY The Committee is requesting additional funding for the Pure Michigan partnership. The additional funding would help fund a radio campaign partnership in the Chicago market, and participation in the Scenic Route passion page on the Pure Michigan website. Scenic Route is used to encourage travel in the months of September and October in Michigan. The radio campaign will run in May-June The committee has already 3

4 partnered with Pure Michigan for a $50,000 campaign and will need an additional $36,834 to expand the promotion. There was discussion and the vote will take place after the budget review takes place later in the meeting. Michigan Wines is partnering with the Department of Natural Resources (DNR) with an outdoor promotion between the campgrounds and wineries. Michigan Wine Collaborative and Sustainability Project Matt Moersch reported there will be a meeting in Southwest Michigan with 5 Lakes Energy and Josh Appleby of the Michigan Agriculture Environmental Assurance Program (MAEAP). MAEAP is an established program in Michigan. This is the first stage of a broader sustainable program in Michigan. The program needs some revisions to make it more like the LIVE program on the West Coast. The goal of the program is environmental sustainability in Michigan. The Michigan Wine Collaborative is suggesting that wineries must be members of the Collaborative to be a part of the sustainability program. The sustainability committee is requesting $17,500 from the Council to help hire a part-time staff person to recruit current MAEAP members, marketing money for the program, a trade mark registration, a program logo and travel expenses. This request will be voted on after review of the budget. Budget Review Karel presented the Council with an adjusted budget (Attachment C). The total revenue for FY17 is $43,636 higher than projected in the council budget, and actual expenditures were $20,957 lower than projected, which increases the Carry Forward amount by $64,593. MOTION: MATT MOERSCH MOVED THAT THE COUNCIL APPROVE THE REQUEST OF THE PROMOTION COMMITTEE FOR AN ADDITIONAL $36,834 FOR THE PURE MICHIGAN RADIO CAMPAIGN IN CHICAGO AND THE SCENIC ROUTE PASSION PAGE ON THE PURE MICHIGAN WEBSITE. RICHARD RINVELT SECONDED. MOTION CARRIED UNANIMOUSLY. Richard Rinvelt also requested that the committee investigate the opportunity to ask the wine trails to add their dollars to expand what the Council is doing, MOTION: JEFF LEMON MOVED THAT THE COUNCIL APPROVE THE REQUEST OF $17,500 FOR THE MICHIGAN WINE COLLABORATIVE TO ADD A PART-TIME STAFF PERSON, MARKET THE PROGRAM, TRADE MARK REGISTRATION, LOGO DESIGN AND TRAVEL TO ASSIST IN MARKETING A SUSTAINABILITY PROGRAM FOR MICHIGAN WINERIES. RICHARD RINVELT SECONDED. MOTION CARRIED UNANIMOUSLY. The Council recessed for lunch at 11:30 a.m. The Council reconvened at 12:19 p.m. Eligibility Review Karel Bush reported she has received an application from Painted Turtle Hard Cider in Lowell for promotional listings by the Council. They are not open to the public, they are wholesale only. They are planning to open a tasting room in the future, but right now they are using retail outlets for their tastings. They meet the eligibility requirements set forth by the Council. MOTION: 4

5 BRIEN FOX MOVED THAT THE COUNCIL APPROVE PAINTED TURTLE HARD CIDER AS A PRODUCER OF MICHIGAN WINE FOR PROMOTIONAL PURPOSES OF THE COUNCIL. MICHAEL BRENTON SECONDED. MOTION CARRIED UNANIMOUSLY. The Council promotes 125 wineries to date. Karel also reported that the Thumbs Up Wine Trail has requested inclusion of their trail in the Council s promotional materials. They have 12 wineries on the trail, six of which are recognized by the Council. The criteria for wine trails to be recognized by the Council is that more than half of the wineries are approved as producers of Michigan wine. The Thumbs Up Wine Trail does not meet the criteria at this time. There was extended discussion regarding the consequences of approving or denying the request. MOTION: MICHAEL BRENTON MOVED THAT THE COUNCIL DENY THE THUMBS UP WINE TRAIL AS A RECOGNIZED WINE TRAIL OF THE MICHIGAN GRAPE AND WINE INDUSTRY COUNCIL FOR PROMOTIONAL PURPOSES. RICHARD RINVELT SECONDED. MOTION CARRIED UNANIMOUSLY. The Council assigned the task of reviewing the eligibility criteria for wine trails to the Business Development Committee, with a review completed before the February 24, 2017 council meeting. Staff Reports As stated earlier, Karel and Gordon attended the WineAmerica Conference. Karel mentioned that the legalization of marijuana in some states has affected the wine industry workers on marijuana farms are often paid a higher wage than vineyard workers. Oregon is doing wine and weed tours. At the National Conference of State Liquor Administrators, it was reported that the trend for craft beer has peaked. The market is slowing down and with that, there may be some consolidation of businesses. The USDA NASS survey is underway. Council staff helped to gather grower information for USDA. The survey mailing will go out in January. Aurora Cellars, Mackinaw Trail Winery and Petoskey Farms Winery were awarded funding from Value Added Producer Grants through the Michigan Department of Agriculture and Rural Development. The 2017 Michigan Grape and Wine Conference registration should be online by the second week of December. There is a full agenda with quality presenters, and attendees will have to make difficult decisions on concurrent sessions. The Council s goal for increase in wine grape acreage has been added to the Dashboard (Attachment D). It was recommended by the Council to add number of farms to the Dashboard. In the past, USDA did not separate juice grape farms from wine grape farms, so there is no data available. Staff will investigate the possibility of gathering the farm information. The 2016 highlights report and the annual objectives report were distributed to the Council prior to the meeting (Attachments E and F). Wine Enthusiast Magazine named Michigan one of six Wine Regions on the Rise across the world. In 2015, CNN had named Michigan as one of the top 10 Up-and-Coming Wine Regions. New Business Gordon notified the Council that they are eligible to have Michigan.gov addresses created to use for official Council business. All s related to their Council appointment are subject to 5

6 FOIA, including s sent from their personal addresses. If a Council member would like a Michigan.gov , contact Karel. JEFF LEMON MOVED THAT THE COUNCIL MEETING BE ADJOURNED. RICHARD RINVELT SECONDED. MOTION CARRIED UNANIMOUSLY. The meeting adjourned at 1:22 p.m. Attachments A REAC Funding Recommendations B. Michigan Wine Month Survey C Budget D. Grape and Wine Dashboard E. Highlights Report F. Annual Objectives Report 6