Tag Archives: Arizona Wine Growers Association

Arizona Stronghold Vineyards' wines

Experts foresee gains for maturing Arizona wine industry

The back roads near Cornville look like many others in Yavapai County, until you turn a corner and find rolling hills filled with vines, tasting rooms and homes that are more Tuscan than Southwestern.

Javelina Leap Winery sits among grapevines in a small valley outside Cornville. The 10-acre property includes a vineyard, tasting room and production facility.

Owner Rob Snapp was one of the first to start his business in the burgeoning wine region. In the last 15 years, he’s seen the area grow from just a few acres of vineyard to a tight-knit winemaking community. Now, at least 70 acres of vineyard dot the landscape of this northern Arizona region just under an hour from Prescott.

Throughout Arizona, wineries have cropped up in droves. More than 90 locations have farm winery licenses in the state. They’re clustered in three general locations: Sonoita/Elgin in southern Arizona, Willcox in central Arizona and the Verde Valley near Prescott.

The wine industry grew gradually until 2001 when Arizona began to experience exponential growth. Wine production in the state soared nearly 700 percent in the 14 years since, well above the national average.

The winemakers have come to Arizona for the climate, business environment and love of the drink itself.

Snapp’s passion for wine began in California as a teenager and, like his product, matured as he aged. He became a chef and business owner, managing and cooking at a hotel and restaurant he owned near the Grand Canyon. Eventually, he sold the location and used his profits as seed money to start the winery.

“This was raw land when we got here,” Snapp said. “There wasn’t a road or a building or water or electricity, nothing.”

Snapp spent a lot of time learning the business and managing the estate. While he wouldn’t reveal Javelina Leap’s financial status, he said his business is doing well – and other wineries nearby share the same success.

A 2013 study done by the Arizona Wine Growers Association showed the Yavapai region produced about 72 tons of grapes that year, large enough to make tens of thousands of bottles of wine, but a small percentage when compared to other regions.

Arizona’s reputation has grown on the national stage, especially for wines in Yavapai County. For example,Page Springs Cellars, just down the road from Javelina, has garnered praise from multiple sources, including Wine Aficionado magazine, as a quality wine.

Why Arizona?

In the United States, California dominates the wine industry. The Golden State produces more than 80 percent of the country’s grape crush beverage.

Arizona pales in comparison, coming in at 28th in the U.S., according to the Alcohol and Tobacco Tax and Trade Bureau. But, the state has slowly moved up the ranks as wine production has increased. Experts said the state might see its ranking rise even further as Arizona wine grows as a business and commodity.

Many experts, vineyard owners and educators in the wine industry said Arizona has the potential to produce high quality wines, comparing it to regions of Spain, France and Italy.

Rod Keeling with the Arizona Wine Growers Association said Arizona has some key incentives that are attracting newcomers to the wine industry:

• Costs are lower in Arizona. Land is less expensive than in California or other major wine states, and labor can cost less as well.
• The climate in the three major wine growing areas is warm in the day and colder at night. This helps the grapes grow, and some types of grapes, especially those used to produce red wines, need the temperature variations.
• Arizona doesn’t yet have the severe water issue California faces, Keeling said. This makes the state a safer bet when starting a winery.
• The Grand Canyon State offers more flexibility for wine producers than many other states.

Arizona’s three-tier system of liquor distribution allows farm wineries to produce, sell and distribute wine themselves as long as they follow certain regulations, including a production cap.

“There are three licenses that fall under this regulation,” said Lee Hill with the Arizona Department of Liquor Licenses and Control. “Wineries, distilleries and microbreweries are able to do all three all under the same roof, so they have amazing privileges.”

Industry trends

According to statistics released by the U.S. Department of the Treasury, national wine industry production grew about 43 percent since 2001, and the number of wineries nearly doubled during the same period.

“It’s not just Arizona. The industry has exploded exponentially everywhere,” said Michael Kaiser withWineAmerica, a Washington, D.C.,-based public policy organization. “I think there are a few reasons for that. Obviously, wine consumption in the U.S. has increased. And as the industry has grown, people are realizing that wine doesn’t have to be from California to be good.”

Kaiser said that as younger consumers enter the wine market, they might have more interest in the local vintage.

However, Kaiser warned that the boon isn’t permanent.

“The wine industry will continue to grow, but the growth rate has slowed a bit,” Kaiser said. “One issue that some states have is that winery growth is outpacing vineyard growth and in some cases, there aren’t enough grapes to go around.”

That’s not necessarily the case in Arizona. The study by the Arizona Wine Growers Association indicated that most grapes produced in Arizona are used by the winery or vineyard that grows them, and vineyards sell very few grapes to others, in or outside of the state.

In a saturated national market, experts said the industry must continue to innovate to stay ahead.

So far, it has self regulated. In 2014, the Arizona Wine Growers Association joined other groups in pushing for changes to tasting room licensing, which will allow for greater growth.

“The producers are very innovative, they come up with new ways of using their property,” Hill said. “They now make distilled spirits out of their unused wine stock. These producers are very creative and as the industry grows, they come up with these really fabulous ideas to keep their businesses alive.”

Impact to Arizona

The local wine industry has not conducted a full economic impact study, but the association estimated sales revenue at about $2.2 million for 2013.

Despite this small number, the Arizona wine industry is more than just for hobbyists. It has led to full-time job increases in these regions.

“It’s about seven businesses in one,” Snapp said. “We’re working all the time, bottling, racking, selling.”

One unexpected impact has been to education. Yavapai College‘s Verde Valley Campus in Clarkdale offers a variety of courses in winemaking and vineyard care in response to industry growth.

The school began with a single acre vineyard in 2010 and now has more than 15 acres and about 100 students.

As part of the program, students can earn a two-year degree and get practical experience through internships with local wineries.

“We are really trying to be a region wide resource, not just local or statewide,” said Michael Pierce, director of the enology (winemaking) program at Yavapai College. “This program didn’t exist 10 years ago. If it would have existed, I would have attended. So to be here and help build it is really cool.”

Some experts said they expect the industry to continue to grow as water becomes more scarce in Arizona.

“Wine grapes are a model for a high value low water use crop,” Pierce said. “Wine grapes don’t take nearly the water use of something like corn or soybeans or cotton would. So hopefully, wine grapes can take that over in the state.”

Challenges ahead

Perhaps the biggest challenge for the Arizona wine industry is the wine itself.

“I think white (wines) are doing really good. They are aromatic, expressive and acidic, which is really nice,” said Jason Caballero, lead sommelier for Vintage 95 in Chandler. “The reds are in a bit of an identity crisis. But when you think about it, we are at only about 30 years of growing, and every year they get only one shot.”

For Caballero, that youth plays a significant role. California has been in the industry since the 1800s and Europe for more than 2,000 years.

He said Arizona growers need to learn what types of grapes work best in this climate. The red identity crisis, he said, is as much from mixing a variety of grape types as from not growing what could work best in the state’s environment.

Price also plays a key role. Caballero said that on average, a bottle of Arizona wine costs $65 to $70, making it a hard sell for many customers.

“I understand people are getting in, and they want to recoup their cost, so I feel like sometimes it’s tough and they price themselves out,” Caballero said. “For that money, there are a lot of wines that many people will gravitate toward instead. I think if people will try it, they’ll like it. But a lot of times, people will go for tried and true kinds.”

Spreading the gospel of Arizona wine isn’t easy. Outside distribution is almost non-existent among Arizona wine growers. Most wineries make direct sales and self distribute, which makes getting wine onto tables more difficult.

And then there’s the state’s reputation as a desert location not suitable for wine growing.

But Snapp doesn’t see this as a problem at all.

“You know what we have more than anybody?” Snapp asked. “Sun! And soil. These are virgin soils in most of the state and volcanic soils. It’s one of the best growing soils in the world. You’d be crazy not to grow Arizona grapes in these soils.”

For Caballero and others, wine in Arizona isn’t a short-term industry but a future investment that is only now paying some dividends.

“Within 10 years, people are going to seek out Arizona wines over many others,” Snapp said. “It’s just the quality of the fruit.”

Tempe Rendering - PR 9-9-13

Liberty Center at Rio Salado Ready for Construction

Bulldozers and backhoes are in motion at Liberty Center at Rio Salado, the new sustainable mixed-use business park under development by Liberty Property Trust in Tempe at Priest Road and Rio Salado Parkway. The company is readying the location for construction with the recent approval of its site plan by the City of Tempe.

“Rising demand for larger, contiguous spaces is the catalyst for our quick start,” said John DiVall, senior vice president and city manager for Liberty’s Arizona region. “We have submitted plans for our first office building to the City and anticipate starting development of both that building and the main entrance to the park in the fourth quarter. Interest from current and prospective tenants is growing quickly, so we’re eager to begin to bring the vision of this park to life.”

In 2012, Liberty Property Trust was selected by the City of Tempe as the developer for the 100 acre site located at Priest Road and Rio Salado Parkway. Liberty Center at Rio Salado is centrally located in the heart of the Phoenix Metropolitan Area, offers unparalleled visibility from Arizona Route 143 and Red Mountain Loop 202, and is within minutes of Sky Harbor International Airport. The location is less than five miles from the company’s fully leased 1.2 million square foot business park Liberty Cotton Center. In addition to office, flex and industrial space, DiVall notes that the plans call for hotel, restaurant and retail locations.

“When complete, Liberty Center at Rio Salado will be a fully-visioned complex that will benefit tenants, employees and the City, and add valuable resources to the surrounding community,” he added. 

At build-out, Liberty Center at Rio Salado will feature more than one million square feet of space, and all buildings developed by Liberty Property Trust at the park will be designed to meet LEED certification with a focus on energy efficiency.

Wespac Construction will manage the earthwork on the site and RSP Architects is handling the land planning. Development work bids are still being processed.

Winery

Wineries Win Battle At Capital

Southeastern Arizona:
The Border Report

Significant business developments promise to fortify the economies of Arizona’s southern half

By Peter O’Dowd

After battle waged at the Capitol, local wineries still in the game. Poised to enter the State Legislature with a litigious flurry, Arizona wine growers dug in for a fight of David and Goliath proportions. When the dust settled and the vote was cast, the underdog had defeated a lobbying giant, leaving an unencumbered path for the future of the state’s wine industry.

border_reportThe history of Arizona wine law is tangled in a bevy of U.S. Supreme Court cases and litigation in states that were previously consumed with distributing regulations. In a nutshell, with the approval of Senate Bill 1276 last May, Arizona wineries reaffirmed the right to self-distribute to restaurants and retailers. Smaller wine growers also secured the privilege to bypass wholesalers and ship directly to consumers via telephone, mail and Internet sales, or set up satellite tasting rooms and retail outfits away from their remote locales. These steps, which wine growers say are essential to their survival, were not allowed under previous legislation.

“You have to understand how dominate the wholesale part of the liquor industry has been for years from a policy standpoint,” says Rod Keeling, president of the Arizona Wine Growers Association and owner of Keeling-Schaefer Vineyards in Pearce, Ariz. “They were in total disbelief that a bunch of guys with dirt under their fingernails could come up here and convince the legislature that they ought to do something for us instead of something for them. I’m still not sure they know what hit them.”

Keeling and his colleagues feared wholesalers would convince lawmakers to revert back to a three-tier system that mandated even small wine makers sell to wholesalers who would then distribute to retailers, and ultimately, consumers. Keeling says an 11th-hour compromise between the groups was preferable to the lawsuit his organization would have brought if boutique growers were forced under the three-tier system. “That would have been death,” he explains.
So, instead of a deathblow, Arizona vineyards are in a position to expand. Kent Callaghan, who has received international attention for his varietals crafted 30 miles from the Mexican border, says offsite retail presence gives growers more options to stay in business. “Certainly you’ll see an increase in quality and quantity,” says Callaghan, who claims improvements are already brewing. “Nobody associated Oregon or Washington as a wine growing area 30 years ago. It took a while for the state’s wine to catch on with its residents. The same thing is happening here where people have stopped immediately acting negatively toward Arizona wine.”

Keeling agrees, but doesn’t shy away from past shortcomings. Five years ago he could only stomach two Arizona labels. Now he drinks six or seven. “We’ve added a lot of quality producers,” he says. “They are smarter, more committed to quality, not using the tourism model; it’s not being sold as a novelty but on its own merits. Kent Callaghan deserves all the credit for that.”

For years, Keeling says the state was stuck at eight or nine wine growers, but in the last two years that number has swelled to 22. What used to be a state of 12 or 13 vineyards is now the home to 32. Perhaps most telling are the production numbers: 15,000 annual gallons four years ago compared to 47,000 gallons today.

Indeed, the gears may already be moving and some predict Willcox will become the state’s vineyard epicenter. Amid favorable water and weather conditions in Cochise County, experienced wine grower Dick Erath bought 200 acres close to town. As these seasoned experts employ Arizona’s nascent vineyards, the relatively small knowledge base grows, techniques improve and the industry blossoms.
Of course, favorable legislation doesn’t hurt either.

Nogales
Extra Lanes Slash 4-hour Border Wait
Nogales, Ariz.—Port Authority officials here anticipated a July completion of two additional commerce lanes linking Mexican and U.S. boundaries that would reduce agonizing wait times at the border. The $4.3 million expansion brings to four the number of lanes motorists and commercial trucks use to cross the border. Terry Shannon, chairman of the Greater Nogales-Santa Cruz County Port Authority, says the Mariposa Port of Entry can process 300 trailers effectively per day, but in reality 1,400 trailers line up daily on either side of the border. The glut creates an average wait of four hours. This is the first step in a larger plan to reconfigure the port. $9.8 million is secured in the 2007 presidential budget for a port with capacity for 3,000 trucks per day.

Tucson
SlimFast Site to Can Beans, Not Shakes

Tucson, Ariz.—The former SlimFast manufacturing building in Tucson has been vacant for nearly two years, but plans are under way to fill the 440,000-square-foot plant with food of a different fare. Arizona Canning Company LLC, of Mexico, announced in June the building would house its U.S. headquarters, bringing 200 employees to the region in the next three years. The majority of the recruits will be from the Tucson area. By summer 2007, Arizona Canning Company plans to buy raw material from U.S.-based suppliers, receive it in Tucson, process and sell the plant’s output to U.S. markets across the country. “This will be a huge win for Tucson,” notes Joe Snell, TREO President & CEO.

www.lacostena.com.mx

Bowie
Gasified Coal Emits a Fresh Breath

Bowie, Ariz.—Developers of the 600-megawatt Bowie Power Station announced the electric generation facility planned for Southeastern Arizona will now incorporate environmentally sensitive coal technology. The project will gasify coal before combustion for cost-effective generation while protecting the environment, creating local jobs and economic growth. Developers say the project will lessen Arizona’s dependence on natural gas for electric generation. “This is unlike a conventional coal plant where its pulverized and burned,” says spokesman Ian Caulkins. “In this case, mercury, sulfur and other contaminants are removed prior to combustion.” Bowie is expected to outperform the efficiency and emissions of existing coal power plants, which will make it one of the cleanest coal plants in the world. The Arizona Corporation Commission has already granted a certificate. All remaining regulatory requirements will be completed by 2007 and construction will then begin as soon as possible with commercial operation expected in 2012.

www.bowiepower.com

AZ Business MagazineSuperior
Broadband a Boon to Local Businesses

Superior, Ariz.—Until recently, sending large files over the Internet was an exercise in patience for business owners in Superior. But a gift from the Arizona Department of Commerce will funnel in $35,000, bringing high-speed broadband infrastructure and the potential for hundreds of new jobs.
Superior businesses were hindered with limited dial-up connections, which severely limited communications, ordering products online and carrying out tasks as simple as e-mailing digital photos. “Our business has suffered as a result of our inability to access reliable infrastructure,” says Rozlyn Lipsey, a Superior business owner. Several local businesses have provided $1,000 matches to fund the project. The town has dedicated $25,000 and applied for an additional $270,000 from the federal government to enhance the initiative. An award announcement will be made this fall. Officials expect the improved connectivity will allow business the chance to grow, facilitating 300 full-time jobs.

www.azcommerce.com

Arizona Business Magazine Aug/Sept 2006

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