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Lake effect: grapes and the region’s economy

Rich Gardner

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(Second of two articles.)

The growth of vineyards and wineries here, on the shores of the Finger Lakes, is not about the great views, but about the lakes and rolling hills.

Paraphrasing from the book Culture in a Glass, by upstate vintner Richard Figiel, the lakes act as radiators. They emit temperatures cooler than the surrounding air in the summer and warmer than the air in winter. In spring, the cooling influence tends to delay the emergence of tender new vine shoots until the risk of spring frosts passes. In fall it's the reverse: Summer heat stored in the lakes radiates out to postpone frosts until as late as November.

Culture details how this region once lay under an inland sea, which left behind layers of sediment, or present-day shale. Easily penetrated by roots, shale subsoil provides grapevines with mineral resources that infuse wine with a subtle but unique quality. And shale keeps the soil well drained.

Figiel even breaks down the Finger Lakes into sub-climates, by soil type and lake size. European varieties (like Chardonnay, Riesling, and Merlot) flourish in calcium-rich soil --- found mainly around the bigger lakes, Seneca and Cayuga. Native American grape varieties (Concord, Catawba, and Niagara) thrive in the more acidic soils found around Keuka and CanandaiguaLakes.

Richard Figiel and his wife, Deborah Pfautsch, own Silver Thread Winery, on Seneca Lake's east side. Opened in the early 1980s, Silver Thread specializes in organically grown, European-variety, dry table wines.

Then there's the grape-growing "climate" in Albany to be considered, that is, state government. In 1985 the state legislature, responding to an economic decline in the grape and wine industry, created legislation to strengthen the agricultural and economic potential of what was already envisioned as an important agri-businesses and tourist attraction. Part of that legislation created the New York Wine & Grape Foundation, a private, not-for-profit organization that develops and implements promotional and agricultural research programs to support New York grape growers. The 19 years since are characterized by the Foundation's latest annual report as a period of "exciting growth."

The growth curve depicted by the graph in the report brings to mind the heydays of Kodak and Xerox: 43 new wineries opened in the 1980s, 58 in the 1990s. And, with 40 new wineries already opened in the first four years of the current decade, the industry is clearly on track for record growth.

"The growth is explosive and accelerating," says the Foundation's Jim Trezise. "Wineries convert raw product to consumer product and bring value-added layers of economic activity to the area. They process grapes, and they use tanks, barrels, and bottles. They have bottling operations, use labels, and require transportation." The report also mentions employment in vineyard work, tasting rooms, winery tours, wine sales, and an accompanying construction boom at wineries.

"Most of the growth," says Trezise, "has been in small, premium wineries. Its tourism and agricultural components make wineries the fastest growing industry in the region."

Indeed, along with Figiel and Pfautsch and 190 other vintners who've opened wineries, come visitors to the wineries by the increasing thousands.

Winery-related tourism has grown 800 percent in the last 15 years, according to the Foundation's report, with more than three million visitors per year to the wineries. One-third to one-half of these come from out of state and other countries. These latter account for the majority of wine sales. Canadian travelers alone spend more than $3 million annually at New York wineries.

If three million people per year are coming here, word must be getting out.

"Wineries are one of the area's biggest draws," says Sally Berry of the Penn Yan-based Finger Lakes Tourism Alliance. "They stand alone as an attraction."

Berry's organization promotes tourism for the 14-county Finger Lakes region. "When we go out of the area to motor-coach and travel trade shows, nationally, and even in Europe, people always ask about the wineries," she says. "We've established a 'brand.'"

Among the Finger Lakes tourists is two-time visitor Steven Cassidy, a Nashville-based financial advisor. As a US Navy diver, Cassidy was once stationed on the Mediterranean, and he says of those years: "On weekends we motorcycled along the coast, and when we'd stop for lunch, the native Sicilians --- wherever we were --- would always see that we had a bottle of wine to go with our food. That's what I like about the Finger Lakes wineries. The proprietor himself offers you a glass of wine and a place to sit --- very friendly, a nice touch. Reminds me of Europe."

There are other draws to the area," adds Berry. "The CorningMuseum, women's history, the Pro Bass Shop at the Finger Lakes Mall in Auburn... but wineries have impacted everything."

How do wineries drive a tourism economy? First of all, visitors have to get here. Thousands come by limo and bus.

Scott Pizzo is a textbook example of a business that benefits from Finger Lakes wineries as tourist destinations, and he exemplifies the trend in upstate New York away from industrial manufacturing to services businesses. Fourteen years ago, then a 29-year-old, third-generation union production worker at Xerox, Pizzo bought a limousine and went into business part-time.

"I saw Xerox on shaky ground and wanted to have a backup plan in place in case I lost my job," he says. "I never expected [the limo business] to grow."

Today, Pizzo operates 18 limos, vans, and mini-buses under the name of Park Place Limousine & Transportation, one of the largest such services in this part of the state. His cars have transported thousands of visitors throughout the region, including Walter Cronkite, Bill Cosby, and former Secretary of State Madeline Albright.

Does he think the wineries have helped the economy?

"Absolutely," he says. "It's now 20 percent of our business. In fact, we're structuring our marketing and the vehicles we buy based on the wine business."

Tensions do come up between the different sectors of this new economy. Pizzo, who says limo and bus firms helped spur the wineries' growth, complains that some wineries now want to charge fees for large groups.

"They want us to make reservations," he says. "That just doesn't work. They sent notices out warning us of possible repercussions if our people get out of hand. They're even talking of banning us."

Vintner John Martini, co-owner of the Anthony Road winery on Seneca Lake, sees limos and some bus tours in a positive way. "Most importantly," he says, "they are designated drivers, and our visitors can travel safely. They bring us patrons. At Anthony Road, we do ask for scheduling for groups of 15 or more, and we charge a $2 tasting fee for each person. This way we can have staff available and give the group a separate and special experience."

"We do get frustrated when large groups show up unannounced and expect red carpet service," says Martini. "Some of the drivers know we do a good job with their patrons and happily comply with our requests. Some drivers ask for a complimentary bottle of wine...not part of the deal and not provided."

Just as some Finger Lakes vintners look to their peers in California as models of commercial success, so do New YorkState limousine operators eye their West Coast peers.

"There's a wine tour business in the NapaValley that started 10 years ago," says Pizzo, "and they now have 150 buses. It's nice to see something like that taking off here."

Many folks who come here to sample New York wine are also looking for a special place to stay, and that has spurred another entrepreneurial segment: bed and breakfasts. They're "a good fit" with wineries, says Finger Lakes Tourism Alliance's Berry, "as far as the types of people they draw."

Donna and Hugh Cunningham's personal career backgrounds and the history of their bed and breakfast both mirror the shifting regional economy from industrial manufacturing to services and tourism.

Both 50-something graduates of Kodak down-sizings, they now operate Yale Manor Bed and Breakfast, an early-20th-century homestead on Yale Farm Road, on the eastern shore of Seneca Lake. Hugh also sells real estate for Nothnagle Gallery of Homes' Canandaigua office.

As with many bed and breakfasts, Yale Manor is a one-of-a-kind house with a story behind it. Struck by the grace of the home, you might never notice it is built of solid concrete. First-time settlers to the area operated a large farm here for decades. Then a state mental-health institution took it over and operated it as a residential facility.

This home, which could easily be on the cover of an interiors or bed-and-breakfast-magazine, is heavily booked and hosts guests from all over the world.

"They come for the wineries and for Hobart and WilliamSmithCollege," says Donna. "We have so many international guests that sometimes I'm the only one speaking English at the breakfast table."

The day we visited Yale Manor, there were three separate couples from Toronto staying there. Commented one guest: "This place has more wineries than France."

If vineyards and wineries are the foundation of an economic upturn, and B&Bs and limo services are the second tier, an event like the long-running and increasingly successful Naples Grape Festival might be considered the icing on the cake.

This annual event held in the Village of Naples, at the foot of Canandaigua Lake, has had two geneses. It was first started in 1961 by the late Robert Vierhile, who, like the first upstate vintners, got the idea from Germany, where he witnessed grape festivals when he was stationed there during World War II. The first incarnation of the festival, which included a parade, flea market, and carnival, lasted about 10 years.

"Young people started coming, disruptive, on motorcycles," says Bill Vierhile of his brother's festival, "So we stopped doing it."

In 1989, spearheaded by a group of community leaders organized by Naples resident Susan Farley, the festival was re-launched. It was so successful that within four years organizers had to eliminate the parade because it was causing traffic jams. The second year drew about 35,000 people; 1997 broke the 100,000 mark.

The festival, which drew 125,000 this year, now includes a juried art show, food, two stages of live entertainment, and "is outrageously beautiful," says Farley, the festival's executive director. "We take in about $65,000 in booth rental ---we sell out all 230 spaces --- parking, corporate funding, and festival merchandise. Our cost is about $30,000. The remaining $35,000, [60 percent], goes to the Naples Rotary Club and Naples Historical Society. Over the last 15 years, we've given back $200,000 to the community through these two organizations."

Farley estimates that the festival has a $1 million economic impact on the region, which is likely conservative given that the Festival has established Naples as a solid coordinate on the map of Finger Lakes tourist destinations --- a virtual upstate Woodstock and year-round host to dozens of boutiques and artisan's shops.

           

How do the sales of New York wines stack up against wines from other markets in our own area retail liquor stores?

Jeff Bencus, manager of Whitehouse Liquor Store in Brighton, says that while New York wine sales have increased, so have all wine sales, across the board. New York wines still make up less than 10 percent of wine sales, and in the last few years the state's ranking has probably fallen from second place --- after California --- with the advent and growth of other wine-producing regions and countries.

"California is overwhelming," says Bencus. "They have the volume, and with that comes quality, lower cost, and more advertising."

The issue of lower wine prices from other markets is a thorny one for Richard Figiel. "Finger Lakes winegrowers begin with a climate that is more challenging than California or Australia," says Figiel. "It's simply more difficult to grow grapes here than in hot, dry climates, where per-acre yields are generally higher. Our growing conditions are more similar to Germany and northern France, and consequently the wines --- as they are from those areas --- are somewhat more expensive. Australia and other countries heavily subsidize their wine industries. How else could Australia --- not a low-wage nation --- grow, produce, and ship wine halfway around the world and sell it for the [lower] prices we see in stores?

"Folks who buy locally produced wines will hopefully understand that they are contributing to the viability of food production and farming in their own region, which has important implications for the health of our economy and environment," says Figiel. "In this world, 'cost' is a word with expanding meaning."

There does exist a "sprinkled demand in other states for New York wines, if consumers were able to get them directly," says Jim Trezise, referring to the small wineries. "Our wineries aren't big enough to go through wholesalers and distributors."

Actually, 85 percent of wine produced in the state is sold out of state. This surprising statistic is heavily skewed by the existence of large wine companies, like Taylor, and the huge Constellation Brands (formerly Canandaigua Wine), who ship vast quantities to other markets.

In spite of the great growth in the wine industry, New York state government's support has been waning. However, all other performance numbers for New York's grape and wine industry are very good. They show a strong growth history, a projected future growth equally as strong, and a spin-off tourism-related business that is strong and growing at an even greater rate than the wine industry itself.


More tasting

For more information about the businesses and organizations mentioned in this article:

Park Place Limo Service,Rochester: www.rochesterlimousine.com

Naples Grape Festival,Naples: www.naplesvalleyny.com

Silver Thread Winery, east side of Seneca Lake: www.silverthreadwine.com

Anthony Road Wine Company, west side Seneca Lake: www.anthonyroadwine.com

New York Wine & Grape Foundation, Penn Yan: www.UncorkNewYork.com

Yale Manor Bed and Breakfast, east side of Seneca Lake: www.yalemanor.com


The big picture

The state picture

• The majority of wine grapes are grown in the Finger Lakes region, home of Consolidated brands, as well as 80 other (smaller) wineries.

• Wine grapes are also grown in smaller quantities on Long Island and along the Hudson River.

Two decades of dynamic growth

• There are nearly 200 wineries and more than 1000 grape vineyards in the Finger Lakes region.

• While the New York wine industry has existed for 170 years, more than three-quarters of the area's wineries have opened since 1985.

• The decade of the 1990s was the strongest growth period for New York wineries, with 58 opening. The present decade is already on track for exceeding this.

• In 2000, wine production was 65 percent higher than in 1985 and 29 percent higher than 1997.

• Wine-country tourism has increased 800 percent since 1985.

• One-third to one-half of tourists are from out of state and other countries; these account for the vast majority of wine sales. Canadian travelers alone spend more than $3 million annually at New York wineries.

• Winery-related employment has grown at wineries 10-fold since 1985. There has been an accompanying construction boom at wineries.

• State support for wineries and grape growers, while present since 1985, has gone down since its initial jumpstart in 1985 and is currently at approximately only one-third of its highest point.

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