The Southern Oregon Wine Institute: Development of a

Business Incubator to Support the Growth of a Regional Wine

Industry

Chris LakeSouthern Oregon Wine Institute

Umpqua Community College

An Economic Development Project

• Established in Fall 2008• Response to Poor Economic Conditions• Decline of the Timber Industry• Unemployment Rate for Region = 15%• The Institute is created serve 7 counties• Wine Industry in Southern Oregon is Growing

An Economic Development Project

• Regional Economy had High Unemployment in 2009

• Rates Higher than State and National Avg.

• Institute is designed to serve seven counties in Southern Oregon

County Unemployment

Coos 14.1%

Curry 14.5%

Douglas 17.2%

Jackson 13.7%

Josephine 15.3%

Klamath 15.3%

Lane 13.2%

Oregon 12.2%

U.S. 9.5%

Source: Oregon Employment Dept., July 2009

An Economic Development Project

• Service Area = 23742 sq. mi.• Equal to 6149150 hectares

An Economic Development Project• Survey of Industry Needs – 2006• Focus Groups with Industry• College Forms Steering Committee• Economic Modeling by CC Benefits, Inc.• Modeled Growth of Southern Oregon

Industry based on Growth of Wine Cluster in Walla Walla, Washington

The Walla Walla Wine ClusterFactsheet for the Walla Walla Wine Industry Cluster 2010Total jobs in wine production and wine tourism in 2010 1,620 Jobs

Total jobs dependent on the wine cluster including multiplier effects4,833 Jobs

Total earnings in wine production and wine tourism in 2010$69 Million

Total earnings dependent on the wine cluster including multiplier effects $153

MillionTotal jobs (including multiplier effects) projected to be dependent on the wine cluster in 2020 6,850 JobsPercent of all jobs dependent on the wine cluster in 2010 13%

Projected percent of all jobs dependent on wine cluster in 2020 16%

Annual average growth in direct wine cluster employment, 2000 to 2010

20% Annual Growth

Overall growth in the regional economy, 2000 to 2010 9%

Overall growth in the regional economy, 2000 to 2010 absent the wine cluster

-3%

Southern Oregon is Desirable for Growing Fine Winegrapes

Geographic Data = 140,000 Ac. Suitable for vineyards. (56655 Hectares) 40,000 are Prime Vineyard Sites (16187 Hectares)Land Values are Low Compared to Other Wine Regions

Southern Oregon is DesirableOn The 'it' list for 2010 travel, Sunset Magazine, January 2010

“The next big wine country = Southern Oregon

Why we love it: Exciting wines, no crowds, and inexpensive tasting fees.

Go now: Arm yourself with a map from the Southern Oregon Wineries Association and hit the road”.

The Wine Industry is LargeThe US is the Worlds Largest Consumer of Wine in 2011•Total wine sales in the U.S. climbed to a new record of 347.0 million cases, a 5.3 percent jump from 2010, with an estimated retail value of $32.5 billion•This is the 18th consecutive year of volume growth in the U.S.

Of 300 Million People in the US, Only 28 Million Consume Wine

Source: The Wine Institute

Price Per Ton of Grapes, 2008-2009

Source: National Agricultural Statistical Service

VarietyBy

RegionColumbia

River

North Willamette

ValleyRogue Valley

South Willamette

ValleyUmpqua

Valley 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009Cabernet Sauvignon $2,020 $2,100 - - $1,910 $1,770 - $1,500 $1,700 $1,370

Chardonnay $1,250 $1,340 $1,950 $1,620 $1,000 $1,220 $1,470 $1,700 $950 $1,330

Merlot $1,810 $2,180 - - $1,470 $1,800 - - $1,540 $1,010

Pinot Gris - $1,500 $1,400 $1,250 $1,370 $1,330 $1,330 $1,430 $1,320 $1,400

Pinot Noir $2,110 $1,990 $2,820 $2,340 $1,670 $1,820 $2,300 $2,180 $2,000 $2,140

White Riesling $1,080 $1,070 $1,150 $950 $1,280 $1,400 $1,180 $1,240 $980 $1,050

An Economic Development Project• Start-Up Funds Secured• Curriculum Developed• Degree and Certificates Approved• Director Hired in July 2008• Begin Planning for Wine

Incubator

Start Up Funds Secured• Douglas Co. Industrial Dev. Board• Cow Creek Band of Umpqua

Indian Tribe• Wal-Mart Foundation• USDA RBEG• US Dept. of Commerce - EDA

Curriculum Developed• Study of Curriculum from Other

Schools• Industry Input on Outcomes• Modeled on Distance Education

but Includes Face-To-Face components

Begin Planning for Wine Incubator• Based on Winery Type Found in

Regional Industry• Input Sought from Industry• Hire Design Firm w/Wine

Production History

An Economic Development ProjectThe Project Includes: Headquarters for SOWI Student Vineyard Commercial-scale Winery Internationally Recognized

Testing Laboratory Wine Incubator

Wine Incubator

Wine Incubator

Wine Incubator

Wine IncubatorConstruction begun 9/10/10

Completed in December 2011

Local Capital Campaign rasied $2.5 M

Recovery Zone Bonds issued - $4.25 M

Thank You

Chris LakeSouthern Oregon Wine Institute

Umpqua Community Collegechris.lake@umpqua.edu

Websitewww.sowicellars.com