Southern Oregon Wine Institute

Chris Lake, DirectorUmpqua Community College

Roseburg, Oregonwww.sowicellars.com

An Economic Development Project

• Established in Fall 2008• College Responds to Economic Conditions• Decline of the Regional Timber Industry• Avg. 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 has High Unemployment

• Seven Counties• Rates Higher than State and

National Avg.

Source: Oregon Employment Depart., July 2009

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%

An Economic Development Project

• Service Area = 23,742 sq. mi.• Larger than Nine States in US

An Economic Development Project• Survey of Industry Needs – 2007• Focus Groups with Key Partners• College Forms Steering Committee• Economic Model developed by CC

Benefits, Inc.• Model Predicts Growth based on Wine

Cluster in Walla Walla, Washington

The Walla Walla Wine Cluster

Clustering Concept fromMichael Porter,On Competition, Harvard BusinessSchool Press, 2008.

The Walla Walla Wine ClusterAdvantages of Clusters are:• Increase Access to Special Inputs, Services,

Employees, Information and Institutions.• Coordination Among Companies.• Rapid Diffusion of Best Practices.• Provide Incentives to Improve.• Enhance Opportunities for Innovation.• Lessen Costly Experimentation

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%

The Walla Walla Wine Cluster

We estimate that the wine cluster in 2010 accounts for 13% of all jobs and this is almost certainly a conservative estimate -- President VanAusdle (Walla Walla Community College) tells us that just since 2007 wine acreage in the region has roughly doubled! The wine cluster's role has clearly been dramatic, saving the region from a 10 year overall economic contraction of -3%, instead seeing a roughly 9% growth in jobs.

» Dr. Hank Robison, EMSI (formerly CC Benefits) dated May 24, 2010

Southern Oregon is DesirableEconomic Modeling for Southern Oregon:A Ten-year Growth Factor of 5,000 Jobs$115 Million in Labor Income.

Geographic Modeling for Southern Oregon:Geographic Data = 140,000 Ac. Suitable 40,000 are Prime Vineyard Sites

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”.

Modern Wine

Producing Regions of

Oregon

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 Teaching

Winery

An Economic Development ProjectStart-Up Contributors Included:• Douglas Co. Industrial Dev. Board• Cow Creek Band of Umpqua

Indian Tribe• Wal-Mart Foundation• USDA RBEG

An Economic Development ProjectCurriculum Developed & Degree

and Certificates Approved• Study of Curriculum from Other

Schools• Industry Input on Outcomes• Modeled on Distance Ed.

An Economic Development ProjectBegin Planning for Teaching Winery• Based on Winery Type Found in

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

Production History

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

Testing Laboratory Wine Incubator

Teaching Winery

Teaching Winery

Teaching Winery

Teaching Winery

Teaching WineryConstruction begun 9/10/10

Completion date is September 2011

Local Capital Campaign of $2.5 M

Recovery Zone Bonds of $4,25 M

The Instructional Mission

• Service Model is Online/Hybrid Delivery• Lecture Material Delivered by LMS• Laboratory Conducted on Campus• Labs Held on Fridays/Saturdays• Cooperate with Local Vineyards/Wineries

The Instructional Mission

The Instructional Mission

• Growth Comes From Meeting Student Needs

• Many Non-Traditional Students• Wine Incubator Will Produce New

Winemakers• Industry Advisory Board

The Instructional Mission:

• Future Cooperative Teaching with Oregon State University Extension

• Development of Satellite Wine Incubators• Add Face-to-Face for Traditional Learners• Cross Instruct with Culinary• Involve Art Students in Label Design

Thank You

www.sowicellars.com

Wine Industry is Cyclical

The US will Become the Worlds Largest Consumer of Wine

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