The Economic Impacts of the San Luis Obispo County and Paso Robles AVA Wine Industry

TitleThe Economic Impacts of the San Luis Obispo County and Paso Robles AVA Wine Industry
Publication TypeReport
Year of Publication2016
AuthorsMatthews, W. J., & Medellín-Azuara J.
Date PublishedMay 2016
InstitutionAgricultural Issues Center, University of California.
CityDavis, California
KeywordsCalifornia, economic impact, San Luis Obispo, wine
AbstractThe San Luis Obispo County and Paso Robles AVA wine industry is a large and dynamic part of SLO County and Central California Coast agriculture and makes major contributions to the county and regional economy. Wine grape production has been a generator of agricultural revenues for San Luis County since the 1970s. The recognition of the quality of wine produced in the area from local grapes launched the establishment of the Paso Robles AVA (American Viticultural Area) in 1983 and spawned over 30 years of continued growth in wine grape acreage and wine production by the industry. The Paso Robles AVA accounts for 87 percent of SLO County wine industry output and economic impact. Contributions of the wine industry to the regional economy can be understood by distinguishing between direct, indirect, and induced effects of economic activity and by looking at both the value of industry output as well as the value added above the cost of goods and services purchased from other sectors. Direct effects are impacts within the affected industry; indirect effects are the changes to industries that support but are outside the directly affected industry; induced effects are economic ripples from added consumption generated by the direct and indirect effects. Value of industry output is the value of the direct output or service contribution of the industry; whereas, the value added calculations measure the economic contribution of the industry above the cost of goods and services purchased from supporting industries. This report uses projections of the value of the 2015 wine grape crop and winery sales, with comparisons to 2014, to estimate contributions of the wine industry to the regional economy. This report also includes analysis of the wine industry’s economic 2 contributions via its impact on the regional tourism industry from winery and wine tasting room visitors. We estimate that the 2015 output from SLO County and Paso Robles AVA vineyards and wineries, combined with the output generated by the tourism industry from wine-related visits to the area contributes much to the regional economy with most of this impact occurring within SLO County. • The total impact on the value of regional output, including direct, indirect, and induced economic output, is about $1.9 billion. • Of the total output value of $1.9 billion, about $924 million is value added. This includes indirect and induced value added. Value added is the economic output measure that contributed to the size of the regional economy (Gross Regional Product). • Of the $924 million of total value added to the regional economy, about $417 million is attributable to wine grape production and $398 million to wine production. The remaining $109 million is the value added from wine-related tourism to the area. • The whole wine industry, including wine-related tourism, generates about 13,627 jobs, over half of which are in supporting industries and the tourism industry. • Of these 13,627 jobs, total employment generated by grape growing is 4,349 jobs, wine making generates an additional 6,905 jobs and wine related tourism accounts for the remaining 2,372 jobs. • Vineyards and wineries within SLO County and Paso Robles AVA account for 28 percent of all property tax revenue collected by SLO County in 2015. In addition, 3 wine sales generate an equivalent of 10 percent of total 2015 California sales tax revenue collected from San Luis Obispo County.