History

• The United States wine industry began in Virginia hundreds of years ago during the British colonial establishment in Jamestown in the 1600s. The British wanted to tap into the natural resources and produce items that could not be produced at home, one of them being grapes for wine. Wine was then shipped to London as early as 1622. However, wine production soon took a back seat to tobacco farming.
  
  

The Business Side

• Start-up costs are high and initial returns are low in the wine industry. It may take up to four years from the initial planting to produce a crop and six or seven years before a small farm winery can yield a positive cash flow. It can take an additional 10 years to pay off the initial investment, which includes capital to secure a minimum of 10 acres of land, processing of machinery, grapevines and necessary buildings. Distribution is frequently a problem for new wineries until brand recognition is achieved.
  
  To offset the delay in positive cash flow, many wineries turn to "agritourism" as a means of revenue. Tapping into the tourist industry increases brand recognition.
  
  

Feasibility

• The Virginia wine market has great potential. Economically, Virginia land is cheap compared to other grape-growing regions. Prime tracts sell from $10,000 to $20,000 per acre compared to $100,000 to $1 million an acre in California. By developing "agritourism" and related on-site tastings and sales, Virginia wine producers often cut out the middle man. Environmentally, Virginia land, soil and growing conditions in much of the state are conducive for growing wine grapes.
  
  New wineries plant limited varietals and focus on developing maximum quality. This is necessary to meet increasing local demand and to move into a growing national market. Varietals include merlot, cabernet franc, and viognier. A good market prospect is blended wines.
  
  Brand development is important to Virginia wine sales. Industry standards to increase awareness include regional advertising, trade literature and word of mouth. Selling the experience is also successful and ties in with tourism.
  
  

Economic Impact

• Governor Bob McDonnell says that the increase in the production and sale of Virginia wines is being recognized locally and globally. This growth translates into more jobs and rural economic development. The increase in sales results in additional funding for wine grape education and research and wine marketing initiatives that will fuel continued Virginia wine industry growth, in turn leading to continued job creation.