Magazine September/October 2015

Glass Half Full

September/October 2015 Issue

Wineries have existed in Arkansas since before Prohibition, but the industry has shown slow growth in the past few years.
Photography by Sara Edwards Neal

 


Cover Story:  Part 1 | Part 2 | Part 3


Top Photo: Bottling production at Post Familie Vineyards & Winery.
Arkansas has a long history as a wine-producing state. Before Prohibition, there were around 150 Arkansas wineries, but, in recent years, the state’s grape production has fluctuated and the industry as a whole has been slow to grow.

Still, Andy Allen, chair of the viticulture and enology program at Arkansas Tech University-Ozark Campus, said Arkansas’ wine industry is “turning around.”

“It was on the decline for a few years and plateaued at a low point,” he said. “It’s on the rebound. New wineries have opened or are in the process of opening. Existing wineries have increased volume output, and gallonage of wine produced annually is on the increase.”

Today, there are 36 small farm winery manufacturing permit holders in Arkansas. Twenty-five of those are based in Arkansas; the remainder have Arkansas permits to sell in the state’s grocery stores, which only allow sales from small-farm wineries, or those producing less than 250,000 gallons per year, according to the state Alcoholic Beverage Control Division, or ABC.
Wineries with names like Post and Wiederkehr have been around for years, but others, like Chateau Aux Arc and Sassafras Springs, are a bit newer to the state. A few more, including Raimondo Winery in Little Rock, are scheduled to open in the coming months; the most recent permit was issued on July 22, 2015, to Storm Brewery in Springdale.

“It’s slowly increasing,” Allen said. “The problem is Arkansas is a patchwork quilt of ‘wet’ and ‘dry’ counties.”

Slow Growth

According to the U.S. Department of the Treasury Alcohol and Tobacco Tax and Trade Bureau, Arkansas’ total production was 245,172 bulk wine gallons and 367,420 bottled wine gallons in 2014, and 233,958 bulk gallons and 401,722 bottled gallons in 2013. From January to May 2015, the most recent report available, production was 98,625 bulk gallons and 159,657 bottled gallons.

The state’s wineries are required to report production to ABC, which verifies that each produces under the 250,000-gallon annual state cap, but the agency does not maintain statewide production numbers.

Post Familie Vineyards & Winery in Altus is considered the state’s largest, based on production and vineyard acreage. On paper, the winery goes back to 1896, said Tina Post, fifth-generation winemaker who handles the retail aspect of the business. She and eight of her 11 siblings work in some role within the family business.

Post makes more than 40 types of wine and has about 1,000 acres of vineyards where they grow about 40 varieties of grapes. Wines are available throughout Arkansas, as well as in Missouri, Oklahoma, Mississippi and Louisiana. Post declined to provide total production numbers.

Audrey House, owner of Chateau Aux Arc Vineyards and Winery in Altus.

Audrey House, owner of Chateau Aux Arc Vineyards and Winery in Altus.

Many of the state’s other wineries have a link to the Post family. When Prohibition was repealed in 1933, about 30 families, including the Posts, formed a winemaking co-op, said Joseph Post, who handles the winery’s distribution and sales. Eventually, some broke from the co-op to form separate wineries, and later some Post family members started their own wineries.

In 2001, Audrey House opened Chateau Aux Arc Vineyards and Winery in Altus. The boutique winery now produces 12 to 15 types of wine and encompasses 50 acres of vineyards. In 2014, House said she produced 5,500 gallons.

“We just get creative,” she said. “That’s the fun process of fermentation.”

House’s products are only available at the winery. In the past, she sold at retailers around the state but had to scale back. The only way to meet that level of production is to purchase bulk grapes from outside the state, which would mean wines would not be 100 percent Arkansan, she said.

“A small boutique winery like us, who only makes 120 cases to 150 cases of each batch, there’s no way we can even put our products in stores and keep with consistent [stock-keeping units],” she said. “We focus on what grows best here naturally, sustainably, and creating a presence for wine drinkers that we have something special here.”

Grape Commodity - Post Familie Vineyards and Winery has about 1,000 acres and grows about 40 types of grapes.

Grape Commodity – Post Familie Vineyards and Winery has about
1,000 acres and grows about 40 types of grapes.

Agricultural Commodity

Wine is agriculturally based, something that House said people often forget. Both Post and House say they sell grapes to other wineries, both in Arkansas and outside.
“I’m a farmer being taxed as a commercial industry,” House said. “We’re an agriculturally based commodity, and we’re looked at as a luxury product.”

According to the Arkansas Department of Agriculture, 80 percent of the grapes grown in the state go toward making wine and juice. Total grape production has varied over the past few years.

The U.S. Department of Agriculture National Agricultural Statistics Service reported Arkansas grape production at 1,300 tons in 2012; 1,800 tons in 2013; and 1,500 tons in 2014. It had been as high as 2,100 in 2010.

In 2014, NASS estimated harvested acreage of Arkansas grapes at 700, with just under $1.3 million in production value.

A 2012 report, commissioned by Arkansas Tech University and based on 2010 data, estimated the total economic impact of the state’s wine industry at $173.2 million. The report showed that the industry employed nearly 1,700 people and contributed $11 million in federal taxes and $12 million in state and local taxes. It also showed $21 million in wine-related tourism expenditures.

Federal taxes on wholesale wine are $1.07 to $3.40 per gallon, depending on percentage of alcohol and whether the wine is carbonated, and 21 cents to 67 cents per 750-milliliter bottle. Credits exist for the first 100,000 gallons from a small-farm winery producing less than 150,000 gallons per year. State taxes are 75 cents per gallon and 5 cents per case.

House and Tina Post say eliminating dry counties and improving shipping laws for wine could help business grow. Now, the law allows Arkansas wineries to ship to Arkansas residences only, and consumers must purchase the wine to be shipped in person.

“It’s a hard industry to make it in,” Tina Post said. “We’re subject to the weather, economies of scale. One of the best things you can do is put out a consistently good product.”
Arkansas Tech’s Allen said the potential for growth in the wine industry is much larger than people realize.

“There are challenges,” he said. “[Arkansas] is capable of growing high-quality grapes and producing high-quality wine. There are large population areas, high tourism areas that can support a much larger industry.”


Cover Story:  Part 1 | Part 2 | Part 3

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