The Economic Impact of Grapes, Grape Juice and Wine on the New York Economy, 2008
Prepared for the New York Wine and Grape Foundation
FULL ECONOMIC IMPACT OF GRAPES, GRAPE JUICE AND WINE ON THE NEW YORK ECONOMY
$3.76 BILLION FROM NEW YORK GRAPES, GRAPE JUICE, WINE AND GRAPE PRODUCTS
$3.26 BILLION FROM SALES OF OTHER WINES
$7.02 BILLION TOTAL
New York as a Center for Wine
New York is the leading wine market in the U.S. but has been one of the most challenging wine markets since late 2008 as the recession deepened its impact.
On-Premise Wine Sales
New York’s leading role in the U.S. wine industry is drawn in part from the major role its restaurants play in the U.S. food and hospitality industry. For example, New York has the largest number of on-premise eating and drinking establishments in the U.S3. and fully one third of the top grossing 100 independent restaurants4 in the US are based in New York.
Americans began changing their restaurant behavior in third quarter 2008, either shifting to entertaining at home, switching to less expensive venues or ordering less expensive items on-premise. Restaurant traffic began picking up in July 2009, helped by valueoriented menu redesigns, but consumer spending is still very restrained. Total restaurant sales in the state are estimated to increase by 1.5% from 2008 to 2009, but the mix in spending has changed. A Harris poll found that 65% of Americans are still planning to spend less in restaurants.
Consumer behavior has particularly affected beverage alcohol sales, with wine suffering the most. Corporate entertaining, for which the most expensive wines tend to be sold, has largely evaporated. Most wine selling on-premise is wine-by-the-glass. Even half bottles are not selling. Thus, restaurants are reporting that traffic is improving, but profitability, particularly at full service restaurants, is down because of the collapse in wine sales. This trend is expected to continue through the next year, with forecast onpremise wine sales down more than 6%.