Wednesday, May 18, 2022     Volume: 23, Issue: 11
Signup

Santa Maria Sun / Eats

The Santa Barbara Vintners Association proposes a business improvement district for wine marketing efforts

CAMILLIA LANHAM

Solvang resident Tom Orem is in seven wine clubs and purchases maybe 300 bottles of wine a year from Santa Barbara County wineries. 

“You gotta have something that’s your hobby, and mine’s drinking wine,” Orem said. “I know how many [bottles] I drink a year, because there are 365 days, so that’s easy to figure out.” 

He figures that he spends around $5,000 a year supporting the local wine economy in his retirement. When he isn’t picking out a wine to go with dinner—like a light pinot noir to go with his wife’s turkey shepard’s pie on a recent weeknight—he’s sitting on his back porch overlooking the Santa Ynez riverbed or battling the ground squirrels and gophers in the yard. 


POTENTIAL PRESERVE
The Santa Barbara Vintners Association is proposing a wine business improvement district that would impose a 1 percent assessment on direct-to-consumer wine sales on all wineries in Santa Barbara County to fund area marketing efforts.
IMAGE COURTESY OF SANTA BARBARA VINTNERS ASSOCIATION

Orem isn’t a fan of the Santa Barbara Vintners Association’s proposal to increase wine marketing efforts by forming a wine business improvement district. California’s Property and Business Improvement District Law of 1994 allows business districts to fund business-related improvements, maintenance, and economic growth by collecting an assessment from the businesses that would benefit from the district’s formation. It’s most often used to increase tourism in downtown areas and cities with an assessment on hotel stays. Although there are a couple of other wine improvement districts proposed in California, including in Sonoma’s Winegrowers of Dry Creek Valley, it would be the first of its kind for the wine industry if it’s successful.

Currently, the Vintners Association’s proposal, aka the Santa Barbara County Wine Preserve, would be funded by a 1 percent assessment on direct-to-consumer wine sales to pay for industry marketing, advocacy, and education efforts. The business improvement district (BID) would raise $1.2 million for the association, if it moves forward.

“Wine is a product. It’s like aluminum foil. ... Imagine if you went to the grocery store and everything you bought had an extra tax on it,” Orem said. “It would be like if they charged me an extra 1 percent for my steak at Albertsons so they could give their cows an extra immunization shot or whatever.” 

Improving business

Vintners Association Chief Executive Officer Alison Laslett said that taxes fund the government and assessments fund an industry, so the fee is an assessment—not a tax. She said they started working on the project in April 2018, because the association wasn’t bringing in enough funding through events and membership dues to pay for everything that its members were asking it to do. 


REVENUE BID
Santa Barbara Vintners Chief Executive Officer Alison Laslett is leading a business improvement district proposal to fund area wine marketing efforts, which would be the first of its kind for the industry.
PHOTO COURTESY OF SANTA BARBARA VINTNERS ASSOCIATION

“Historically, I would say that Santa Barbara County’s vintners’ ambitions have outpaced their funding. We have a wine region that’s unique and successful in that the wines are elegant and win a lot of awards. But we’re not as well known as we might be if the Vintners had the funding,” Laslett told the Sun. “Forty years ago, the Vintners were able to raise quite a bit of money because they were the only [event] game in town. But if you look at the festivals now, you’ve got so many to choose from. ... It’s a very crowded space.” 

In an Aug. 18 presentation to county supervisors, Laslett compared the operating budgets of wine associations in Santa Barbara County, Sonoma County, Paso Robles, and Napa. Santa Barbara Vintners had the lowest budget. In 2017, Santa Barbara brought in $552,000 while the Paso Robles Wine Country Alliance had an operating budget of $1.57 million, Sonoma had $1.6 million, and Napa $7.3 million. 

While areas like Sonoma and Napa have successful trade auctions that help fund their respective associations, the Paso Wine Alliance, which Laslett said the Santa Barbara Vintners are compared to the most, has a much larger membership than the vintners do. While the Vintners Association has a membership of around 70 to 80, the Wine Alliance has upward of 500. And while Santa Barbara County brings in around 800,000 wine tourists annually, the Paso area alone has about 1.6 million, Laslett told supervisors. 

“If you look at any of the wine regions, they’re different, and so this is one of the things that you really have to consider when you look at the money that an association is able to raise for itself,” Laslett told the Sun. “It’s very hard to compare wine regions up and down California. Each of them has their own flavor and culture.” 


UNIQUE AND DISPARATE
With eight designated American Viticultural Areas in Santa Barbara County, the region has a wide range of grape growing regions, wineries, winemakers, and price points.
PHOTO COURTESY OF SANTA BARBARA VINTNERS ASSOCIATION

The association has looked at myriad ways to fund itself, including sponsorships and increased membership, with which the Vintners have so far been unsuccessful, and creating a grape commission. A grape commission, which would tax grapes, needs to be done through the California Department of Food and Agriculture by district. That district also includes Ventura and San Luis Obispo counties, and the Vintners Association is still interested in pursuing that, but it would take collaboration between the three counties and the state, so Laslett said the association is pursuing the BID first. 

“Santa Barbara County has never found particular success in raising funding through its wine association,” Laslett told supervisors on Aug. 18. “What makes them succeed as a wine industry is also what prohibits them from working together.”

These challenges include a geography that breeds the wide variety of grapes and wines produced in the county, which has eight different official American Viticultural Areas and produces wines from giant Bordeaux varietals to softer pinots and chardonnays at a range of price points and production sizes. 

The opposition

Some area winemakers—who aren’t Vintners Association members—spoke out at the Aug. 18 meeting and have started a group in opposition: The Santa Barbara Wine Country Coalition. The coalition currently has about 50 wineries signed on. 

“I think there is a very vocal and loud opposition. I’m not convinced that it’s a majority at all,” Laslett said. “When someone’s on board with something, they say, ‘Oh that’s great,’ and then go harvest their grapes. When someone’s opposed to something, they’re going to fight it.” 

A business improvement district needs a majority (more than 50 percent) of the businesses that will be assessed to sign on in order to move forward. Opponents like coalition member Stephen Pepe say that the association doesn’t have a majority of Santa Barbara County’s estimated 270 wineries feigsupporting the proposal, while Laslett says she believes they do. 

“Any BID in its formation experiences opposition,” Laslett said. “What I have heard from other leaders of BIDs is that once you form it, the benefits become overwhelmingly obvious.” 

Pepe, of Clos Pepe Vineyards, said he believes that having wine customers pay for marketing and promotion costs is going to offend customers and wine club members. Plus, he added, doing it in the middle of a pandemic when most of the wineries are “hanging on by their fingernails” to sell wine out of their tasting rooms isn’t a good time to do something like this. 


OPPOSITION
Some wineries in Lompoc, such as Flying Goat Cellars, are working on a resolution for the Lompoc City Council that opposes the Vintners’ Associations wine bureau improvement district proposal.
FILE PHOTO COURTESY OF FLYING GOAT CELLARS

“I don’t think we really need it at this point in time, and it’s very divisive. It has been very divisive,” Pepe said. “The Vintners, if you look on their website, they’ve got between 73 and 78 members. And if you look at it, most of the larger wineries are supporting the Vintners ... and most of the small wineries don’t. ... And it’s been that way for four decades.” 

“It’s indicative of what’s going on,” he added.

Kathleen Griffith of Flying Goat Cellars in Lompoc was a member of the Vintners Association until January 2020. One of the reasons she left was because she felt she wasn’t getting the support she wanted out of the association. As a Lompoc winery, she said, Flying Goat got “zero value” out of the association. She doesn’t agree with the BID proposal because she sees it as the association attempting to make up for a lack of performance and an attrition of membership. 

“Obviously people are pushing their agenda forward,” Griffith said. “It’s not the sense of camaraderie that we really need in this county, to come together and to get engagement.”

She’s spearheading a resolution in opposition to the proposal for the Lompoc City Council to pass, which would mean that if the Wine Preserve assessment becomes a reality, Lompoc wineries won’t have to participate, Griffith said. So far, she has about 20 wineries signed on in support. 

Promote the future

The Vintners Association has always been an organization with controversy, Griffith said, due to the variety of business models in the county, which include a lot of small wineries and a lot of big wineries; people growing grapes and selling those, making wine and selling it, or doing both. 

“When you have a lot of different business models out there, it creates, you know, a lot of different approaches to what makes really sound business decisions,” Griffith said. “This wine BID has brought more collaboration than I’ve seen in 19 years, because there are so many of us who don’t want this. ... Maybe at the end of the day, this will bring us all together, help us realize that we need a new vision for the future.”

Doug Margerum, a Vintners Association member and owner of Margerum Wine Company and Barden, said that he believes the diversity of Santa Barbara County wines, winemakers, and grapes is its greatest strength. He said they don’t have a good way of marketing Santa Barbara County to the rest of the world, and it’s one of the highest quality regions for grapes and wines in California. So he supports the wine BID creation because, at the moment, it’s the best proposal on the table to promote the region. 

“Every single one of the people who are against this aren’t members of the Vintners Association, so they’ve taken themselves out of the equation,” he said, adding that people don’t want to pay what they perceive to be a tax. But it’s just 30 cents on a $30 bottle of wine. He encourages anyone with a better proposal to come forward with it.

“For me, I see this as an innovative new idea to do something that no one else has done. It’s a new idea. It’s a great idea,” Margerum said. “It will raise a tremendous amount of money to promote our cause.” 

Editor Camillia Lanham is into all makes and models of Santa Barbara County wines. Send food and drink tips to clanham@santamariasun.com.










Weekly Poll
What type of vegetable would you grow in a free community garden?

Brussel Sprouts, they are the best.
Broccoli because it can go with any meal.
Tomatoes, although I think those are technically a fruit.
French fries!

| Poll Results






My 805 Tix - Tickets to upcoming events