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State Funded Marketing and Promotional Activities to Support a State's Winery Business; Are There Economic Returns? A Case study using Texas Senate Bill 1370's support of the Texas Wine Industry

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  • Hanagriff, Roger D.
  • Lau, Michael H.
  • Rogers, Sarah L.
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    Abstract

    Texas wineries were surveyed regarding their participation in wine marketing activities, annual changes in gross sales, and level of sales growth attributed to Texas Department of Agriculture’s funding support. The response from the 93 registered Texas wineries was 53 wineries, which was a 57 percent response rate. Senate Bill 1370 allocated $725,000 for marketing and promotion of Texas wines. Combining the $725,000 with the normal funding of $250,000 creates $975,000 in annual support to the Texas wine industry to be used in marketing Texas wine. The most utilized funded activities are promotional materials and wineries attending TDA supported wine events. Ninety-two percent of Texas wineries recognized an increase in awareness for the Texas wine industry and attribute 49 percent of the increase to state marketing efforts and use of state funding. As previously mentioned, a portion of TDA marketing funds were directed towards supporting wine events in Texas attracting large numbers of consumers for promotional opportunities. Consumers attending these events were surveyed and one result found that 68 percent of consumers reported these events encouraged them to purchase more Texas wines. Annual economic impact results from all funding activities were $2.16 per $1 of funding of total direct sales increases, $3.93 per $1 of funding in economic impacts of increases in sales and $.40 per $1 of funding in valued added impacts (based on IMPLAN Type II Economic Multiplier values). It is apparent that both direct and indirect economic results were positive towards program funding and created economic growth in local economies.

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    Bibliographic Info

    Paper provided by American Association of Wine Economists in its series Working Papers with number 44088.

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    Date of creation: Oct 2008
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    Handle: RePEc:ags:aawewp:44088

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    Web page: http://www.wine-economics.org
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    Keywords: Community/Rural/Urban Development; Marketing; Public Economics;

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    1. Govindasamy, Ramu & Italia, John & Thatch, Daymon W., 1998. "Consumer Awareness Of State-Sponsored Marketing Programs: An Evaluation Of The Jersey Fresh Program," Journal of Food Distribution Research, Food Distribution Research Society, vol. 29(3), November.
    2. Adelaja, Adesoji O. & Brumfield, Robin G. & Lininger, Kimberly, 1990. "Product Differentiation And State Promotion Of Farm Produce: An Analysis Of The Jersey Fresh Tomato," Journal of Food Distribution Research, Food Distribution Research Society, vol. 21(3), September.
    3. Govindasamy, Ramu & Sullivan, Kevin P. & Puduri, Venkata S. & Schilling, Brian J. & Brown, Logan, 2005. "Consumer Awareness of the Jersey Fresh Promotional Program," P Series 36729, Rutgers University, Department of Agricultural, Food and Resource Economics.
    4. Julie A. Caswell, 1997. "Rethinking the Role of Government in Agri-Food Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 651-656.
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