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How Wine Growing in Walla Walla Supports the Economy How Wine Growing in Walla Walla Supports the Economy

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Restoration Calls / ECONOMY

How Wine Growing in Walla Walla Supports the Economy

The Pepper Bridge winery in Walla Walla, Wash.(AP Photo/Elaine Thompson)

photo of Catherine Hollander
May 31, 2012

Walla Walla boomed to life in the mid-1800s on the dry, fertile soil of southeastern Washington, supplying gold prospectors on their way to Idaho and Montana with shovels, bacon, and whiskey. Its first storefronts were made of wood and hastily built, but they quickly gave way to brick and mortar, along with roads, schools, a prison, and the state’s first bank. The early settlers grew wheat in the region’s rich soil, as well as potatoes, corn, and barley. A few new industries sprang up alongside farming over the next century, including food processing and industrial manufacturing, but by the dawn of the 1990s, the economy had fallen into a doze.

While a tech wave pushed unemployment down to 4 percent in the nation at large, Walla Walla’s jobless rate stayed above 7 percent for the entire decade. The city appeared to be following a path all too familiar in rural America, its population and economy stagnating as malls on the outskirts supplanted downtown businesses and crowded out the local character. If there was hope for renewal, it sprang from a vine: Walla Walla still had its soil, and the soil, a few enterprising locals had discovered in the late 1970s, could grow something a lot more lucrative than grain.

Wine made from grapes harvested from the corners of local wheat fields was impressing critics and signaling the potential to power the town’s economy and create thousands of good-paying jobs. But to grow from a boutique enterprise to a full-scale industry, the region’s vintners needed workers – and those workers needed specific skills.

 

Walla Walla Community College saw the opportunity to train those workers in a program tailored to the local wine industry’s needs. The college’s graduates populated the fields, wine laboratories, cellars, and tasting rooms that unfurled like tendrils across the county. As the industry grew, so did the city’s tourism business, its restaurants, and its hotels. The number of wine-related jobs in the region nearly doubled over the past four years.

America’s economy today feels as sleepy as Walla Walla’s two decades ago. Middle-class workers were slammed by the financial crisis, their jobs disappearing, wages stagnating, and future uncertain. To put them back to work, the nation would do well to consider Walla Walla, which seems to have cracked the code on how to get mid-skill workers back into the labor force while revitalizing an economy.

If the country needs a model, this could be it.

An Idea Takes Root

Early settlers planted the first wine grapes in Walla Walla in the mid-1800s, but the industry never took off. Then, in the 1970s, a local machinist and a wheat farmer began making wine at home, started their own labels, and earned national acclaim for the wines produced by their now well-known Leonetti Cellar and Woodward Canyon. Other wineries followed. In 1990, Los Angeles Times writer Dan Berger called southeastern Washington “one of the most exciting wine regions in the world.”

But the area had barely 20 wineries in the late 1990s. The limiting factor wasn’t the availability of land or the nation’s appetite for the region’s wine; it was that making wine is difficult and requires workers with detailed training.

Winemaking involves constant decision-making, starting with determining when to harvest the grapes. The longer they ripen on the vine, the sweeter the grapes become. Once harvested, grapes are sorted to remove the damaged, underripe, or raisin-like fruit. Workers or machines remove the stems and press the juice from the grape. Yeast is added to ferment the juice, converting the sugars to alcohol. Both the temperature and the vessel in which the wine is then aged – oak and stainless steel are popular choices – influence the taste and style of the final product. Once the wine has matured to the winemakers’ specifications, it is clarified and bottled. The process is not intuitive; workers need to be taught.

Steven VanAusdle had a hunch that Walla Walla Community College was the place to do the teaching.

In 1999, VanAusdle, the college’s president, approached Myles Anderson, a longtime instructor at the college and owner of Walla Walla Vintners, with the idea for training students to work in the local vineyards. Anderson, who had co-founded his boutique winery in 1995, surveyed the handful of winemakers in the region. Only one of them had formal training in the craft, but all said that having trained workers would be immensely helpful.

The enology and viticulture training center the two men originally envisioned was modest: a small, metal pole building containing two classrooms, a wine production area with a press, crushing equipment, and a place to park a tractor. This was the vision they pitched to local business leaders in a series of biweekly lunches that VanAusdle hosted in the college’s boardroom, in hopes of soliciting donations. The pitch worked. As money rolled in, the plans grew, expanding to a multimillion-dollar center for wine training.

Anderson and VanAusdle didn’t have any economic data to make the case to would-be donors – just Anderson’s informal survey and a gut feeling that the graduates would support an expanding industry. “We had 19 wineries at that time,” Anderson says. “We were talking about maybe preparing to have 50 in our area over the next 10 years, and that was just a SWAG – a simple, wild-ass guess.”

It was good enough for donors such as Jock Edwards, president of a local nonprofit. “It was pretty clear that [the wine industry] was on the rise, and the training and the job skills were transferable to immediate career opportunities,” Edwards says. His organization, the Sherwood Trust, gave the center two grants totaling $842,000, the largest private donation it received. The center also got funding from the Port of Walla Walla and the Washington Legislature.

Walla Walla Community College dedicated its $4.1 million Center for Enology and Viticulture in October of 2003. The school made a critical choice when it opened the program: It involved local industry from Day One.

Connecting Colleges With Local Industry

Early studies suggest that community colleges with close connections to local labor markets are the most successful at getting students into the workforce, says Michael Greenstone, director of the Hamilton Project, an economic-policy initiative at the Washington, D.C.-based Brookings Institution.

The data aren’t conclusive yet, but support for the idea is growing. In May, the Organization for Economic Cooperation and Development released a framework designed to help countries enhance their skills-training programs. The 109-page document describes the importance of partnerships with industry in areas ranging from curriculum design to apprenticeships.

“When employers are involved in designing curricula and delivering education programs at the post-secondary level, students seem to have a smoother transition from education into the labor market,” the OECD writes. “Workplace training also facilitates recruitment by allowing employers and potential employees to get to know each other, while trainees contribute to the output of the training firm. Workplace learning opportunities are also a direct expression of employers’ needs, as employers will be ready to offer opportunities in areas where there is a skills shortage.”

Today, there are many more employers in Walla Walla to offer those opportunities than there were in 2000. The change is reflected in the very landscape of the city, where green fields of spring wheat now share the landscape with the brown soil of Walla Walla’s young vineyards. Washington has become the third-largest wine producer in the country, and Walla Walla County has the highest number of wineries in the state, with well over 100.

Walla Walla didn’t escape the recession entirely. The county’s unemployment rate was 8.2 percent in March, in line with the national rate. But it wasn’t ravaged by the downturn, either – certainly not to the extent the rest of the country was. At its worst, unemployment in Walla Walla County, for which data are not seasonally adjusted, reached 9.2 percent. The rate for the country as a whole, on the other hand, climbed to 10.6 percent without seasonal adjustment. And today, neighboring Franklin, Benton, and Columbia counties have unemployment rates that are 1, 2, or more than 3 percentage points higher than Walla Walla’s.

Economists say that the wine industry deserves credit for the relative employment success of Walla Walla through the downturn. One economic-modeling firm recently estimated that the absence of the wine industry would have led to a period of economic stagnation that would have lasted from 1997 to at least 2020. The numbers tell the story: Wine-related jobs in the Walla Walla Valley region, which include work at hotels, restaurants, specialty retail, and entertainment dependent on the industry, grew from nearly 3,300 to 6,000 between the start of the recession in 2007 and 2011. To put it into better perspective, the percentage of the region’s jobs that are wine-related grew from 0.8 percent in 1997, before the industry took off and the college began its skills-training program, to 14.4 percent in 2011.

Graduates of the college’s skills-training program are occupying many of the new local wine-related jobs. Since 2002, 124 have earned associate in applied arts and sciences or associate in arts degrees, and 174 have received one-year certificates in enology or viticulture.

Not all of the program’s graduates responded to a recent alumni survey, but the 84 who did suggest that the program is very good at placing students within the wine industry.

Sixty-nine of the 84 are employed in the wine industry. The largest share – 40 graduates – are winemakers or assistant winemakers. Others found work in cellars, wine sales and promotion, vineyard management, and tasting rooms. More than 70 percent of those working in the industry are employed full time; Adecco, a job-placement firm, found that just 40 percent of U.S. college students are able to find full-time work in their chosen field.

VanAusdle says that those who aren’t working in their degree field had elected not to. “All of our students who desired employment in the wine industry have been able to find jobs in the industry,” he said in an e-mail. And more than half opted to reside in the valley after graduation.

Their inclination to stay reflects the close ties between the wine industry and the college. Nicholas Velluzzi, then a doctoral candidate in geography at the University of Washington and now director of institutional planning and assessment at Walla Walla Community College, found that the success of the training program relied on just those connections. Through 60 interviews with local producers and former and current students in 2007, Velluzzi concluded that the Center for Enology and Viticulture was effective in functioning as a “labor market information clearinghouse”; in other words, establishing direct connections to jobs.

“An overwhelming majority of students enter the industry through their affiliation with the center,” he writes. “Job openings are rarely posted in local classifieds or on Internet job boards but are announced informally by word-of-mouth, which suggests the importance of social networks and the highly localized nature of the circulation of labor market information.”

The program at Walla Walla doesn’t just have those ties; it was built on them. Training workers whom local winemakers would be likely to hire was at the heart of the college’s plan from the beginning, and winemakers were involved in everything from helping to design the building that houses the program to writing the curriculum. “They wanted to make sure that it was skill-based, that it was practical and really concrete,” Anderson says. The college offers classes on weather for viticulturists, pesticide licensing, and winery-operations management, and has a significant hands-on component. Students start the year during “crush,” or the grape harvest period, by working in the fields. Not only do they get to know potential employers from the start but they also come back into the classroom with a “pretty good sense if that’s what they want to do,” VanAusdle says.

The way the Walla Walla wine industry took off – and transformed the city in the process – wouldn’t have happened to the same extent without the enology and viticulture program. “Wineries don’t just pop up without having people who can do the work,” says Arum Kone, a regional labor economist at the Washington State Employment Security Department. “I think [the program has] had a pretty amazing impact in terms of looking at capital that’s being invested in the valley.”

Karl Storchmann, an economics professor at New York University who has studied the region’s wine industry, agrees. Even though many of the grapes used to produce the wine come from the nearby Columbia and Yakima valleys and much of the wine is shipped for consumption elsewhere, “The human capital is located in Walla Walla, thanks to [the] enology center,” he said in an e-mail. “I am sure Walla Walla would look very different from now [without] the center.”

More than half of U.S. employers reported having trouble filling critical positions in 2010 because of a lack of available talent, one of the highest proportions among the 34 members of the Organization for Economic Cooperation and Development. If the Walla Walla model is scalable, it could help close that gap.

A Vine Grows in Umpqua

The evidence that the model can be applied outside of Washington state is nestled along the North Umpqua River in Douglas County, Ore.

Douglas, which had long relied on the timber industry, was hit harder by the recession than most places in the United States. Non-seasonally adjusted unemployment climbed to 17.7 percent in March of 2009, nearly double the national rate at the time. The economic woes were enough that the area was considered a “recovery zone”– a place with significant poverty, unemployment, home foreclosures, or general distress.

Just before the recession hit, Umpqua Community College, located just north of Roseburg, in Douglas, began studying how it could implement a program closely modeled on Walla Walla’s. The wine industry in southern Oregon was slowly growing, much like southeastern Washington’s in the late 1990s. There were a few dozen wineries in the Umpqua area, and the college wanted to be the one to train their workers. And unlike the Walla Walla program’s founders, Umpqua had a solid economic reason to believe that the program would succeed. An economic impact study from 2007 estimated that $115 million in additional income and 5,000 new jobs would be added to the region if the program could launch.

Umpqua Community College established its wine program in the fall of 2008. But Umpqua also wanted a physical center like the one on Walla Walla’s campus and, somewhat counterintuitively, found an opportunity in the recession to get it.

After a local lawyer contributed $800,000 to the wine institute to get the project off the ground, capital began flowing. The wine center received more than 200 individual gifts that generated $2.5 million. The college raised the rest of the money for the $7 million center through Recovery Zone Bonds, which were created by the American Recovery and Reinvestment Act of 2009 to finance projects with economic development outcomes in distressed areas. With the funding in place, construction on the facility was completed in December 2011.

Umpqua’s version of Walla Walla’s program also hints at how the model may be expanded. Unlike its Washington neighbor, the Oregon college offers distance learning, which extends the college’s reach into nearby counties. Chris Lake, director of the college’s Southern Oregon Wine Institute, hosts weekend labs that give the distance-learning students the hands-on time they need to practice the craft.

Like Walla Walla’s, Umpqua’s students have their own wine label. But Umpqua also planned its wine center so that just one-third of its production capacity is devoted to student use. The remaining two-thirds is leased to alumni to make what Lake calls a “business incubator,” in which graduates use the facilities to bottle and sell their own wines.

“This will be the catalyst [that] southern Oregon’s burgeoning wine industry needs to spark the region’s economic resurgence,” the institute’s website optimistically proclaims.

Roseburg has yet to see the economic benefits that Walla Walla enjoys. Unemployment remains close to 12 percent in Douglas County. The region’s wines have not received the national acclaim that those of their neighbors to the north did, which Lake says was a major driver of Walla Walla’s economic success. “We’re still 10 years behind where Walla Walla is,” he says. But he’s hopeful.

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