MINUTES
Michigan Grape and Wine Industry Council
October 5, 2006
2:00 p.m.
Constitution Hall
Lansing, Michigan
Approved November 16, 2006

Members Present:
Mitch Irwin, Director, Michigan Department of Agriculture
Melinda Remer, Travel Michigan
Bob Jacobson, Leelanau Wine Cellars
Julie Wendt, Michigan Liquor Control Commission
Lou Gostinger, Lakeside Beverage
Ron Perry, Michigan State University (by teleconference)
Liz Berger, Chateau Chantal (by videoconference)
Amanda Danielson, Trattoria Stella (by videoconference)

Members Absent:
David Miller, St. Julian Wine Co.
Charlie Edson, Bel Lago Winery

Others Present:
Linda Jones, Michigan Grape and Wine Industry Council
David Creighton, Michigan Grape and Wine Industry Council
Karel Bush, Michigan Grape and Wine Industry Council
Liesl Clark, Michigan Department of Agriculture
Bob Craig, Michigan Department of Agriculture
Joe Herman, Herman Farms

Chair Irwin called the meeting to order at 2:10 p.m. He welcomed new members to the Council and introductions were made. Chair Irwin requested Council staff to draft a letter of appreciation to Council members who have completed their terms of service.

Adoption of Agenda

THE CHAIR ASKED FOR ANY REVISIONS OR ADDITIONS TO THE AGENDA AND HEARING NONE HE ORDERED ADOPTION OF THE AGENDA AS DISTRIBUTED PRIOR TO THE MEETING.

Minutes of the August 3, 2006 Meeting

MOTION: LOU GOSTINGER MOVED TO ACCEPT THE AUGUST 3, 2006 MINUTES. SECONDED BY MELINDA REMER. MOTION CARRIED UNANIMOUSLY.

STAFF REPORT - LINDA JONES

• Linda welcomed new members and mentioned that there will be a brief orientation meeting prior to the next Council meeting, which is tentatively scheduled for November 16, 2006.
• Linda commented that the last strategic planning session for the Council was in 2003 and that, with new Council members appointed, it would be appropriate to schedule a planning session sometime in 2007.
• Linda suggested that the Promotion Committee members remain after the Council meeting for a brief meeting.
• Linda referred to a folder of materials to be reviewed by Council members and especially brought attention to an HOUR Detroit article about the Michigan Wine Competition, and several articles that were run in response to an MSU press release
• Council staff is working on a media release about economic activity, Ag Innovation Grants, USDA grants, growth of the industry, to be distributed at the Great Lakes Expo
• Great Lakes Fruit & Veg Expo: Grape industries luncheon December 6
• Ag Innovation Grants: Requests for $4.3 million from the grape and wine industry; total of $250,000 awarded to five recipients in the industry; 26 wine-related proposals were not funded. Chair Irwin clarified that the committees were looking for innovation and growth, and that those proposals that showed benefit to the entire industry were scored higher than those that would benefit an individual winery
• Chair Irwin asked Linda to report on the status of the national economic impact study being conducted by MKF Research. Linda responded that the Council had allocated $22,000 toward the study and that a report is scheduled to be available to present at the Great Lakes Expo in December.
• Linda reviewed the contents of the Fiscal 2007 Plan (Attachment A).
• Wine Industry Annual Meeting will be March 1-2 at Crystal Mountain Resort in Thompsonville
• The Business Development Committee is comprised of state agencies that work with the wine industry: MDA, MSU Product Center, Small Business Technology Development Center (SBTDC), Michigan Liquor Control Commission (MLCC), Michigan Economic Development Corp.(MEDC). Linda will develop a draft mission statement before the next Council meeting.
• There will be a financing workshop in late November as a follow-up to the Ag Innovation Grants. Mike DiBernardo, the grant administrator for the program, will assist Linda in developing the workshop.

RESEARCH AND EDUCATION ADVISORY COMMITTEE (REAC) REPORT - JOE HERMAN

• The committee received seven proposals from MSU researchers for funding. All were recommended for funding with one exception. Complete proposals are available for review in the Council office. Summary of the proposals and minutes from the committee's September 7, 2006 meeting are attached (Attachment B).

MOTION: LIZ BERGER MOVED THAT THE COUNCIL APPROVE FUNDING FOR THE RECOMMENDED RESEARCH PROPOSALS FOR FY07. MELINDA REMER SECONDED. MOTION CARRIED UNANIMOUSLY.

PROMOTION COMMITTEE REPORT - LIZ BERGER

• Liz reported that the Promotion Committee has not met since the last Council meeting, but there are ongoing projects:
  • Strategic Web Plan: Liz met with Linda Jones, Karel Bush and David Creighton to review the web plan proposed by LKF Marketing. Council staff has eliminated some tasks and prioritized others within the plan to reduce the cost to the Council and to use limited budget resources most efficiently.
  • Michigan Wine Country magazine: Council staff continually takes steps to keep Council costs as low as possible for this publication
  • April Wine Month: Council staff will be promoting Michigan Wine Month more heavily for 2007
• Chair Irwin asked whether any plans had been made to participate in the National Governors' Conference. Liz responded that Rick Coates, with Leelanau Peninsula Vintners, has been the primary winery contact and that the wineries in Northern Michigan are enthusiastic about participating.
• Chair Irwin referred to the proposed budget plan and asked why funds were eliminated for License to Steal and the Chicago FMI/Fancy Food Show. Linda responded that License to Steal is a marketing conference that has been very beneficial for staff in the past, but there is not one scheduled at this time. The FMI/Fancy Food Show was only attended by two wineries last year, so Council staff felt that Council resources could be better spent on the web site, which benefits all wineries instead of just the two that participated in the show.

NEW BUSINESS

• Annual Plan 07: Linda asked if the members had any questions regarding the Annual Plan for FY07.

MOTION: LOU GOSTINGER MOVED THAT THE COUNCIL ACCEPT THE PROPOSED PLAN AND BUDGET EXPENDITURES FOR FY07. LIZ BERGER SECONDED. MOTION CARRIED UNANIMOUSLY.

• Eligibility Review of New Winery:
  • Hickory Creek Winery
    Linda Jones stated that she received an application from Hickory Creek Winery, to be added to the Council's list of producers of Michigan wine. After investigation, Linda recommended to the Council that Hickory Creek Winery be approved.

MOTION: LIZ BERGER MOVED THAT THE COUNCIL ACCEPT THE RECOMMENDATION AND APPROVE HICKORY CREEK WINERY AS A ?PRODUCER OF MICHIGAN WINE" FOR PROMOTIONAL PURPOSES OF THE COUNCIL. LOU GOSTINGER SECONDED. MOTION CARRIED UNANIMOUSLY.

• There was additional discussion regarding eligibility requirements and the suggestion was made that a committee be formed to review the current eligibility requirements and determine whether they need to be updated. That committee will be comprised of Julie Wendt, Bob Jacobson, Amanda Danielson, Liz Berger, and Melinda Remer.

PUBLIC COMMENT
No public comment.

COUNCIL MEMBER REPORTS

• Ron Perry - There are four faculty positions posted in the Horticulture Department. Ron will be interviewing candidates for two of the positions next week. In addition, the viticulture position closed October 1, but they will continue to receive applications. There are 7-8 applicants now, with some good candidates. There are very few candidates available who have a PhD and viticulture experience. There is a lot of competition from other states for these candidates. The enology position closes November 1. There are also few candidates available in wine science and enology with a master's degree, so they are looking at the food science candidate pool.
• Lou Gostinger - His wholesale Michigan wine business is up 28%. Lou speculated that they might be seeing some negative impact from the late school start, because they had a record August, but worst September in years. Beer sales are up 5.2%, wine sales are up 6%. Lou commented that increases might be due to lower fuel prices and greater discretionary income.
• Julie Wendt - 299 direct shipper licenses have been granted. There is a case before the State Supreme Court regarding "wine dueling." National Wine and Spirits is challenging a Michigan law that keeps Authorized Distribution Agents (liquor distributors) from acquiring the right to "duel" ? distribute wine brands in new areas.
• Melinda Remer - The new Pure Michigan promotion is very successful. Inquiries are up considerably. Melinda provided a brief review of the Pure Michigan brand campaign. Travel Michigan is presenting their branding plan to the industry at a meeting October 26.
• Bob Jacobson - Leelanau Cellars is expanding in several ways. They have increased vineyard by 50-60 acres over the past four years, they are creating a new tasting room, restaurant and marina, and the winery will be moved and enlarged from 10,000 to 36,000 square feet.
• Joe Herman - Harvest is underway, this has been the wettest August and September in 30 years; Pinot Gris will be a very nice wine; new vineyards planted; first Sauvignon Blanc will he harvested from a three-year-old vineyard.
• Liz Berger - Harvest shows very good quality, they're selling out of some wines before they can get them to the tasting room, lots of fall color tours already, tasting room is very busy, Harvest Festival is this weekend ? they've received lots of media coverage and inquiries
• Amanda Danielson - It's been an extraordinary year, very busy; film festival brought a lot of people, then Epicurean Classic; increase in local tourism within the state and Chicago and Detroit travelers; lots of interest in winemaker dinners
• Bob Craig - Bob briefly summarized Ag Development programs and responsibilities for the new Council members; Ag Innovation Grants ? there will be PR presentations later this month to announce and congratulate the winners

OTHER BUSINESS
Next meeting will be at Constitution Hall, in Lansing; November 16, 2006.

ADJOURNMENT
The meeting was adjourned at 4:00 p.m.

The following documents are on file in the Michigan Grape and Wine Industry Council office and can be obtained upon request:

1. Michigan Grape and Wine Industry Council Fiscal 2007 Plan
2. Research and Extension Committee recommendations for research proposals, and minutes from September 7, 2006 meeting