ADOPTION OF AGENDA

MOTION: THE AGENDA WAS AMENDED TO ADD "TTB LETTER ON LABELING CHANGES" TO THE "NEW BUSINESS" SECTION OF THE AGENDA. LIZ BERGER MOVED THAT THE COUNCIL ADOPT THE AGENDA AS AMENDED. AMANDA DANIELSON SECONDED. MOTION CARRIED UNANIMOUSLY.

MINUTES OF THE NOVEMBER 13, 2007 MEETING

THE CHAIR ASKED FOR ANY REVISIONS TO THE MINUTES OF THE NOVEMBER 13, 2007 MEETING. STEVE ARBAUGH MOVED THAT THE COUNCIL APPROVE THE MINUTES. LIZ BERGER SECONDED. MOTION CARRIED UNANIMOUSLY.

STAFF REPORTS - Linda Jones

Staffing Planning - Linda described the staffing changes she has recommended to MDA, pursuant to David Creighton's retirement.

Status on Exemptions to Executive Directives - Annual Meeting, Michigan Wine Competition and Great Lakes Expo events have been pre-approved for 2008. There is still a moratorium on out-of-state travel.

Annual Meeting Planning - Registrations are coming in; sponsorships and exhibitor spots are quickly being taken. Linda noted that a Distinguished Service Award was presented to Sandra Silfven in 2002, and that it's possible that the industry would feel that there are others worthy of the award. She will send an email to industry members requesting nominations for the award in 2009. A Nominations Committee may be formed to review.

Federal Grant Opportunities - Linda outlined a potential grant proposal for funding from USDA's Federal/State Market Improvement Program (FSMIP). The proposal will have a wine and food focus: Developing wine and food experiences as contributors to Michigan's agriculture and tourism economies. Linda proposed a Council match of up to $15,000 to be allocated from the FY 2009 budget. Deadline for the grant application is January 31, 2008. Liz Berger commented that a similar program in New York has been very successful and that they may have resources available to assist. Steve Arbaugh commented that distributors may be interested in participating and/or contributing. Linda will follow up with Steve. Melinda Remer offered in-kind help in the form of a television spot, e-newsletter, web content, and Michigan Travel Ideas magazine. She will provide a letter of support showing their in-kind match.

MOTION: BOB JACOBSON MOVED TO PLEDGE MATCHING FUNDS OF UP TO $15,000 TOWARD A USDA FEDERAL STATE MARKET IMPROVEMENT GRANT APPLICATION BY THE COUNCIL TO INCREASE THE AMOUNT OF MICHIGAN WINE AND FOOD SERVED AT MICHIGAN RESTAURANTS. LIZ BERGER SECONDED. MOTION CARRIED UNANIMOUSLY.

VITICULTURE AND ENOLOGY RESEARCH AND EDUCATION ADVISORY COMMITTEE (REAC) REPORT - Dave Miller

Dave read the Committee's report (Attachment B), and submitted a proposal for an Enology Education Partnership between the Council and Michigan State University (Attachment C).

MOTION: LIZ BERGER MOVED TO ESTABLISH AN AGREEMENT WITH MICHIGAN STATE UNIVERSITY THAT WILL FUND A $24,272 GRANT IN CALENDAR 2008, TO CONDUCT ENOLOGY EXTENSION SUPPORT FOR THE MICHIGAN WINE INDUSTRY. BOB JACOBSON SECONDED. MOTION CARRIED UNANIMOUSLY.

PROMOTION AND CONSUMER EDUCATION COMMITTEE REPORT - Liz Berger

Liz reported that the committee held a teleconference meeting January 10 where several promotional items were discussed, including:

• Strategic Planning Outcomes, from this committee's perspective
• Committee Title and Mission Statement
• April as Michigan Wine Month
• Educational Resources/Information for the Trade
• Annual Meeting Promotion/Marketing Sessions
• Website Upgrade
• Criteria for Council Participation in Events
• 2008 Michigan Wine Country Magazine
• Wine Appreciation Course to be conducted by Dr. Ron Perry at Michigan State University
• "Come to the Michigan Table" - Food and Wine Experiences Grant Proposal
• License to Steal - Regional Marketing Conference

STRATEGIC PLANNING WRAP-UP - Bob Jacobson

Bob reviewed today's Strategic Planning wrap-up session, which resulted in a draft plan for the Council to follow for the future. Bob commented that the "Annual Plan" supplements this, and that this will be of great benefit to future Council members.

MOTION: MELINDA REMER MOVED THAT THE COUNCIL APPROVE THE STRATEGIC PLAN REPORT AS REVISED BY THE COMMITTEE ON JANUARY 24, 2008. BOB JACOBSON SECONDED. MOTION CARRIED UNANIMOUSLY

NEW BUSINESS

Proposal to Conduct 4th-year Wine Appreciation Course at Michigan State University
Dr. Ron Perry (via phone) reviewed a preliminary course description for "Exploring Wines and Vines" (copies distributed to Council members prior to the meeting) to be offered at Michigan State University in Fall 2008. Dr. Perry noted that one class session would be devoted to Michigan wines, and asked for the Council's support for the course.

MOTION: DAVE MILLER MOVED THAT COUNCIL STAFF DRAFT A LETTER TO DEAN ARMSTRONG EXPRESSING THE COUNCIL'S SUPPORT FOR THE COURSE; AND THAT THE COUNCIL WOULD ENTERTAIN FURTHER SPECIFIC REQUESTS FOR ADDITIONAL SUPPORT. MELINDA REMER SECONDED. MOTION CARRIED UNANIMOUSLY.

MarketMaker Project - Michigan State University's Product Center is the primary contact for this project. Linda Jones stated that the MarketMaker web site is live and encouraged wineries to add detail to their listings to gain the most benefit from the web site.

USDA Agriculture Statistics Funding - Linda Jones reported that because of budget restraints, it is possible the Rotational Fruit Survey will be conducted every five years instead of every three years. The Council allocated funding for the survey in 2006.

TTB Letter on Labeling Changes - Linda Jones read a draft letter to the Alcohol and Tobacco Tax and Trade Bureau (TTB) expressing concern about changes being proposed for the labeling of wines. Julie Wendt will consult with the Michigan Liquor Control Commission to ensure that the Commission does not have concerns about the letter. Chair Koivisto will review the letter with Linda before it is sent.

Rural Business and Enterprise Grant (RBEG) (tabled earlier in the meeting) - Linda described a USDA grant program, Rural Business Enterprise Grants, that is designed to stimulate rural job creation or retention. She feels that the Council's planned activities in the areas of Enology Extension support, a research project with MSU to provide additional resources for vineyard site selection, and MSU Extension's proposed Winery Development Conference in 2009 may be eligible funded activities for a Technical Assistance Grant under this program. The deadline for application is late February/early March.

MOTION: STEVE ARBAUGH MOVED THAT THE COUNCIL PLEDGE MATCHING FUNDS UP TO $40,000 TOWARD A USDA RURAL BUSINESS ENTERPRISE GRANT APPLICATION BY THE COUNCIL TO PROVIDE TECHNICAL ASSISTANCE TO MICHIGAN WINEMAKERS AND NEW ENTRANTS INTO THE WINE INDUSTRY. DAVE MILLER AND AMANDA DANIELSON SECONDED. MOTION CARRIED UNANIMOUSLY.

COUNCIL MEMBER REPORTS

Amanda Danielson - She will not be at the Annual Meeting, but is working on "Anatomy of a Wine Dinner" for the April Wine Month session. Business at the restaurant is great; wine dinners are a huge success.

Julie Wendt - There are 507 direct shipper permits, and four new small winemaker licenses. Representative Byrum has drafted legislation that will impact small craft distillers.

Liz Berger - It's a little slow, but Wine Immersion Seminars and cooking classes are very popular.

Dave Miller - Juice sales fell off, but wine sales are strong. This is a slow time of year. No winter damage yet. Upcoming Winemaker's Dinner is sold out.

Melinda Remer - Michigan Travel Ideas magazine has a spread on wine and food, plus there will be more information on the web site. Circulation of the magazine is 850,000; 525,000 are mailed with Midwest Living, and most of the rest are distributed at Welcome Centers. Wine Month promotions include the WJR Travel Show ? one wine region will be highlighted each week in April. They're revamping their web site and will have new promotional opportunities for individual wineries and trails. Linda Jones added that she saw the winery-related video at a Welcome Center and that Welcome Center employees commented that the videos seem to draw travelers into the literature distribution area, increasing requests for Michigan Wine Country magazine.

Steve Arbaugh - Steve provided a handout to the Council. In summary, for Bayside Beverage, Michigan wine case sales increased by 7.1%, while overall wine case sales grew 2.9%. Michigan sales represent 11.7% of total cases sold, up from 11.2% in 2006. Michigan wines provided 27.6% of their total case sales increase. As a distributor, it is clear to Steve that Michigan wines' significance to and acceptance by consumers is growing. In addition, wine dollar sales increased 5.7%, and the average case sold was priced 3.1% higher than 2006. It is evident that we are in a period of trading-up in retail wine sales. There seems to be an increased level in pricing elasticity, and Michigan wineries may have an opportunity to increase prices to meet rising costs and improve profitability. This also could encourage the establishment of new Michigan wineries as the return on investment becomes more favorable.

Bob Jacobson - Bob commented that Steve's statistics and observations confirm his own observations: that regional wine sales are a strong component throughout the trade.

Chair Don Koivisto - Chair Koivisto reported that revenue projections for the State of Michigan were flat, while national revenue projections were down. After the Governor's State of the State address (January 29), we will know more. Agriculture sector is doing well, with significant growth. The Agriculture Commission is working on GAAMPS (Generally Accepted Agricultural Management Practices) dealing with local zoning and Right to Farm legislation that may have an impact on wineries. MDA provided material to the Governor's office to be considered for inclusion in the State of the State address; Select Michigan program might be mentioned. There is a national restaurant chain (proprietary information, so cannot be named as yet) that is interested in featuring Michigan products and wines. Many retailers are also expanding their Michigan product line.

PUBLIC COMMENT

No public comment.

OTHER BUSINESS

2008 meeting dates: May 8, August 7, November 13.

ADJOURNMENT

MOTION: BOB JACOBSON MOVED THAT THE MEETING BE ADJOURNED. STEVE ARBAUGH SECONDED. MOTION CARRIED UNANIMOUSLY.

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

A. Letter to Winery Owners

B. Research and Education Advisory Committee Report

C. Proposal for Enology Education Partnership Between Michigan Grape and Wine Industry Council and Michigan State University