THE ARIZONA WINE TOURISM INDUSTRY – 2017 UPDATED STUDY Northern Arizona University for the Arizona Office of Tourism
The wine industry in Arizona has a long, colorful, and truly unique history. In a very real sense, Arizona was both the first and the last state in the union to capitalize on its terroir to make fine wine. Following the Columbus voyage of discovery in 1492, the Spanish search for gold became the driving force for new world exploration. Southern Mexico and, subsequently, South America became the focus because of the fabulous wealth that was quickly discovered. North America could wait. That is, until tales of the Seven Cities of Cibola surfaced.
1528 to 1539
In 1528, the remnants of the ill-fated 600 member Narváez 1527 expedition to Florida was washed ashore on Galveston Island on the Texas coast, driven there by hurricanes. Ultimately, there were only four survivors, led by Álvar Núñez Cabeza de Vaca. He and a Moroccan slave named Esteban along with two others, spent eight years working their way on foot across Texas and New Mexico into Arizona and then south into Mexico where they were finally reunited with their Spanish countrymen, reaching Mexico City in 1536 and returning to Spain in 1537. They provided extensive reports on flora, fauna, native customs of the people they’d met on their journey, and stories and rumors of fabulous wealth they had been told about in the seven cities of Cibola. In 1539 a Franciscan Priest, Fray Marcos de Niza, was appointed to head an expedition to find the seven cities and Esteban was sent along to guide him. Esteban went ahead of the group, leaving markers to guide them, and ultimately disappeared or, as reported, was killed by the Zunis. The expedition returned to Mexico and Marcos de Niza said that he had seen Zuni, supposedly one of the seven cities, on a high hill from a distance but he said he feared that his force was too small and if he tried to enter the city, they would all meet the same fate as Esteban.
1540 to 1604
In 1540 Francisco Vázquez de Coronado y Luján, the Governor of Nueva Galicia (New Galicia), a province located northwest of Mexico City and comprising the contemporary Mexican states of Jalisco, Sinaloa and Nayarit, determined to mount his own expedition, using Marcos de Niza as a guide. He put together a far larger group, consisting of 400 Spanish soldiers, 2,000 Mexican (Indian) soldiers, several Native and African slaves, four Franciscan monks (including Marcos de Niza), and numerous family members and servants who also joined in. He entered Arizona south of Willcox in the Sulfur Springs Valley of what is now Cochise County and explored at length all the way to Kansas. Elements of his force were the first Europeans to see the Colorado River, the Grand Canyon, and many other locations in Arizona, New Mexico, Texas, Oklahoma, and Kansas before returning to Mexico in 1542, broke, discouraged, and disappointed, having found no golden city. All of this was within 50 years of the Columbus voyage, far before most of the rest of North America had been touched. In 1583, Spanish explorer Antonio de Espejo was sent from Mexico City and became the first European to explore the Verde Valley. He was followed in 1598 by Farfan de los Godos and a second expedition that year by Juan de Oñate, who revisited in 1604. The Padres quickly began planting so-called “Mission Grapes” to make their sacramental wine and other favorite wine varieties soon followed.
The Grapes and the Role of the Church
There are reports of European grapevines being established in Southern Arizona as early as the mid-16th century, as the Spanish explorers recognized similarities to their home soils in Spain, which would make these the first wine grapes planted in the United States. Nine missions were established between 1629 and 1691, with each establishing their own vineyards. Special success was attained in Southern Arizona north of Nogales in what is now Santa Cruz County. Missions and vineyards were also established in New Mexico during this period. The grapes flourished and, as permanent settlements independent of the missions were established, such as Tubac in 1752, classical Spanish grape varietals such as Tempranillo were established. The first wine grapes were not planted in California until 1779 at the Mission San Diego Alcalá. By that time, Arizona had a 200 year head start and the number of wine grapes grown in Arizona and New Mexico far exceeded the production in California well into the 20th Century, a lead they had dramatically increased as mining became a driving economic force in Arizona, attracting many European wine drinking miners. And then political history intervened and literally changed the rules.
Arizona became the 48th and final of the contiguous states in 1912. In 1914 a small group of prohibitionists in Phoenix ushered a bill through the state legislature bringing wine production and consumption to a halt. Absolute prohibition came to Arizona on January 1, 1915, five years before federal prohibition came about.
When federal prohibition was established, it happened with a constitutional amendment and was widely debated and well discussed all over the country. Under federal prohibition, many vineyards, especially in California, stayed in business because it allowed winemaking for medicinal and sacramental purposes and for personal consumption. In fact, you could make up to 60 gallons a year for your family. At harvest time, railroad box cars were lined up in California wine country, loaded with lug boxes full of wine grapes for shipment to home winemakers all over the country, keeping at least some of those vineyards in business. No such thing occurred in Arizona. All production, sale, ownership, possession, and consumption were outlawed – even medicinal, scientific, and sacramental uses were forbidden. When it looked like the Catholic Church was going to take a case all the way to the Supreme Court, the state met with the Bishop in Phoenix and a deal was struck whereby if a priest used a small amount of wine during mass, he wouldn’t be arrested, but the law wouldn’t be changed. There was little public discussion of the bill and apparently none of the growers in the state, all of whom were in higher elevations at some distance from the capital, even knew about the new rules until they were being enforced.
Prohibiton’s Effect on Arizona
Henry Schuerman, a large grower and winemaker with vineyards located along Oak Creek, near Red Rock Crossing outside of Sedona, had built a very lucrative business selling to the international miners in the nearby “Billion Dollar Mining Camp,” of Jerome. He didn’t hear about the law until the Yavapai County Sherriff arrived to tell him he was out of business. Schuerman said, “What? You can’t grow food?” He was promptly arrested and hauled off to jail in Prescott, the County Seat. It didn’t take long for the word to get around and for the wine industry to completely disappear in Arizona. When federal prohibition took effect in 1920, most people forgot about the Arizona law completely.
When the federal law was reversed in 1933, and future control of alcoholic beverages was given to the states, no one even thought about restoring production here. Arizona adopted the so-called three tier system of distribution utilized by many states. The state licenses a distributor to obtain alcoholic beverages from a producer or importer, bring them into the state, and, in turn, sell the beverages to state licensed retailers such as liquor stores, bars, and restaurants. End consumers comprise the third tier where the alcoholic beverages are purchased and consumed.
No Winemakers for Decades
No discussion of growing grapes and making wine occurred for almost 40 years. In 1970, Professor Gordon Dutt came to the College of Agriculture at the University of Arizona from his prior position at the University of California, Davis, known as California’s top wine school. He wasn’t a winemaker. He was a soil scientist, specializing in hydrology, who had done numerous soil studies for vineyards in California. When he began working in Arizona, he quickly concluded that Arizona’s soils could be well suited for growing wine grapes. Knowing nothing of the wine industry history here, he set out to see if he was right, placing several wine grape test plots around the state for study. Based on the apparent success of those sample plots, he approached Governor Raúl Castro, explaining that he felt the state was missing an opportunity to establish a new cash crop in the state. The Governor was encouraging but thought stronger data was needed. He helped develop a $95,000 grant in 1976 to conduct a full statewide study and tied in New Mexico, Colorado, and Utah, making it a ‘four corners’ study with shared data. In 1979 as the grape vines began to produce fruit, Dr. Dutt contacted an enologist (winemaker) friend at UC Davis to come to Tucson to make some test batches of wine from the young grapes. The batches were deemed to be quite good, with the favorite coming from a plot near Sonoita, in the hills southeast of Tucson. With test results in hand, it was time to go back to the Governor, who agreed to proceed. Opposition came from the liquor distributors who wanted to restrict product sales to those wineries with distribution agreements – something no winery could possibly have, yet. After a serious battle, a bill was finally passed allowing winemaking to return to Arizona – but with major restrictions on how the product could be sold or shipped, seriously limiting the potential of the fledgling industry.
The first license was issued in 1982 to R.W. Webb, who had seen the study at the U of A. He started his operations in Vail, near Tucson. He quickly determined that it was too hot on the desert floor and began the first major vineyard in Arizona in the foothills of the Chiricahua Mountains near Willcox in Cochise County.
The second license went to Bill Staltarni, a small producer in Yavapai County, and Gordon Dutt established Sonoita Vineyards with license #3 in an attempt to demonstrate that high quality wine could be produced in Arizona. His 1986 Reserve Cabernet Sauvignon was the first Arizona wine served at the White House and was served for the Bush inauguration in 1989. However, the legal restrictions were so severe that only a total of nine licenses had been issued by 2000. Battles raged in the legislature and the courts each year to loosen or tighten restrictions. Similar activity was also taking place elsewhere around the country – at least until 2005, when one of the cases made it all the way to the U.S. Supreme Court. In the case of Granholm vs. Heald 544 U.S. 460 (2005), the Court found the rules unconstitutional, with particular attention drawn to the Commerce Clause, and wiped away the restrictive shipping and other business regulations. On June 23, 2006, Governor Napolitano signed SB1276, finally making it legal for the wine industry in Arizona to operate as it does today. The laws tend to be fine-tuned every year, but the new legal operating structure has allowed the wine industry in Arizona to experience dynamic growth, thus making it one of the last states, if not the last state to become a major player on the U.S. wine stage. Arizona is taking advantage of the opportunity in a big way.
As this is being written, the number of licensed and bonded wineries in Arizona is approaching 100, reflecting a large investment in Arizona’s future. Planting a vineyard typically costs between $25,000 to $35,000 per acre, not counting land acquisition and land preparation cost. New vineyards are now being planted constantly in Arizona, while many older holdings are being honed and expanded. It takes three to five years for new grapevines to generate the first usable crop and five to seven years to reach full production. The good news is that these vineyards then stay in production for 45 years or more. In addition to the vineyards, a full scale winery can easily cost over $1 million to build and equip. With aging of wine before release, it is not unusual for a new winery to take seven years or more to generate its first dollar of income. A huge plus is that people like to see where the grapes are grown and where their wine is made and this longevity of production in a proven location helps to explain the development of long-term interest and loyalty on the part of consumers to visit and continually return to their favorite wineries. Most of the wineries now have membership clubs to encourage commitment and reward their customers’ loyalty. The wine industry in Arizona has had an enormous advantage in establishing their on-site customer base in that the state has been long established as a major tourist destination. Adding the attraction of the wineries has provided another good reason to visit. Hospitality and culinary opportunities quickly follow.
Winemaking – Celebrated
National recognition has followed, as well. A steady array of Gold Medals and other awards continues to bring attention to Arizona wine. With regard to our three established principle growing regions, the Federal Government has awarded American Viticultural Area (AVA) status as distinguished wine grape growing regions to Sonoita and Willcox, with the Verde Valley approval expected shortly.