Legislative Research Commission

FRANKFORT, Ky. (Oct. 5, 2018) — Grapes are used to make Kentucky wine, but not all of those grapes come from Kentucky.

It’s a conundrum that Kentucky grape growers and wineries face as growers struggle to find grape varieties suitable to Kentucky’s soil and climate.

“We can grow grapes – finding the right varieties [is the challenge],” Kentucky Governor’s Office of Agricultural Policy Executive Director Warren Beeler told the Tobacco Settlement Agreement Oversight Committee on Wednesday.

Beeler said Kentucky wineries often find it easier to buy juice from the grapes used in their wine than to grow the grapes themselves. That has caused grape production in the state to level off, he said, but that could change. Researchers at the University of Kentucky are currently trying to identify grape varieties that are best suited for growth here in the Commonwealth.

“The viticulture (grape production) folks at UK have got to find out what we can grow, and then maybe we can get back to expanding,” Beeler told the committee.

To help UK achieve its goal, the Kentucky Agricultural Development Board (KADB) in August approved up to $390,189 in state tobacco settlement funds for the UK Research Foundation to support research into wine grape varieties that can be grown in Kentucky. That research, overseen by the state’s Viticulture and Enology Extension Program, will receive the funds over two years.

Last month, the KADB approved $280,000 in state funds to support the Kentucky Grape & Wine Council (KGWC). Those funds will support marketing and wholesale reimbursement incentives for the wine industry, according to a KADB news release.

The reimbursement incentives – offered as grants through the KGWC in cooperation with the state Department of Agriculture—are designed to help licensed small farm wineries and Kentucky wholesalers distribute wine products. The KGWC also offers a cost-share grant program in cooperation with the department that reimburses 50 percent of the total cost of approved marketing projects.

In the works, said Beeler, is a loan program to assist Kentucky’s wine industry. That program has not yet been finalized.

Speaking in support of Kentucky’s wine industry was Sen. Stephen Meredith, R-Leitchfield. He told the committee that Kentucky wineries shouldn’t get lost amid strong growth and sales in the bourbon industry.
“I would hope that we could continue to grow that segment of agriculture,” Meredith said of the wine industry. “I think there’s more stability in the wine market than in bourbon, and we certainly need to be prepared to take advantage of that.”

Kentucky currently has around 70 wineries in operation, Beeler said.

Kentucky’s tobacco settlement funds come from the state’s share of a multi-billion-dollar master tobacco settlement agreement reached 20 years ago between major tobacco companies and 46 states, including Kentucky. Settlement funds directed toward diversification of Kentucky agriculture have totaled over $580 million in agricultural investments since 2001, according to the KADB.