Last week the Alcohol and Tobacco Tax and Trade Bureau (TTB) recognized America’s newly established viticultural area, the West Sonoma Coast American Viticultural Area (AVA). It will be the 19th AVA in Sonoma County. What are AVAs again? What should the wine industry know about them? The TTB has defined 262 AVAs, with 144 (or 55%) in California, as grape growing regions that are sufficiently distinctive in geography and climate to impact the unique development of wine grapes. These official AVAs vary in size with the largest in the Upper Mississippi Valley at almost 30,000 square miles with boundaries in four states.
Why was the AVA system created?
The AVA structure was introduced in 1982 to educate the consumer on the origin of the grapes in wine and based on the French Appellation d’Origine Contrôlée (AOC) system that assumes a wine’s quality is influenced by where the grapes are grown. The American classification system used the French’s division of geography but left out any indicators of quality. The AVA designation also differs from European systems in that it does not dictate the grape varietal grown, crop yields or winemaking method. Prior to the AVA system, the designated place of origin for American wines was the county and state appellations, which remain valid today.
How do AVAs benefit consumers?
The identification or association with a specific wine region often provides a sense of pride for grape growers and winemakers. This pride carries over to wine consumers, especially local consumers. Savvier wine consumers almost always want to know about the grape growing region. Place of origin ranks third behind price and varietal as factors considered by experienced wine consumers. At least 85% of the wine grapes must be sourced from an AVA to have it listed on the label. Since wineries can also use the state or county in addition or in place of AVA designation, the wine label becomes an important source of information for the consumer.
How do AVAs benefit wineries?
There are many examples where place of origin of an agricultural product translates into better quality, and often higher prices. While the TTB officially defines wine regions, it does not claim those areas have any commercial advantage. Consumer endorsement influences the value of an AVA rather than the approval from a governmental agency. That said, research has indicated that an AVA can contribute to higher prices paid to grape growers. Consumers pay more when they become interested in specific wine areas. The U.S. Senate officially recognized the economic and cultural contributions of AVAs in 2018, much of it based on studies of individual AVAs.
Another benefit of AVAs is the creation of regional wine organizations that support grape growers and winemakers. The promotion of the viticultural area by these organizations can greatly benefit growers in getting better prices. These regional wine organizations are often based on a collaborative effort, an important component in building a regional brand. The marketing around a regional brand is very helpful for all wineries, but especially smaller wineries with limited marketing budgets, and newer wineries. The Wine Institute has identified 63 of these regional organizations in California.
What are some limitations of AVAs?
Some in the industry have disputed the benefits, or even the need, for AVAs. The reality is that the commercial advantage that a winery receives through a viticultural area does not come from the AVAs regulatory recognition but through its development of consumer acceptance. This has led to a steady increase in the number of new AVAs over the years. They are different from the Grape Pricing Districts discussed before. Some of these AVAs are located within larger AVAs resulting in overlapping regions, or subregions. Although often legitimate, there is concern about consumer perception and confusion, as well as validity in the ability to identify the uniqueness of each AVA.
What AVA data is available for mapping and analysis?
The Alcohol and Tobacco Tax and Trade Bureau (TTB) developed the American Viticultural Area (AVA) Map Explorer, an informational tool about each AVA, including its state and county, when it was established and where they overlap. It also includes a link to the official boundary description in the Code of Federal Regulations (27 CFR part 9). The federal petition, legal dockets and public comments are also accessible on this mapping tool. The downloadable AVA “shapefiles” can be used to create regional maps for wine associations or tourist organizations.
If you want to take a deep dive into this classification system, check out the AVA Digitizing Project led by and housed at the UC Davis Library. The system uses open-source software and data, including digital boundary data as a geographic overlay with other data. The publicly accessible datasets provide wine researchers with tools to examine the scientific aspects of viticulture, such as changing environmental conditions. The project also has applicability for studying economic, social and historical aspects of regions nationally. It’s important for wineries understand the strength of their regional brands to make more impactful business and marketing decisions.
Selected References:
Johnson, R. and Bruwer, J. (2007) The Balancing Act between Regionality and American Viticultural Areas (AVAs). Journal of Wine Research, 18(3) 163-172.
Johnson, R. and Bruwer, J. (2010) Place-based marketing and regional branding strategy perspectives in the California wine industry. Journal of Consumer Marketing, 27 (1) 5-16.
Lim, H. K. (2021) Sounds Better? Potential Implications of Obscure American Viticultural Areas to Consumer. Journal of Agricultural and Applied Economics, 53, 37–54.
Rendleman, M., et al. (2016) Wine Industry Competitiveness: A survey of the Shawnee Hills American Viticultural Area. Wine Economics and Policy, 3, 4-13.
