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Wine

Wine. Innovation Systems Research Network Sixth Annual Meeting, May 13-14, 2004 Caroline D Hickton, Simon Fraser University, cdh@sfu.ca Tim Padmore, University of British Columbia, tim.padmore@ubc.ca. BC Industry Profile. Approximate 100 wineries and “wineries in-waiting”

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Wine

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  1. Wine Innovation Systems Research Network Sixth Annual Meeting, May 13-14, 2004 Caroline D Hickton, Simon Fraser University, cdh@sfu.ca Tim Padmore, University of British Columbia, tim.padmore@ubc.ca

  2. BC Industry Profile • Approximate 100 wineries and “wineries in-waiting” • Two thirds are in the Okanagan Valley • Rapid expansion • 1988: about 3000 acres • 2002: about 5000 acres • 2004+: from 7000 to 8000 acres

  3. Okanagan Cluster History • Seed: 1925, first vinyard, foxy grapes • Shoot: 1981, 14 wineries, handful of vinifera wineries, “I have a dream.” • Shock: Free Trade Agreement 1988/89 • Sunshine: Pull-out program (2000 acres) • Sugar: Love, money, imagination

  4. Innovation: performance

  5. Innovation: impacts

  6. Prestige Connectedness Correlation of innovation with . . . - 0.131 0.585 R-squared of the relationship . . . 0.017 0.342 Innovation: inputs

  7. Kelowna Princeton Penticton Osoyoos 3 Resources • Land resources • warmth, aridity, soil, bench-lands, beauty • Human capital • Financial capital • Technology “If we could grow grapes in Alberta, we’d go there,”

  8. Infrastructure • Irrigation system • VQA • Institutions • Association of British Columbia Winegrowers • BC Wine Information Centre • British Columbia Wine Institute • Ministry of Agriculture, Food and Fisheries • Okanagan University College • Okanagan Wine Festivals Society • Pacific Agri-Food Research Centre • UBC Wine Research Centre • Regulation and government programs

  9. PARC BCWI Wine Fest OUC ABCW UBC Wine Wine Info MAFF Reports of fruitful innovation linkages 14 11 6 4 5 3 1 0 Importance of links 15 12 7 5 5 3 1 0 Infrastructure “Big wineries were not interested in VQA until the VQA proved itself. Now they are very interested.”

  10. Related and supplier firms • Farmgate sales half of all VQA sales • “Asymmetrical symbiosis” with tourism • Grape trade routes (next slide) • Collapse of supply management • Consultants as conduits “All this paled compared to the knowledge we got from the consultant.”

  11. Kelowna Princeton Penticton Osoyoos 3

  12. Firm structure and strategy • Size: “very small” to “medium large” • Investment phase in 1990s • Recent consolidation • Benign (?) impact of outside owners • Networks “The Okanagan region has mostly new people in the industry and as a result must learn through experience and rely on other people in the industry as teachers.”

  13. Markets • Domestic (regional) market • Access to external markets • Rest of Canada • Rest of World “It’s been a honeymoon here to not have to look beyond the BC market at the world market.”

  14. Future challenges • Absorbing increased production • Re-branding • International competitiveness

  15. Conclusion Caroline D Hickton, cdh@sfu.ca Tim Padmore, tim.padmore@ubc.ca

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