Organizational Structure and Operation of the Illinois Wine Industry

Jason R. V. Franken and Kevin J. Bacon

Agricultural and Resource Economics Review, 2014, vol. 43, issue 01, 21

Abstract: This study examines vertical coordination in the wine industry emerging in Illinois. We find that quality matters as temporal issues related to grape perishability increase the probability of written contracts being used to procure grapes. Holdup concerns related to sourcing adequate quality grapes and at-risk investments in grape storage and winemaking equipment lead to vertical integration. In general, larger wineries must obtain some grapes from outside vineyards and sell wine predominantly through tasting rooms and distributors. Smaller wineries rely more on direct sales to retailers, festivals, and farmers’ markets. Marketing outlet selection also reflects the types of wine produced.

Keywords: Agribusiness; Community/Rural/Urban Development; Industrial Organization; Institutional and Behavioral Economics; Marketing (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:arerjl:165907

DOI: 10.22004/ag.econ.165907

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