June 1, 2017
Local LLC Inks Loan Agreement with SEDC
Compared to the ancient winemaking traditions of Western Europe, or even those more contemporary and well established wineries of California’s Central Valley, Texas’ wine industry might be thought to be in its relative infancy. The fact is, Texas winemaking dates back to the 1650’s, to Franciscan priests who planted vineyards around what is now El Paso, more than 100 years before the first vines were planted on the West Coast.
While the actual acreage devoted to planted vineyards for the production of wine grapes in the Lone Star State, 3,500, is dwarfed by California’s 427,000 acres, the Texas High Plains includes an 8 million-acre stretch of sun-drenched land that makes up the second largest viticultural (grape-friendly) region of the world. Texas is home to over 36 members of the Vitis grape vine family, with 15 of those native to the state, more than any other region on earth. The soil and the sunny and semi-arid climate of the wine making regions in the state have drawn comparisons to those produced in Portugal.
With the initiatives of, and a sizable investment by, local businessman Henry Neufeld, along with an incentive package provided by the Seminole Economic Development Corporation, Texas newest boutique winery, Blossom Estate Vineyard, will have a home in Gaines County, with a nearly 37-acre plot of land ultimately dedicated to the production of grapes. 12 of those will yield this year’s crop of Sangiovese and Pinot Noir grapes, due to be harvested by hand later this month.
Later, Neufeld will offer a Sauvignon Blanc, produced from 7,500 of the white grape plants that were seeded last winter. By 2019, he plans to produce a Merlot from an additional 1,500 plants that produce the wine’s rich, almost black coloring.
Neufeld is a 22-year resident of Seminole since his immigration from Mexico. A native of Fresno, Calif., his wife Maria came to the area in 1977.
The Neufeld’s had long wanted to begin work on a vineyard, and after a purchase of land in 2014, that dream expanded into a desire to produce wine.
“This is really nothing new to this area. It started way before our time” Neufeld explains. “If you go to Brownfield, you can see some old vineyards. What happened — well I get stories — one of them is that a drought killed them off, and another says that it was pestilence. I was raised in cotton, but when grapes came back, it gave us this opportunity.”
The Neufelds’ goal for the near term is to produce pesticide-free grapes for organic wine, to label it and market it to retail stores, hotels, and restaurants within a small radius of Seminole, then expand from there. Primary regional competition will come from more established vintners at Lubbock’s Llano Estacado, Caprock, and Pheasant Ridge wineries. Because he will not be registered to sell retail, Neufeld eventually hopes to open a wine-tasting facility on property he owns on the Hobbs Highway after the production facility is approved by the state.
Neufeld also hopes to start a trend that will bring other grape producers in, along with jobs via the greater number of man hours per acre that the crop generates, as compared to cotton, peanuts, and other crops. Neufeld will have the capability to bottle wine for other brands as well. Those vineyards would provide the grapes.
According to Neufeld, the West Texas climate is favorable to an organic product because of the abundance of sunshine, and a drier climate helps to prevent certain types of fungi which can form inside of grape clusters, common in more humid environments. Grapes require considerably less irrigation than other crops common to the area, such as peanuts, and far less acreage to become profitable.
While SEDC Executive Director Chris Jones wears a number of hats in his position, and other efforts are in the works, the Blossom Estate agreement represents his first completed contract with a new business since taking the position.
“One reason I think this type of business has promise, is the state has put out a list of needed crops for the state, and on that list were the specific grapes that they grow,” Jones explained. “With a Young Farmer Grant, the Texas Department of Agriculture will partner with anyone growing a crop on that list.”
The Young Farmer program also assists members in the marketing of their products.
“And if you look at my Strategic Plan, we need to settle on a strong third crop rotation,” Jones added. “More importantly, we need to bring the markets here, instead of just shipping most of our stuff to larger markets.”
“And from a fiduciary perspective, I think the SEDC is being very responsible with the taxpayer’s money.”
With Neufeld’s initial capital investment of well over a half-million dollars and a commitment to hire from the local labor force whenever possible, his obligations to the SEDC include a commitment for at least five seasonal jobs, paying $9.00-$13.00 per hour. Jones expects the actual number of employees to exceed that minimum requirement, based on examples of similar operations in Brownfield. Currently, the Brownfield area accounts for up to 80-percent of the wine bottled in the state.
While it represents a small portion of Neufeld’s overall investment in company infrastructure and equipment, the SEDC will provide to Blossom Estate Vineyard, LLC, a three percent (3%) per annum loan in the amount of $30,000.00, covering a considerable portion of the company’s first-year operating costs. The loan is to be paid backwithin three years. The company will report the number of employees required by the agreement at the end of every quarter and agrees to provide adequate collateral and keep all locally imposed taxes up-to-date.
While California accounts for 90-percent of the wine consumed in the U.S., produced from more than 1,200 wineries, the number of small boutique wineries throughout the country continues to grow as demand increases. According to documentation provided by Neufeld, consumption of wine has increased from 2.01 gallons per person, per annum, in 2000, to 3.14 gallons per person in 2014. By 2016, U.S. wine sales were a $60 billion dollar industry.