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. Innovation: inputs PrestigeConnectedness Correlation of innovation with...- 0.1310.585 R-squared of the relationship...0.0170.342

7. PrincetonPenticton Kelowna 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. Infrastructure “Big wineries were not interested in VQA until the VQA proved itself. Now they are very interested.” PA RC BC WI Wine Fest OUCOUC AB CW UBC Wine Wine Info MA FF Reports of fruitful innovation linkages 1411645310 Importance of links 1512755310

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. PrincetonPenticton Kelowna 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.”

14. 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.”

15. Future challenges Absorbing increased production Re-branding International competitiveness

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