Fruits of their labor: co-op winegrowing takes root in North Carolina

Rural Cooperatives, Jan-Feb, 2006 by Bruce Pleasant

Key help from USDA, N.C.

The cooperative has benefited from a number of grants. It has used business/cooperative programs of USDA Rural Development and has obtained funding from other state and private foundations as well. To assist with the renovation of the building, the Old North State Winegrowers Foundation received a $200,000 grant from the Appalachian Regional Commission, a federal-state partnership.

In 2002, the town of Mr. Airy received two $99,000 Rural Business Enterprise Grants to purchase bottling equipment and renovate the buildings, that would in turn be leased to the cooperative. In 2003, the Winegrowers Foundation obtained the building with an $829,000 loan guarantee from USDA Rural Development through the North Carolina Agricultural Finance Authority. NCAFA also provided the cooperative a $525,000 loan for working capital, which was also guaranteed by USDA Rural Development.

In 2004, the co-op's application for a zero percent Rural Economic Development Loan of $210,000 was selected for funding. However, because of the liens placed in connection with the Business and Industry Loan Guarantees from USDA, the co-op was unable to use the zero percent interest loan for start-up expenses, but the majority of the co-op's working capital needs had already been met by the NCAFA loan. This past September, the cooperative was awarded a Value-Added Producer Grant of $150,000 for working capital to market its wine. This grant will be used to purchase inventory and supplies as well as to cover marketing expenses associated with sales staff salary.

Member assets

As with most cooperatives, every member brings something to the table. Renovating an old building to make it suitable for a winery and restaurant required many resources. One member who is an iron worker furnished the wrought iron railing and gate for the tasting room. The decorative railing is functional as well since alcohol laws require separation between the tasting room and other parts of the winery.

The sprinkler system for the building was provided by a member who has a fire protection business. Another member who is a restaurant owner helped the cooperative purchase "gently used" restaurant equipment at auction for about 10 percent of the cost of new equipment.

One cooperative member is a musician who has lined up bands for festivals and events for the winery. Other members volunteer time in the bottling room or assist with wine tastings in the tasting room or at festivals.

While the Old North State Winegrowers Cooperative winery got off the ground with help from USDA, it has been the members who have volunteered their time and money that will make this cooperative venture successful. Though the cooperative faces many of the same, and some unique, challenges as most cooperatives, the cooperative members will continue to pool their financial and strategic resources to exploit their strengths in an industry that has been reborn in North Carolina.

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