Innovation and market growth in a new ‘New World’ wine region: the case of North Carolina

Abstract

Using a broad theoretical framework of informal network interactions, resource endowments and institutional analysis, this paper examines the cycles of failure and success in the effects to establish a wine industry in a region in the South Eastern USA. Early attempts to grow vinifera grapes persistently failed because until recent decades there was no information available about how to combat diseases. Muscadine-based wines, from a native grape, flourished but then fell foul of institutional pressures (prohibition) that eliminated the industry at the beginning of the twentieth century. The industry's rebirth since the 1970s, initially with muscadines but then in recent decades focused upon vinifera and hybrids, is a product of informal networks where crucial knowledge has been shared, resource-rich leader firms have established professional production methods and provided operational benchmarks, and institutional support that has encouraged new industry entrants.

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