With the wine industry growing in Nebraska, it only makes sense someone would start making vinegar.

"I was kind of surprised that nobody thought about that earlier," said Ed Swanson, owner of Cuthills Vineyards near Pierce in northeast Nebraska.

On Saturday, what is believed to be the state's first commercial vinegar maker -- a "vinegary," as it's known -- had an open house in the Sandhills. George and Karen Johnson started George Paul Vinegar with their three children near Cody.

George Johnson, 57, is a retired rancher who started growing grapes on his ranch in 1999 to use in making wine. About four years ago, the Johnsons decided to try to start making vinegar.

They applied for and won an $18,500 matching grant from the U.S. Department of Agriculture to pay for a feasibility study.

With the help of Kimmel Orchard & Vineyard in Nebraska City and the University of Nebraska-Lincoln Food Processing Center, the Johnsons learned about making vinegar and the demand for vinegar.

With many specialty and local-products-only shops in Nebraska, the Johnsons learned there was a high demand for locally produced vinegar.

The Johnsons then applied for and won a $75,000 matching grant from the USDA, as well as $70,000 and $47,500 matching grants from the Nebraska Department of Economic Development, to get the business up and running.

The Johnsons invested much of their life savings into matching the federal and state grants they received.

"The business wouldn't have gotten off the ground without those programs," George Johnson said. "We're essentially starting a new industry."

The money also helped the Johnsons build a place for the business. The family broke ground on the straw bale building in May 2007 and finished work on it largely using their own labor later that winter.

The building's passive solar design and thick bale walls keep it cool in the summer and warm in the winter, George Johnson said.

He said it took more than a year to be able to process in large quantities the variety of fruits the family uses to make its vinegar.

"The vinegar making itself took longer than we anticipated," he said. "It is gratifying to finally have some product to release."

All of the family's vinegars are made from Nebraska-grown fruits, including grapes, wild plums, chokecherries, sandcherries and raspberries.

What fruits they don't grow they buy from local growers. Their apple cider vinegar is made from apples grown at Kimmel Orchards. Their classic red and white wine vinegars are made from cold-hardy varieties of grapes grown in the Sandhills.

The Johnsons describe their process of making vinegar as "Old World." The process works like this:
• The fruits are harvested, crushed and pressed.
• The juice is then fermented to produce wine.
• Finally, acetobacter cultures are introduced, which gradually convert the wine into vinegar.

"There are only a handful of other companies in the United States making vinegar in this Old World style," George Johnson said.

He said the business really is a family-operated affair, with his children helping out daily.

His 28-year-old daughter, Emily Johnson - a printer and graphic designer who lives with her parents - helps process the vinegar and also designs their product labels and Web site.

She said she hopes the business will help sustain their community and add jobs.

"It's nice to have a family business and work with my parents and my brothers," she said.

Ed Swanson of Cuthills Vineyards has helped the Johnsons learn how to grow grapes that can survive Nebraska's harsh winters. He said he knew right away George Johnson had the passion necessary to produce quality wine and vinegar.

"George has that zeal and you can kind of tell that from the word go," he said. "I think it will be a great success for him and we're happy for him."