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Oregon Wines, Part 1: Premium Image Drives Strong Upward Progress For The Category

February 2, 2015

While Oregon’s wine industry remains significantly smaller than those of both California and Washington, the category is growing quickly. From 2010-2013, the Oregon category’s volume rose 39% to 2.7 million cases, while winery revenues surged nearly 50% to $363 million, according to a study recently released by the Oregon Wine Board.

“We’re definitely seeing consumer enthusiasm continue to build for the Oregon category,” says Bill Foley, whose Foley Family Wines entered Oregon with its acquisition of The Four Graces Winery last year. “Pinot Noirs from the Willamette Valley used to be cult favorites and popular in the Pacific Northwest only. Now they’re in demand everywhere.” The Four Graces sold around 24,000 cases last year, led by its Willamette Valley Pinot Noir and Pinot Gris, and will increase by at least 10% in 2015, Foley projects.

Jackson Family Wines introduced its first La Crema wine from Oregon last year, a Willamette Valley Pinot Noir ($30). “This wine will be an ongoing part of La Crema’s Appellation Series, with vintage 2013 releasing later this spring,” says chief marketing officer Caroline Shaw. “La Crema will also introduce some small bottlings that highlight fruit from five of the area’s sub-AVAs including Chehalem Mountains, Dundee Hills, Eola-Amity Hills, Yamhill-Carlton and Ribbon Ridge.”

Ste. Michelle Wine Estates, renowned for its prowess in Washington, is now also growing in Oregon. Its Erath brand, which sells for around $15 and up, depleted more than 180,000 cases in 2014—nearly double its volume of 95,000 cases in 2009, according to Impact Databank.

A To Z Vineyards, founded by longtime Domaine Drouhin Oregon managing director William Hatcher and his wife Deb in 2002, has seen its business triple over the past three years, and it’s investing $16 million in 2015-16 to raise its capacity to 400,000 cases. Deb Hatcher touts Oregon’s premium positioning, noting that 90% of Oregon wine sells above the $11 price point, compared with only 26% of other domestic wines. But she cautions that distributor and retail consolidation still present challenges to the relatively fragmented Oregon category as it looks to increase its national profile.

King Estate, which produces around 350,000 cases annually, is another Oregon producer making gains. In addition to the King Estate brand itself, the Willamette Valley winery’s Acrobat label has been a growth driver, and now sells more than 100,000 cases.

Dundee Hills-based Sokol Blosser, meanwhile, is expecting to boost production about 12% to 85,000 cases this year, led by its top seller, Evolution White ($15), as well as its flagship Dundee Hills Pinot Noir ($38). Co-president Alison Sokol Blosser says the key for Oregon looking ahead will be “making sure we’re selling our wines in the right places, because we don’t have the economies of scale to be everywhere.”

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