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Oregon Wine’s Growth Continues, As Category Nears 5-Million-Case Mark

September 22, 2020

Amid concerns over how recent wildfires might affect the state’s vineyards going forward, Oregon wine industry growth has continued in 2020, outperforming labels from California, Washington, and even imports, albeit from a smaller base. In the calendar year-to-date ending September 6, table wines from Oregon advanced 17.1% in volume terms in IRI channels, compared to 9.9% for total table wine in the U.S. As with wines from most other origins, Oregon brands have benefited somewhat from the off-premise boom resulting from the pandemic, as the growth rate for all of 2019 was slightly slower, at 14.5% according to IRI.

The steep growth occurring this year continues Oregon’s long-term ascent. Last year, Oregon’s total volume rose 12.5% to 4.7 million 9-liter cases, according to the Oregon Wine Board, and generated sales of $673.9 million, an increase of 11%. That compares to just 0.1% volume growth for the total wine market in 2019, according to The U.S. Wine Market: Shanken’s Impact Databank Review & Forecast, 2020 Edition.

Oregon table wines boast a much higher average retail price per bottle ($15.58 a 750-ml. in IRI channels year-to-date) than other major wine origins in the U.S. market, both domestic and imported ($7.71 a 750-ml. on average). Pinot Noir remains the dominant wine grape variety from Oregon in terms of both production and acreage, with Pinot Gris a distant second.

Union Wine’s Underwood brand leads all Oregon wines in volume terms, spurred primarily by the popularity of canned wines, followed closely by Ste. Michelle’s Erath, according to Impact Databank. Going forward, Oregon’s rapid growth could be challenged by the uncertain economy, as continued declines in consumer spending could lead to a shakeout among the state’s wineries.

The wine market in general is also facing increased pressure from the continued popularity of hard seltzer and cocktails, and as the on-premise sector is still just getting re-started, the full brunt of both the recession and the lingering pandemic have yet to be felt. Still, consumers are clearly gravitating to up and coming regions like Oregon, whose premium positioning and reputation for Pinot Noir are drawing increased interest regardless of the conditions.—Juan Banaag

U.S.Top Five Oregon Wine Brands
(thousands of 9-liter cases depletions)
Rank Brand Company 2018 2019 Percent Change1
1 Underwood Union Wine Co. 299 389 30.1%
2 Erath Ste. Michelle Wine Estates 293 344 17.1%
3 A to Z A to Z Wineworks 292 308 5.5%
4 Willamette Willamette Valley Vineyards 146 157 7.2%
5 Acrobat Foley Family Wines 133 156 17.8%
Total Top Five 1,163 1,354 16.4%
1 based on unrounded data

Source: IMPACT DATABANK © 2020

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