Exploring the Diversity of Northwest Wine

As consumers continue to increase their per-bottle spend, California’s fine wine rivals to the north are nibbling away at the leader’s market share. The Golden State’s dominance of U.S. production slipped to a new low in 2014, according to the Wine Institute, punctuating a decade-long decline from 90% to 85%. California’s wine business is healthy and growing steadily, of course. Other states are simply growing faster, particularly in the quality-focused Pacific Northwest.

Washington and Oregon couldn’t be more different from a winemaking perspective. Eastern Washington’s high desert vineyards enjoy a warm, dry climate not unlike that found in Spain or Argentina. Western Oregon’s vineyards are clustered in cooler coastal valleys kissed by fog and ocean breezes, in conditions more akin to those of northern France or New Zealand. In early days, Washington earned its wine stripes by delivering delicious entry-level Merlot and Riesling, while Oregon proved its mettle on the fine-dining circuit with luxury-priced Pinot Noir. But what these northwest wine regions share, along with up and coming neighbors in Idaho and British Columbia, is a combination of stylistic diversity, quality potential and progressive value that is resonating with consumers.


Despite considerably smaller volume compared with Washington State, Oregon is also smoking the fine wine competition. According to Oregon Wine Board communications manager Michelle Kaufmann, “New data from Nielsen shows that in 2015 Oregon wine sales were up just over 13% in national dollar volume, as compared to 5% in total table wine category growth.” The driving forces are different here, though: a growing reputation for excellence in luxe Pinot Noir and a growing supply of affordable versions for the masses.

Oregon has 45% less vineyard acreage than Washington, but the yields per vine are so much lower that it produces 63% less wine. “Oregon hangs its hat on Pinot Noir of greatness,” says David Adelshieim, co-founder and president of Adelsheim Vineyard, “but in climates like ours, there is a direct relationship between crop yields and wine’s concentration. If you need to get below 2 tons per acre to make a serious wine of complexity, your main selling point can’t be low cost. Prices need to be north of $25 or $30 per bottle to make this kind of farming economically viable.”

Abacela's estate vineyard planted to Tempranillo copy
Abacela’s estate vineyard planted to Tempranillo

But insatiable thirst for economical Oregon Pinot has led to significant expansion in entry-level offerings, many sourcing from outside established AVAs. Launched in 2002, A to Z Wineworks was an early success story in that quest, channeling wine geeks everywhere with their slogan, “aristocratic wines for democratic prices.” But today the company is not simply on fire on the sales front (as Oregon’s leader in Nielsen’s national scan data), but blazing an uncommon trail when it became the world’s only ‘B Corp’ winery in 2014.

Certification as a B Corporation provides a formal framework ,allowing for-profit companies wishing to benefit society as well as their shareholders to meet rigorous standards of social and environmental performance, accountability and transparency. “Our goal is simply to offer quality wines at value prices,” says Deb Hatcher, a founding partner who serves a chief marketing and sales officer for A to Z, “while building a company that is a force for good.”

This type of inspirational thought-leadership has been baked into Oregon’s wine culture from day one, and boosts Oregon’s consumer appeal. “Oregon leads in certified sustainable vineyards as a state with 48% of our vineyards certified,” says Christine Collier, winery director for Willamette Valley Vineyards. “We hold ourselves to a higher standard of truth-in-labeling by only allowing 10% off-varietal blending, compared to 25% in other states. We find consumers are willing to pay for a product they believe has value, an authentic story, a sustainability-focus and an emotional connection with the way they choose to live their lives.”


Oregon Grapes to Watch

Chardonnay – As a specialist in Burgundian grapes, it should come as no surprise that this region can produce stellar Chardonnay and sparkling wines. “Our top Chardonnays are truly special,” says Adelsheim, “and as we develop more infrastructure and experience with the Champagne method, you’ll see some spectacular sparklers from high-elevation sites.”

Tempranillo – “Tempranillo is easy to grow and vinify in Oregon, particularly Southern Oregon. It just a natural here,” says Earl Jones, founder of Abacela Vineyards and dedicated Tempranillo evangelist. Since his initial 1995 plantings, Jones has inspired 56 more growers in the state to try their hand at Rioja’s famous native grape. The variety has proven popular with tasting room visitors and the commercial value of Oregon’s Tempranillo harvest has more than tripled since 2010.

Washington State

Washington, the country’s second-largest wine producer, has seen its wine harvest double in size in the last decade, and all indicators point to growth. Brett Scallan, who serves as vice president of marketing for the state’s largest wine company Ste. Michelle Wine Estates, sums up the hopeful outlook: “Washington has outperformed the total wine category the past 10 years running, and grew at three times that rate in 2015,” he says. “Washington appeals to an affluent, well-educated consumer demographic, while consistently surpassing other production areas in terms of acclaim and value.”

One obvious reason for Washington’s wine boom is its low land and labor costs. Dollars simply go further in the high desert of Washington’s interior than in coastal California, whether you’re a vintner or a consumer.

“Economically-speaking, Washington is accessible,” says Chris Sparkman, who currently serves as chairman of the Washington State Wine Commission. “Bay area real estate prices and cost of living are sky high, but a young family like mine can still afford to enter the Washington wine game.” Sparkman was a former sommelier when he and his wife founded Sparkman Cellars to focus on hand-crafted artisan wines in 2004, only to be named among Wine & Spirits’ Top 100 Wineries in the World in 2011.

Keeping production costs low keeps prices low whether you’re aiming for quantity or quality, and Washington excels on both fronts. The House Wine brand founded by Charles Smith in 2004 was already successful when it was acquired by Precept Wine in 2010. But the label’s growth since launching a $19.99 3L box format in 2013 has been explosive. The new package increased the brand’s total sales by 123% in its first full year, and represented 59% of total case depletions.

Building on the 3L’s popularity, the brand has cleverly leveraged the brand’s iconic label style. “Our CEO Andrew Browne retooled the House Box package in a variety of color sets,” says Precept communications director Heidi Witherspoon, “with seasonality and hyper-locality in mind.” These boxes have proven popular for holiday-themed end caps at Halloween and Christmas. And although all color schemes are available to any market for any occasion, with no athletic affiliations whatsoever, sports fans love them for tailgating.

Wine shoppers have long known Washington over-delivers in value tiers, but they’re quickly realizing the same math benefits them in upper echelons as well. Many of Napa Valley’s power players, like Cakebread, Duckhorn and Pine Ridge, have launched Washington ventures in recent years, undoubtedly noticing the one-two punch of top scores at fair prices to be had from the region. But there’s more to Washington’s steep trend line than number-crunching alone.

“Washington is famously progressive,” says John Sportelli, general manager at Columbia Winery. “Around the country, people associate Washington with creativity and innovation. Just look at what this state has done with coffee and craft beer! A key segment of wine consumers is always looking for something new, something different. Washington, with its diversity and its own unique style, has something very valuable for wine lovers to explore.”

Acquired by E&J Gallo in 2012, Columbia’s wines were relaunched in a higher tier more in keeping with Washington’s quality-focused growth, with frontline prices in the $15 to $18 range. “What we love about our new wines is that this is exactly where the market is going with all the right varietals,” Sportelli says. “With Cabernet, Chardonnay, Merlot and a red blend in the lineup – we can offer what something like 78% of wine drinkers are shopping for.”

MtAdams-from-Pacific Rim's Selenium-Vineyard copy
Mt. Adams from Pacific Rim’s Selenium Vineyard.

Washington Grapes to Watch

Malbec – It’s increasingly apparent that Washington Malbec is a rising star. “Malbec is in many ways what Merlot was before the great Merlot crash – it has an ability to satisfy the consumer but also makes good business sense,” says Chris Sparkman. “Malbec fermentations are like nothing I’ve seen. It’s dark on day two.” Initial plantings in the aughts have proven so successful that more vintners are making a serious commitment to Malbec, from single-vineyard specialists like Sparkman to larger brands like Waterbrook.

Riesling – What’s old is new again with a resurgence of Riesling in Washington. Popular with entry-level consumers and high-falutin’ somms alike, Riesling’s comeback dovetails with growing consumer enthusiasm for lighter, more refreshing wines. The Washington State Wine Commission reports a steep increase in plantings and production over the last five years. The growing number of ambitious cuvées from larger specialists like Pacific Rim and Chateau Ste. Michelle, as well as little independents like Dunham and Januik, are well worth exploring.



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