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Many but not all of the United States’ major wine regions could be considered ‘mature’ regions. There certainly is not much room for growth in Napa Valley. California produces more than 60 percent of this nation’s wine.

Certainly, there are areas in California still maturing – Santa Barbara and Paso Robles come to mind – but big change isn’t happening.

grape-sense-logoEstablished areas still seeing change include Virginia and to a much lesser extent Leelanau Peninsula in upper state Michigan. The scale is different but the impact is real when new players move into town. No where is this scenario more evident than in Oregon’s Willamette Valley – a personal favorite wine region.

Oregon’s wine industry grew organically from a handful of pioneers in the 1970s who had a vision. Those leaders were people like David Adelsheim, David Lett, and Dick Erath. The boom, arguably, started in the late 80s when French icon Joseph Drouhin bought property and opened its Dundee Hills winery. About that time Don Lange started his family operation along with many others.

 

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Vidon’s Don Hagge

Most of Oregon’s wineries are small operations producing less than 5,000 cases annually – or smaller. But in the past few years the really big guys have bought up wineries, vineyards, and cast an eye on the reputation and thirst for Oregon Pinot Noir. Names like St. Michelle, Kendall-Jackson, Joe Wagner of Caymus, Foley Family Wines, Constellation Brands, Burgundy’s Jadot, and many more have moved into Oregon in a big way.

 

The companies coming into the picturesque valley have big bucks, big marketing power, and they own shelf space earned over decades in supermarkets and wine shops nationwide.

“It’s good for us; the fact that these people are coming puts a stamp of approval on what we’re doing,” said owner and winemaker Donald Hagge of Vidon Vineyards. “It makes us an even more valuable property. Does it hurt the small guy? I don’t think so. Jackson Family is now 10th largest in the world. They own 1,500 acres here and three wineries but they pretty much claim to leave (previous ownership) alone, let them operate on their own.”

Indeed, many of the big ownership groups have been rather stealthy in their purchase – at least to date. Few even realize St. Michelle owns Dick Erath’s winery – one of the valley’s real founders. Domaine Drouhin helped that second wave of the 80s establish the valley’s credibility but they are a big player. Drouhin proved that recently when it purchased a 200-acre vineyard south and west of its current property.

“I have no fears,” Hagge said. “They’re not interested in a place like this. Most of the wineries in Oregon are small and they’re going to stay small. Small wineries have difficulty; there is a lot of consolidation and many of them aren’t making any money. This is difficult but I don’t think that hurts us at all, it helps.”

Hagge makes a strong point that he can produce 1,000 cases of wine and sell it rather easily out of his tasting room. But his current production is slightly more than 2,000 so he struggles to sell his annual production. He has sold a good number of cases, discounted significantly by the nature of the business, to online flash wine sales sites.

The other major changes in the Willamette Valley through recent years has been the associated retail boom of lodging, restaurants and specialty shops. The natives are concerned about community but see the big investors as a welcome development.

“I think it affects us and our business here,” said Lynnette Shaw, owner of Republic of Jam in Carlton. “Those big companies have a lot more reach than this area has ever experienced before so with that reach we’ll have more visitors. The more people we can get in here and expose to this the better off we are so that part is very, very good.”

Shaw’s jam business first appeared as a unique and quirky operation during a 2011 visit. The long-term viability was certainly a fair question. The business is thriving today with its very unique twists and variations on jam.

The lesson is even economic investment causes businesses of all size to consider their futures carefully.

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