Small Oregon wine producers have been leery of huge corporate investment in the Willamette Valley. But they also see a benefit for their strongest sales outlet.
The investments from big producers like Kendall- Jackson and Louis Jadot makes competing for shelf space, distribution, and marketing opportunities difficult. But the big budgets also help bring more visitors to Oregon wineries. Real oenophiles love finding small, boutique producers when visiting any wine region.
“Being small and getting our wines out there in the market is our biggest hurdle,” said Mike Bayliss owner of Ghost Hill Cellars. “We’re seeing more competition from the bigger well-funded wineries, who make wine with volume and less expense and have more market dollars.”
Steve Lutz, owner at Lenne Estate, watched as Kendall-Jackson purchased Willikenzie Estate which is across the road from his small production winery. “I think that will bring more people to our location so I can’t complain,” Lutz said.
Wayne Bailey, who owns a beautiful inn and winery near McMinnville, Youngberg Hill, echoes the concept that big dollars bring more visitors. “It’s very exciting to have the big boys spending big marketing dollars on our region,” he said. “That awareness can only help all of us. Most wine tourists will tell you they prefer to discover small wineries that they are not familiar with (when visiting).”
Tom Fitzpatrick, winemaker and general manager at Alloro Vineyards, says the big producers have pushed Oregon Pinot Noir to the world stage. “This is tremendously beneficial for all of us,” he said. “This has created more crowding of Oregon wine in the sales pipeline. The hope is that the attention and the spotlight is widening the pipeline. In general, I look at it this way, the attention and dollars are coming because we have something truly great here. It was just a matter of time before this was discovered. Things that are truly great can’t remain a secret forever.”
Vidon Vineyards owner Don Hagge has struggled with distributors and selling all of his annual production. “I hope to get there in about a year or two,” Hagge said. “I have about two years of inventory counting unbottled wine.
“But I’m not concerned about big money much. There’s a market for wines from boutique operations that aren’t ‘factory wines.’ We have to exploit that big time, particularly with direct-to-consumer sales.”
Wineries realize the biggest margin, therefore profit, when distribution and retail sales are eliminated. A bottle of wine sold in the tasting room is all profit.
The burgeoning success of all Oregon Pinot producers can lead to some of the smaller winery owners reconsidering their business model.
“Our production used to be much higher, around 1,500 cases,” Bayliss said. “Willamette Valley Pinot Noir fruit has become quite valuable so for the recent vintages we decided to sell the majority of our fruit.”
In 2017, Ghost Hill was down from 1,500 cases to 360 cases.
But there remains a strong market to explore the smaller wineries. Readers can google the wineries in this column and order directly from these small Oregon wine producers. There will be one more column focusing on the challenges and a bit about the wines.