So, Who Will Survive?

With over 600 wineries in the state and very limited shelf space, who will survive the cutthroat cost cutting now going on at the retail level? I have already heard rumors of several wineries closing their doors. In fact, in my 25 years as a commercial winery a lot of wineries have come and gone. Remember DeHavilland or Stewart or French Creek Cellars? I heard that even Joan Wolverton of Salishan is calling it quits.

A lot of people entered the winery business via spreadsheet. Yes, you read that correctly. They did not have a passion for winemaking, but saw a way to a quick buck with little investment. Steve Burns, when head of the Washington Wine Commission, said there is no end to the high end market and no price that is too much to charge. (I think he meant if you were located in Walla or Woodunville.) A lot of people bought this. There are now over 100 wineries in Walla a long way from Seattle. I just read that two are opening tasting rooms in Woodunville.

Back to the spreadsheets. Okay in cell A1 I put the price per bottle. In cell B1 I put my case production. In C1 I put in the formula =A1*B1*12. Okay $50 sounds reasonable considering I might have to wholesale some of it, and 1000 cases should fit in my garage. Voila, I can make a cool $600,000 per year. If Parker gives me a 95, I can raise my price to $100 per bottle (Remember, Steve said there was no upper limit to what you could charge) I can make a cool $1.2 million and not even quit my day job.

So, the big meltdown happens. Not even wine shops want your $50 French oaked monster because they already have the shelves filled with unsalable $50 wines. You paid $1200 for those French oak barrels, $3500 a ton for grapes (about $5.00 of juice per bottle) you read about in an article by Paul Gregutt, and you paid $21 a case for those three-pound bottles, and $.60 for each of those two-inch #1 extra-premium corks. I hope you like your wine, because you have a lot of it to drink.

I hope you didn't borrow money to start you garage winery, because that is the next group of wineries going down. Highly leveraged wineries have to add debt service to the above expenses. How about that new $11 million tasting room? How do you get that money back.

Ste Michelle Estates will survive. They make good wine on a scale that gets good deals on all packaging materials. They have a quality image and an established distribution network. But what about those midlevel brands that come and go. You know who I mean, the 300,000 case wineries. Just big enough to not get the small producer tax credit, but not big enough to compete with Ste. Michelle. Good luck.

Let's look at the wineries in the Rattlesnake Hills. Many are estate wineries like Portteus and Bonair. They can grow grapes that are equal to the finest in the state for about $500 per ton (about 67 cents of juice in every bottle). Both Bonair and Portteus sell wines for under $10 in the Seattle market and make money because production costs are kept low. We do not work for the bank.

The Rattlesnake Hills AVA is only two hours and fifteen minutes from Issaquah via freeway. It can take that long to get to Woodunville at certain times. Because the wineries are in a rural setting, people like coming here. They have seen enough strip mall and industrial park wineries. Those wineries around Zillah should have no trouble surviving because most the sales are at retail through the tasting room. We had the best September and October in the history of the winery. As Paul Portteus said, "We have become successful in spite of the Washington Wine Commission."

There is a very famous Red Mountain winery opening a tasting room in Zillah. I wonder why? More to come.

The Oak Joke on Parker

Yesterday I opened up a 1991 Bonair BFD Riesling. After 18 years the wine was a deep golden color, but still retained bright fruit with a nice bottle bouquet. The wine was amazing with a simple halibut entrée pan-fried in olive oil and butter. You snobs who think only red wines age are just plain ignorant. Riesling is the longest lived wine in the world. (It all boils down to pH and TA for those who know anything about making wine.)

There is an interesting story behind this wine. This is the only Bonair wine to be rated by the "Wine Advocate." Bobby Parker himself, of course, didn't rate the wine. He doesn't stoop to rate northwest wines. (Gag me with a spoon.) It was someone else, maybe Cesar Rovanni. I can't remember and really don't give a shift. It was a typical Washington Wine Commission event where the important people do cellar tastings and ply these leeches with food and wine and afterwards the also-rans meet at a restaurant and present their wines.

This occasion took place at Birchfield Manor, a local chef-owned gourmet restaurant and B&B. We wineries queued up and presented our wines one at a time - from dry whites, to dry reds, and on the late harvest wines. Then the next winery would present in the same order, so the dumb bastard was always going from sweet dessert wines to dry table wines.

When the article came out, our BFD (anyone who has attended Washington State University knows what BFD stands for) or Barrel Fermented Dry Riesling got an 86 or something non-committal like that. In the review, the Wine Advocate stated that "the oak overpowered the fruit." Here lies the joke and maybe the reason I am now a grumpy winemaker. The barrels that the wine was fermented in came from Pittsburgh, PA and were made by United States Steel. This wine never saw so much as an oak chip let alone an oak barrel. So, does the label influence Parker. You bet it does! Well, that and the weight of the bottle and maybe some nice perks.

How to Sell Wine in Seattle

 

I've been in the wine industry in Washington for almost 25 years and I have finally figured out the secret to selling wine in Seattle. I get a kick out of new wineries that are only going to sell to "upper end restaurants and wine shops." Well, there go two cases. I've sold my friends one hundred cases, so what do I do with the other 398 cases of my 500 case special grand reserve Parkerized lot?

 

First, we tried knocking on doors. "Hey, we are a new boutique winery and have a limited amount of product to sell. I'll bet you would love to get your allocation." Response, "Come back when you are famous." My wife even asked a particularly snooty wine buyer at the University Village Safeway, "When are we going to get an end display?" Answer, "Lady, you ain't never going to get an end display." (Wrong, I now get them regularly because I learned the secret!)

 

Second, we entered contests and sent free wine to wine writers. (There's a racket if I have ever seen one. I think I will get into it when I retire and don't have access to copious amounts of free wine.) I have drawers full of medals. I don't even know what to do with them. My wife suggested we mount them on a board (actually lots of boards) and display them in the tasting room. Well, there is not enough wall space. And, all those awards don't sell wine. Nobody gives a rip if you won a gold medal at the LA County Fair (Yes, we have on our Morrison Vineyard Cabernet Sauvignon.)

 

Third, we tried advertising. Yeah, get the word out. Advertise in wine magazines and newspapers. Get a website. People will read about you and knock down your door. Sure! I've come to the conclusion that print and air advertising are really good for newspapers, magazines, and TV and radio stations. They do nothing for the advertiser. So, what is the secret?

 

Under $20 is supposed to be a magical price point according to the Wine Expectorator. Most of our wines have been under $20 since the beginning of the winery and that didn't work. In fact, all those fancy Walla and Woodunville wineries now have second labels. The $50 brands are now $25, the $40 are now $20, and everyone is trying to do the $15 wine. It doesn't work.

 

How do you sell wine in Seattle? First it has to be good wine - and Bonair has always produced good wine. Second, you have to sell it cheap - under $10 is cheap. I am shipping out four pallets to my distributor today. Look for it in Seattle for $9.99.

 

The only problem is, I just received Esquin's newsletter in the mail. As Esquin Wine Merchants say, "This wine is so good at the price, it seems like a scam. Something has to be wrong! What happened? Well... the answer lies in the beauty of declassifying fantastic premium Syrah into a regular bottling." The new $9.99 is now $7.99. It's a great time to be a wine consumer. How many wineries and which ones will survive in this climate? Stay tuned.

Harvest 2009 in the Rattlesnake Hills

Harvest 2009 in the Rattlesnake Hills

Those people who opposed the establishment of the Rattlesnake Hills AVA - including some people with PhDs who should know better - said that the proposed AVA was the same as Prosser Flats -aka the Yakima Valley. As you can see by the chart below, the Rattlesnake Hills AVA was warmer in 2009 than Red Mountain. As usual, it was much warmer than Prosser Flats (Yakima Valley).

Date	Washington AVA	AgWeatherNet Station	Cumulative GDD (°F) since April 1	Cumulative Precipitation (in) since Jan 1
Oct 25	Red Mountain	Benton City	3010	3.29
Oct 25	Wahluke Slope	Mattawa	3091	5.89
Oct 25	Horse Heaven Hills	Paterson	3166	4.31
Oct 25	Rattlesnake Hills	Outlook	3068	4.04
Oct 25	Walla Walla Valley	Walla Walla	2843	13.27
Oct 25	Yakima Valley	WSU-Prosser	2658	3.97
Oct 25	Puget Sound	WSU-Mt Vernon	1633	18.15
Oct 25	Columbia Gorge	Maryhill	3253	8.09
Oct 25	Lake Chelan	Chelan South	3048	1.14
Oct 25	Snipes Mountain	Port of Sunnyside	2882	3.43

Last Updated: October 26, 2009 3:04 PM

We started out the year with a very cool month of May. Because of that, we at the Bonair Winery Estate Vineyards (Château Puryear Vineyard and Morrison Vineyard) dropped a lot of fruit early, thinking that this might be a repeat of 2008, an unusually cool year in Eastern Washington. The resulting light crop matured early with extreme quality. Everything we picked came off at about 26 brix. Flavors were outstanding because berry size was small. Due to the low rainfall this year, <5 inches, bunch rot in susceptible varieties like Riesling was non-existent.

My only complaint about this year with over 3000 degree days is that our fruit was more like Red Mountain than the characteristic Rattlesnake Hills. Usually Red Mountain gets sugar before ripeness, so 26 brix is a normal picking point. In the Rattlesnake Hills, we are usually ripe i.e. beyond vegetative flavors, at 24 brix, resulting in less alcoholic wines. Red Mountain is known for big powerful tannic reds and the Rattlesnake Hills produces more elegant classical, food-friendly reds. The Yakima Valley is known for vegetative reds from Bordeaux varieties. Syrah and Pinot Noir are more suited to this cool climate.

Unfortunately, all this hype about a great vintage will be forgotten, three years from now when the first red wines start to appear for sale.