Huge, tobacco-owned corporate winery buys small-town Oregon gem: what could possibly go wrong?
By now, you've probably read it in local papers, watched it on the news, or heard it at wine bars and tasting rooms: Erath Vineyards has been sold to Ste. Michelle Wine Estates (SMWE), which owns some of the largest wineries in Washington State.
If you read it in your paper, it may have been that short, somewhat lacking article by the AP simply entitled, "Oregon wine pioneers cheer sale of Erath winery".
What we're trying to figure out here is, exactly who is doing the cheering, and why? If you're curious why we have concerns about the potentially negative effects of this sale, let us provide you some background.
Since Oregon's earliest days as a winegrowing state, it became known as an alternative to Napa, that over-commercialized Disneyland strip down south. People found Oregon to be a nice change, with small, "mom and pop" wineries producing some true gems. Oregon attained status early on as a well-kept secret. Though in the 90's, as the number of Oregon wineries grew faster than the state's marketing efforts could handle (remember "Brand Oregon"? -- we don't either), people still flocked from far and wide to indulge in the stellar wines that soon came pouring out of Oregon's many wine cellars. The industry as a whole grew, thanks to grassroots, viral marketing efforts.
True, the primary reason we at OregonWines.com started this Web site was that we felt the state's efforts to promote the industry were terribly lacking, and that as an independently-run organization, we had an opportunity to accomplish that task without the bureaucracy of a state-run operation. Just as with the wineries, we felt the best way to represent this industry was with a "home-grown" effort, if you will.
Thanks in part to its relatively small scale, Oregon's wine industry has long been about quality, not quantity. Unlike Napa or Washington, wineries in Oregon don't compete with one another through number of cases or multi-million dollar marketing campaigns. While every winery would certainly love to produce greater quantities to serve more customers, the truth is that Erath, one of the larger Oregon wineries, still "only" produced 225,000 cases last year, well below the millions of cases produced by some labels in California and Washington.
These are the things that make Oregon's wine industry unique. But all that could now change, with the sale of Erath to a large tobacco corporation. Yes, you read that correctly. SMWE is owned by U.S. Tobacco (URL: http://www.ustinc.com, NYSE ticker: UST). Indeed, those same makers of those "fine" chewing tobaccos, Skoal and Copenhagen, are coming to your neighborhood to start growing Oregon wines. Should we look for Erath wines to start exhibiting more of a "tobacco aroma"?
Who still thinks this is a good idea?
Certainly, we're sure many of Oregon's "wine pioneers" are cheering the sale of Erath, but it's more likely they're cheering the success and graceful departure of Dick Erath -- much like an audience applauding an orchestra's final performance out of respect and admiration for the great things they've accomplished -- than they are of what will happen to Erath Vineyards after ownership has traded hands. And to that end, let us say we have the utmost respect for Dick Erath. He did an amazing job at helping start this industry and build it into one of the most exciting wine industries in the country, and we will miss his presence. We simply feel that the sale of his winery may have negative reverberations in the years to come.
True, in the short run, this burst of press may actually help increase interest in Oregon wineries -- but we're sure we can all agree that the interest we're hoping for should come in the form of wine enthusiasts, not more corporate tobacco companies. Perhaps this is one downside of the industry remaining a relative secret, or homegrown gem, for so many years... dazzled by Disneyland-esque wine regions above and below Oregon, many in our industry no doubt wish they could attain stardom, produce vast quantities, sell millions upon millions of cases, and reach that level of financial success that so many small businesses set out to achieve. And yet, by adopting an "at all costs" mentality to gain exposure, this industry will only continue to lose what made it great: that small-scale appeal, and that down-to-earth approach to the business.
What will happen in the long run? For, while SMWE will likely continue the legacy Erath built up, we doubt this transition will yield much for all of the other privately-owned wineries in the Willamette Valley. Business will certainly be good for Erath, as it will likely be placed in the fast lane to national distribution and such -- but what will that mean for the other 320+ brands trying to make it here?
Is the future and long-term success of this industry pitted on more of our wineries being bought out by out-of-state corporations? If it comes to pass, we should think that, rather than being a sign that Oregon's winegrowing business has matured, it will only serve to show an utter failure on the part of the industry as a whole to promote itself from within, and certainly, underscore what a failure our state has done with its "Brand Tobacco" -- our apologies, "Brand Oregon" -- campaigns and the like.
Cheer this outcome if you will. We, on the other hand, will be mourning the loss of Erath winery as one of Oregon's greatest independently-run wineries.