The ever-changing landscape of the Oregon wine industry never ceases to amaze me.
Just a few weeks ago, news broke that one of the original trendsetters of our industry, Erath, was changing ownership to Ste. Michelle Wine Estates of Washington. Then there was the news that David Kahn, a sports executive, wants to build a "Napa Valley" wine hotel on the site of an old quarry in the Dundee Hills. Finally, there was news out of southern Oregon that an excavation company wants to create a new quarry in the middle of wine country. No matter where you turn, it seems business is encroaching on the vineyards, vice versa, and people on all angles are confused as ever insofar as what to think.
Let's begin by first following up on the news about Erath. Since the announcement, we have learned that processing and distribution will be moved off-site, presumably to Washington state, but for now the Erath name will remain on the label, and of course, the vineyards will stay where they are.
Feedback from area wineries has been mixed about the change of hands. While some of the "leaders" in the business have called this something that may set a trend among Oregon wineries, other vineyard owners aren't so sure. Some of the smaller wineries commented (off the record) that while it looked good at first glance, there were negative implications about Oregon wineries being purchased by out-of-state corporations. The single most important comment we heard was this: how can you still call it an Oregon winery if it's not run by Oregonians, in Oregon state?
The Erath sale brings up a delicate issue, one that cannot be discussed without stepping on someone's toes. Nevertheless, it's an important one to discuss. On one hand, there are hundreds of small wineries in Oregon, all of them trying to build a brand for themselves, but also facing the realities of limited marketing power. On the other hand, you have large wineries, who have weathered the seasons and shifting markets, and feel primed for large-scale production - essentially, going corporate and mass-distributing their product. And in the third sense, there is the consumer, the person who without their dollar, none of the wineries would be in business, and who stands to gain -- or lose -- the most from any decision that could affect their ability to get their hands on enough good product.
However, we can't blame Oregon wineries for putting all their cards on the table and examing all of their options. Thanks in part to a failed marketing push by the State, Oregon has rested on the laurels of a grassroots marketing effort to put its wines on the map. In any case, thus far we think the biggest reason for this region's success has been its ability to cultivate so many of the smaller, artisan, "boutique" wineries, if you will. Oregon has worked hard to build itself a brand as being the "un-Napa alternative" in the West Coast wine world, and it is catching a lot of attention as such.
But times change, the industry has matured, and Oregon wineries do need to come to terms with the fact that the rest of the world won't wait forever for our state government to figure out that marketing Oregon wine is not the same as marketing Oregon cheese, pears, or construction companies. Just visit the "Brand Oregon" Web site (Google it) if you need more evidence of this. No, the rest of the world will move on and build on its love affair with other wine growing regions, such as Washington state or Canada's Okanagan Valley, two industries next door to Oregon, simply because they have more marketing oomph driving them to success.
In the midst of the mayhem, Oregon wineries are left struggling to know which way to turn. The danger is falling into the gap of "any press is good press", such as the hoped-for fanfare from the sale of Erath. While industry leaders are touting this as a "new chapter" for the Oregon wine scene, it should not be forgotten that for many smaller wineries, little will result from this sale that will affect them at all. What will happen is that from this sale, the product line of a single winery, out of some 350 Oregon producers, will hit the national spotlight. Whether that will increase demand for additional product lines from other Oregon vintners or not remains to be seen. But what is apparent from this is a direct requirement, that to attain this same kind of result, more wineries will need to turn over ownership to a large, corporate buyer.
To that end, the artisan touch, the simple things that can only be accomplished on the small scale, and which make Oregon wines such a gem in the midst of mass-produced, million-case productions found elsewhere, can only be lost. There is simply no way to preserve the quality of such a volatile product realized at small scale, while increasing its quantity exponentially simply to suite a larger audience.
And therein lies the rub. Because so many Oregon wineries are at their best when small, they cannot grow to grand scale and see the success that some of their industry leaders have seen. And corporate buyers will no doubt overlook these smaller vintners, because they simply cannot produce the quantities that would be of any interest to their investors. The only way to see a benefit would be for the smaller producers to sacrifice quality and double, triple, or quadruple output. But then, their wines would scarcely be any better than those currently coming out of the corporate-sponsored wineries -- so for what reason would the buyers have any interest?
The result is that this sale may in fact set a trend - but only for the larger players - and so the smaller wineries should not, for a single moment, think they will stand to benefit from any type of corporate injection into the market. Nor should they lose sight of the good thing they currently have going. If their main problem rests in finding a means to distribute their wines to an expanded consumer base, then that is simply a marketing problem, and there is no need to consider selling out as the fix, as that can only stand to damage the artisan appeal that winery has, leaving it as nothing more than a corporate owned outfit faced with producing small-run wines for a cost-conscience board of directors.
And, should another of the large wineries consider itself ready to step up to the plate of nationally-distributed wines, then it should be prepared for the flip side of the mass-market coin. Yes, the product will be distributed nationwide, perhaps even globally. And unfortunately, there will be nothing special about this wine in the eyes of the un-targeted consumer reading its label, at least compared to the lower-priced Australian equivalent sitting next to it on the shelf.
This isn't about having our cake and eating it, too. We do want to see the Oregon wine industry continue to grow and mature. We just aren't kidding ourselves about the realities of corporate-sponsored vintners. To be fair to Napa and other California regions, they have done a pretty decent job of retaining personal control over their businesses, more so than Washington at least. But that doesn't mean Oregon need to fall into either side.
You see, mass-distribution isn't always the best way to increase your marketshare. Sometimes, it takes time, finessing, tending -- just like the vines -- to cultivate the right kind and size of audience. Unforunately, that is something we at OregonWines.com have yet to hear from any marketer in the Oregon wine industry, either at the state level, or in any other capacity, but it is something that cannot be emphasized too much. It simply seems that industry leaders care more about distribution of quantity, rather than quality.
Let Oregon be Oregon. In the absence of marketing support from the state, let the industry turn to itself for guidance -- not just any guidance, but solid, educated leadership that understands what marketing is really about -- instead of heralding the quick fix of eager wallets from out-of-state corporations.