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To be or not to be? Is the Oregon wine industry

To be or not to be? Is the Oregon wine industry – Opinion Analysis

Lindy Lindquist

That is a good question, and one with many possible answers, few of which are known to consumers and, regrettably, only a few more to vintners themselves. The Oregon wine industry today needs to look at some fundamental changes that must be made in the minds and purse strings of its players if the industry is to “be” and not simply be a temporary blip on the wine horizon.

These are somewhat harsh words and certainly a counterpoint to the general hype and claims of “dynamic growth” being bantered about the past few years. Such claims, alas, are really only the skin of the grape, so to speak, and have little if anything to do with the fruit that lies within. Witness the fact that many wineries, even established ones, are offering discounts of 70% on their wines, which is another way of saying they are not selling very fast. Does this sound like “dynamic growth” to you? To me, it does not.

There is a saying extant that the Oregon wine industry is 20 years behind that of California. This is true. The question is, “Why?” An even bigger question is, “Does it have to stay that way?” It does not, if vintners will heed a wake-up call, open their minds to what happened in California and apply those historical lessons to Oregon.

Certainly Oregon got a late start, but it can leap forward and actually catch up in lust a few years if attitudes and the reluctance to part with a penny are cast aside, and if vintners commit themselves to a spirit of cooperation and a true desire to really get into the wine business.

The latter is a major point, since in spite of the increasing number of wineries reported, the vast majority of those wineries are really only hobbies, making 2,000-3,000 cases annually. These vintners only think they are in the wine business. To be a real winery requires a case production of around 20,000 in Oregon, heavy financing, adequate distribution and a fondness for loads of paperwork.

The vintners to whom this is directed are not the very few successes who have taken the bit in their teeth, but the majority of small vintners that as a group could eventually make history and truly put Oregon on the wine map. However, this group, and the Oregon wine industry, will never “be” until the start-up vintners invoke the spirit of cooperation and dispense with the notion that they are the last of the great American individualists.

Stepping back in history for a moment, in my 35 years of involvement with the wine industry I happened to be on the scene in the early ’70s when wine suddenly was on everyone’s lips. That prompted a host of start-up wineries in the Napa Valley, and they, too, were individualists all. Their plan was to build a winery on the top of the hill, make wine and live the good life. Then, once each year, they would open the gates at the bottom of the hill, and let the pilgrims file in to take away all of the wine.

It didn’t quite work that way. (Does this sound familiar relative to Oregon wineries?) When there were too few pilgrims and the warehouse was full of wine, someone said “Hey, we need to sell this stuff.” Enter the era of distributors.

At that time there were a few distributors handling wine, but most were distributing beer. They quickly realized that wine was a different barrel, so to speak, and set up divisions to handle just wine. The distributors’ efforts gained instant sales for the vintners, and consumers could actually find their wines here and there.

But then many vintners balked at the 40% or so they had to pay the distributors for their hard work, which came out of their healthy profits. They wanted it all, which was short thinking. Nevertheless, the three-tier system became fully established and it was a good thing.

Vintners in Oregon shy away from distributors in general since they do not wish to pay the commission to get their wines out there in the marketplace. Then they wonder why their wines are not selling. They do not seem to realize that if they spent $5 to make $50 they could sell their wine and laugh all the way to the bank. But, alas, most Oregon vintners refuse to do so, particularly the newer entries in the field. Clearly a major change must be made in vintners’ attitudes on this issue if the industry is to succeed. If Oregon wines are not on the shelf, they are not going to sell over the long haul and, after all, there is only so much wine each vintner can drink himself.

This “cheapness” is fully reflected in the fact that many Oregon vintners claim not be able to find a distributor. Why? Because when a distributor asks them if they are willing to support their brand, meaning point-of-sale devices and such other sales aids, the vintners close their wallets. One cannot blame the distributor, since he is not about to establish and promote a brand without at least some support from the winery.

So everything stops there. The distributor, who is a vital link in the chain, moves on to a more sophisticated wine operation, while the vintner who in essence refuses to really get into the wine business, sits with a warehouse full of wine. It’s back to that old thing of not being willing to spend $5 to make $50, and the industry at large suffers.

The few larger wineries which have embraced the truth that distribution is the key to success seem to be doing just fine. Certainly they spend a little money here and there–sometimes quite a lot–but they are the wineries reaping profits from their enterprise. What’s wrong with the rest of the Oregon wine industry? Why doesn’t it wake up to the realities of being truly in the wine business? Does anyone in the Oregon wine industry really believe that what was done very successfully 20 years ago in California cannot be applied here in Oregon? I suggest they think about it.

(Lindy Lindquist, a former editor of Vintage and Wine World magazines, has been writing about wine since 1970. To respond to this opinion, write Wines & Vines, 1800 Lincoln Ave., San Rafael, CA 94901 or e-mail edit@winesandvines.com.)

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