T H E M O N T H LY B U S I N E S S S E C T I O N F O R L I N N A N D B E N T O N C O U N T I E S A N D T H E M I D - W I L L A M E T T E VA L L E Y
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January 2012
Jim Bernau, president of Willamette Valley Vineyards, shows environmentally friendly bio-casks for use in restaurants in the production area of the winery. DAVID PATTON | ALBANY DEMOCRAT-HERALD
Oregon wineries blossom Once thought impossible, vineyards thrive in the valley By JENNIFER ROUSE
W
hen Jim Bernau planted his first grapevines on a hillside south of Salem in 1983, he was one of a few dozen dreamers who thought Oregon just might be the perfect place to produce wine. Nearly 30 years later, those early vines have produced Willamette Valley Vineyards, one of the leading wineries in the state, and thousands of bottles of acclaimed pinot noir. The number of dreamers betting on wine as a crop of the future has swelled exponentially as well. State statistics show that the Oregon wine industry has nearly doubled in the past decade, and the growth shows no signs of slowing down. Bernau, who is scheduled to receive a Weatherford Award from Oregon State University’s Austin Entrepreneurship Program in honor of his achievements with Willamette Valley Vineyards, said that despite an economic downturn that led growers to tighten their profit margins, the Oregon wine industry is poised to continue its success. Of course, he’s thought that from the beginning. When Bernau decided to start a vineyard, he was acting on research he’d done in the course of his job as a lobbyist for the Oregon Small Business Association. While working to pass legislation benefiting the fledgling wine industry, he became convinced that Oregon was a “great undiscovered country.” “It lit a fire in me. I didn’t know it couldn’t be done,” he said. “And when people told me it couldn’t be done, that was like fuel.”
INSIDE A6: Oregon State University celebrates entrepreneurship and innovation through the Weatherford Awards
cause everyone thought we were crazy,” he recalls. Since those early days, the Willamette Valley has proven to be excellent for coolclimate grapes, most notably pinot noir. And, as Oregon wineries have attracted accolades, their numbers have grown. More than 20,000 acres of wine grapes were planted in 2010, the most recent year for which statistics are available. That’s nearly double the number from a
decade before. “The growth is going to continue to be linear, if not exponential,” said Neil Shay, director of the Oregon Wine Research Institute, located at Oregon State University. “The number of acres planted all across the state is still increasing, and we know of more and more vineyard acreage being planted and more people buying suitable acreage.” But according to industry leaders, there is still room to grow. “If you go to Burgundy, in France, they are all planted,” Bernau said. “The only way they’re going to get more land to plant is if they take out the houses at the bottom of the hills.” Oregon, by contrast, has many acres suitable for wine grapes that aren’t planted yet.
Room to expand market share
Market share has room to expand as well, growers believe. Oregon is the United States’ third-largest wineproducing state, but currently most of that wine is purchased within the state’s borders. In some ways, that’s a good thing. ‘Everyone thought we were crazy’ David Buchanan of Tyee Wine Cellars outside Corval“We don’t have a lot of great big huge wineries,” said lis knows the feeling. The Buchanan family planted the Buchanan, of Tyee Wine Cellars. “We’ve got a lot of first wine grapes on their farm in 1974, back when you small, local wineries. They’re good for a healthy lifestyle, couldn’t get a loan to start a vineyard because no one be- and they complement the local foods.” lieved it could be successful. That kind of connection with local producers draws in “We had television people coming out to talk to us be- customers, Bernau said. He expects to see more connec-
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tion between wine growers and wine drinkers in the future, as consumers seek out what they view as authentic local brands. To facilitate that connection, he plans to turn what’s currently a special events center at his vineyard into a restaurant, where customers can experience food and wine pairings. However, having a mostly local clientele also means there is room to grow in the export market. “Oregon is the only major wine producing region in the world where we consume a large portion of our own production,” Bernau said. “Others are exporting a lot more.” Across America, wine consumption is up and sales are strong. According to a 2010 study by the Wine Market Council, per capita wine consumption in the United States has increased steadily every year since 1994. Data from Wine Business Monthly show that the two wine varieties seeing the most growth in retail sales are riesling and pinot noir — two cool-climate grapes that grow well in the Willamette Valley. Those types, especially pinot noir, also tend to be more expensive, with average prices per bottle starting at $20 to $30. But that hasn’t driven customers away. To survive during the economic downturn, wineries did some discounting and tightened their profit margins. Now sales are climbing once again. Bernau’s Willamette Valley Vineyards, a publicly traded company, posted a net profit of $373,407 in the third quarter of 2011. The weather and its impact on the harvest is always a big unknown for wine growers. In recent years, the total number of grapes harvested has been down, due to weather-related factors. However, according to early reports, the wine from grapes grown in 2010 is poised to be some of the state’s best ever, and 2011 is similarly reported to be of high quality. “Folks are very enthusiastic,” Shay said. “[The wine from] 2008 was supposed to be one of the vintages of the century, but 2011 might be one of the best vintages ever.”