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Oregon isn't finished proselytizing Pinot Noir and other state wines

by Peter Mitham
oregon wine industry symposium
The Oregon Wine Industry Symposium has attracted 1,300 registrants to the event in Portland.
Portland, Ore.—Oregon needs an evangelical approach to its wines if it wants to make the most of a rebounding economy and consumers increasingly inclined to try something different.

During the annual state-of-the-industry address that kicked off this year’s Oregon Wine Industry Symposium in Portland on Tuesday, Christian Miller of Full Glass Research in Berkeley, Calif., cited several statistics highlighting the need for Oregon wineries to raise their profile.

A signature variety
“Pinot Noir is still the dominant, by far, Oregon variety,” Miller told the opening session of the symposium, which has garnered more than 1,300 registrants.

Data presented by Southern Oregon University professor Greg Jones as part of a recap of the state’s vineyard acreage indicates that more than 61% of Oregon vineyards are planted to Pinot Noir.

While varieties such as Pinot Gris and Chardonnay are contenders, and the trade is showing keen interest in up-and-coming varieties such as Pinot Blanc and Tempranillo, Miller said consumers have yet to buy in.

“Oregon still equals Pinot Noir, and there is more proselytizing to be done,” he said.

Oregon pride
He pointed out that a quarter of California consumers are ignorant about Oregon wine, while consumers in Washington state are much more likely to have a favorable view of the quality of Oregon wines.

“Washington consumers are much more in tune with Oregon wines than California consumers,” he said, apologizing for his fellow California wine drinkers. “Consumers there are, frankly, benighted and parochial.”

That attitude flies in the face of Oregon wines’ performance at retail, however.

“Oregon is actually doing particularly well,” he said.

Sales of wines in the $20 and up category have shown particular strength, with sales of Oregon wines up 6.4% by value and 5.5% by volume. The average sale price of Oregon wine is now $15.14 per bottle, according to research by The Nielsen Co., with Moscato, red blends and Pinot Gris, respectively, showing the strongest growth.

“We really are seeing a trading back up among the high-value, high-frequency (consumer),” Miller said. On the other hand, he added: “We’re still looking at a long, slow recovery.”

A generational divide
The comments echoed others by Rob McMillan of Silicon Valley Bank, who pointed out that while baby boomers continue to be the strongest consumers for wines valued at more than $50 a bottle, millennials won’t be entering their peak spending years of 35 to 54 until approximately 2020.

Millennials “still don’t have enough wealth to be able to do that,” McMillan said.

In the meantime, cautious consumers will be a drag on the economy.

Economic concerns
While wine pricing is strengthening, the slight shrinkage of the U.S. economy in the fourth quarter of 2012 suggests that consumers will remain frugal at least through the first half of 2013.

“When you look at the economy, it’s not a pretty thing where we are at right at this second,” McMillan said. “The aspiring-affluent, middle-class consumer is just starting to get on board.”

If all goes well, McMillan expects the middle class to start spending more freely by the end of the year.

By that point, SOU’s Greg Jones said, the season should have delivered weather akin to 2012. However, he advised growers against counting on the late summer that delivered stellar harvest conditions.

Jones’ outlook for the year ahead is for a cool, wet spring with weather shifting to dry conditions in May with warmth through the growing season. (See "Slightly Cool Spring Expected in Oregon.")

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