Ste. Michelle Wine Estates’ purchase of 298 acres in Oregon includes the 119-acre Willakia Vineyard (above).
—Ste. Michelle Wine Estates
is the latest buyer to pick up a tranche of vineyards formerly managed by Premier Pacific Vineyards Inc. on behalf of the California Public Employees Retirement System (CalPERS).
CalPERS has steadily divested itself of hundreds of acres in the Northwest over the past year, with purchasers including Jackson Family Wines
of California and Seattle-based Precept Wine Brands
(see “Hot Spring for Northwest Acquisitions
The latest deal gives Ste. Michelle a 298-acre parcel in the Eola-Amity Hills AVA, boosting its overall vineyard holdings in Washington state, Oregon and California to more than 3,800 acres. The parcel includes the 119-acre Willakia Vineyard, which includes 98 acres of Pinot Noir and 21 acres of Chardonnay. Ste. Michelle has designated the vineyard for its Erath Winery
but notes that the property offers room for an additional 30 acres of vines and a winery facility.
Terms of the transaction were not disclosed. Developed vineyards in the Willamette Valley have been known to trade in the range of $100,000 per acre, however, potentially valuing Ste. Michelle’s acquisition north of $12 million.
Ste. Michelle president and CEO Ted Baseler was travelling and unable to speak with Wines & Vines, but in a statement announcing the transaction he described the acquisition as a commitment to maintaining Erath’s standing among Pinot Noir producers in Oregon.
Ste. Michelle acquired Erath, founded by industry pioneer Dick Erath, in 2006. While winemaker Gary Horner has enjoyed significant freedom to develop the brand’s identity through his wines, Chateau Ste. Michelle worked to double distribution of Erath wines between 2008 and 2013. Erath is now one of the largest wine brands in Oregon, with an annual production exceeding 150,000 cases.
“Willakia Vineyard is a dream vineyard for a winemaker,” said Horner, who is in Burgundy this week. “It offers this great combination of small blocks planted with diverse clones and rootstocks at different aspects, slopes and orientations. It will give me a broad array of fruit styles to craft beautiful estate wines.”
The comments echo Baseler’s own statements to the Oregon Wine Symposium a year ago, when he told the industry that Oregon’s strength is its diversity of growing conditions, grape varieties and winemaking styles. These factors contribute to a message of authenticity and purity that resonates with consumers, he added.
“Everybody thinks of Oregon as a wonderful place,” Baseler said. “It conjures up so many positive images.”
The purchase of the former CalPERS property is in turn a positive development for Ste. Michelle and its fast-growing brand, and Oregon as a whole. The advent of larger wineries gives the state’s wines the expanded distribution they’ve long sought. It’s not just putting product in the hands of consumers (and cash in vintners pockets), but getting the state’s name in front of drinkers, too, raising the state’s profile.
Jackson Family Wines will be releasing its 2012 Willamette Valley Pinot Noir this spring, while Veronique Drouhin of Domaine Drouhin Oregon
told the Oregon Chardonnay Symposium this past weekend that her company’s December purchase of the 279-acre Roserock vineyard in the Eola-Amity Hills AVA opens up exciting opportunities for wines from that area.
Precept CEO Andrew Browne told Wines & Vines in 2013 that Precept will use Pinot Noir from its Yamhela vineyard in the Yamhill-Carlton AVA to explore new brand opportunities as well as support existing production.
All told, approximately 3,500 acres of vineyard land are known to have changed hands in Washington state and Oregon during the past year—the most robust spurt of activity since the financial crisis of 2008 put the brakes on financing and real estate transactions.
The next major Northwest vineyard transaction will be Musser Bros.’s auction of 694 acres in the Horse Heaven Hills AVA, which is scheduled for April 4.
On offer are the Alder Creek and Windy Ridge vineyards, previously offered by Alabama-based J.P. King Auction Co. in November 2008 (see “Horse Heaven Vineyard Goes to Gavel
”). Occurring as the financial crisis kicked into gear, transactions didn’t complete and the properties eventually fell into the hands of a receiver.
The return of the properties to the market reflects the strong demand for vineyard land the Northwest has seen during the past year.