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Keg Wines Cut Costs, Open Markets

Oregon's Wooldridge Creek Winery goes direct to trade with beer-style kegs

by Peter Mitham
Oregon wine restaurant kegs
Kegs are filled Wednesday at Wooldridge Creek Winery in Grant's Pass, Ore. The winery is using kegs to increase restaurant sales.
Grant's Pass, Ore. -- The humble keg is opening doors for upper-end Oregon wines during a down market. Wooldridge Creek Winery in Grant's Pass set aside approximately 20% of its production for distribution in kegs, starting this past June with an order of Chardonnay, Cabernet Sauvignon and Tempranillo wines to Standing Stone Brewing Co. in Ashland, Ore.

A brewpub might seem like an unlikely place for fine wine to make headway, but Wooldridge winemaker and co-owner Greg Paneitz said draft beer was an inspiration of sorts for the initiative.

Wooldridge Creek's wines usually sell for $25-$30 per bottle, he said, which makes them -- and most other Oregon wines -- too expensive for local restaurants to offer by the glass. By-the-glass wines are instead cheaper blends from local producers or large-run wines from California and elsewhere.

Then there's beer. "The reason all those people are drinking it is because it's accessible, inexpensive and widely accepted. But why can't I do that?" Paneitz asked.

That question marked the start of his keg program, which includes Chardonnay, Gewürztraminer, Tempranillo, Zinfandel, Merlot and Cabernet Sauvignon wines. Paneitz expects to move the equivalent of 600 cases of wine in kegs this year -- and up to 1,000 cases next year -- a noteworthy percentage of his annual production of 3,000 to 3,500 cases.

The kegs promise to give high-quality local wines a place on the wine lists of Southern Oregon restaurants in a way that's attractive to the pocketbooks of the area's consumers and tourists.

"What we were looking for was a way to make high-quality local wines accessible to the market," Paneitz told Wines & Vines, saying it's "inappropriate" for Oregon wineries to be placed in a position of selling their cheapest product in local restaurants in order to be competitive with wines from California and elsewhere.

The success of Wooldridge Creek's keg program points to the opportunities open to wineries. "I've sold more than 3,000 glasses of wine in the last 10 weeks at Standing Stone. And it's a brewery!" he says.

Adam Benson, head brewer and restaurant manager at Standing Stone, said Wooldridge Creek's wines allow it to provide a local product at just $6 per glass, a price point California's Beringer Vineyards formerly occupied.

By shifting to Wooldridge from Beringer, Standing Stone also was able to claim the environmental high ground by not purchasing a product that had to be shipped from Napa, Calif., to Portland, Ore., to Medford, Ore. -- a journey of approximately 900 miles.

It was also able to cut down on packaging, spoilage and other inconveniences. "It's not going to be oxidized, there's not going to be any cork taint," Benson said.

The fact the three Wooldridge wines at Standing Stone -- Chardonnay, Tempranillo and Cabernet Sauvignon -- are in kegs was noted on the restaurant's menu through the tagline, "No Bottle: No Cork: No Waste: Straight from the Applegate Valley." Benson said most consumers accepted the packaging, especially upon realizing the quality of the wines was the same.

"Once they realized it's high quality, the same as they were going to get in the bottle, it's gone over really well," he said.

Since the lines used to carry Wooldridge Creek's wines from keg to glass are the same as for Standing Stone's draft beers and sodas, Standing Stone didn't require major adjustments to accommodate Wooldridge's kegs, which come in five-, seven- and 15-gallon formats.

The only difference is that nitrogen is used to push the wine through the lines rather than carbon dioxide, which would carbonate the wine. Nitrogen also helps preserve the quality of wine remaining in the keg.

"From a winemaker's standpoint, this is as good as it gets: Because every glass is perfect, nothing's corked. You don't have bottles sitting open for a week," Paneitz said.

The kegs also reduce his business costs, with less packaging cutting the wholesale price of the wines in half. Heightened demand also means the volumes Wooldridge Creek is delivering direct to its keg buyers make each delivery more valuable.

Kaleidoscope Pizzeria and Pub in Medford, Ore., just finished its first keg from Wooldridge Creek, but co-owner Kristi Haavig expects Wooldridge Creek's wines to do well there, too. The lack of packaging was a selling point, but so was the ability to work with Wooldridge Creek to develop its own Chardonnay and Zinfandel blends. Add in the fact that the wines are local, and Haavig was sold.

Wines from the initial 5-gallon keg are listed at $6.25 a glass, compared to the $8 per glass price if poured from a bottle. "You can still get a really good glass of wine and not add in all those extra costs," Haavig said.

The mere economics make Paneitz wonder why more wineries aren't doing it. He isn't aware of any other wineries in Oregon selling wines by the keg, a phenomenon Wines and Vines previously examined in 2007 (Wines and Vines subscribers can access the article, "Wine by the Keg," May 2007, here).

(Editor's note: If your winery is selling wine by the keg we would like to hear about it. Please use the Post a Comment function below to tell us about it, or e-mail
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