Wines & Vines Home
   
 
Welcome Guest
LOGIN |  CREATE ACCOUNT
 
ADVERTISEMENT
 
 
 
10.14.2009  
 

Value Drives Northwest Wine Sales

A generous harvest will feed lower-priced sales leaders

 
by Peter Mitham
 
 
Frank Roth Tagaris Winery Eliseo Silva
 
Frank Roth, head winemaker for Washington’s
Tagaris Winery and its sister label Eliseo
Silva Wines, says that consumers recognized
the value of Eliseo Silva and have begun
trading up to the higher-priced Tagaris.
Vancouver, B.C. -- Northwest winemakers anticipate the 2009 harvest will buoy the fortunes of a region that already has reaped rewards from a tough economy by offering good-value wines.

Preliminary harvest reports from British Columbia and Oregon highlighted the solid development of fruit after a slow start to the season, with a burst of heat in July and moderate temperatures through August and September contributing to steady development of flavor characteristics.

Oregon winemakers, who have suffered lagging sales of the 2007 vintage, hope this year’s crop will bring good wine to a receptive market when it hits shelves late next year and through 2011. Many economists are forecasting a recovery, albeit modest, by the end of 2010.

In the meantime, consumers have pared back spending in favor of wines perceived as delivering good value.

While several high-end wineries in Washington and Oregon are feeling the pinch of lower cash flows as consumers limit spending, many are seeing business pick up when consumers trade down from what other regions are offering.

A recent report by Wine Opinions, released at the recent Wine Industry Financial Symposium in Napa, noted that Washington wines are the leading alternative to premium Cabernet Sauvignon from Napa (read Wines & Vines’ coverage of the report here).

Moreover, the dividing line for sales was $20 a bottle -- with the biggest growth seen in the $6 to $15 per bottle range. Sales of wines at those prices from Woodinville-based Chateau Ste. Michelle are up 17% from a year ago, and Ste. Michelle Wine Estates is abandoning plans to discontinue its Stimson Estate Cellars brand. Stimson Estate wines include Chardonnay, Cabernet Sauvignon and Merlot that sell in 1.5-liter bottles for about $10.

“It’s driven by the change in the economy and the economic conditions,” said Jan Barnes, marketing director for Chateau Ste. Michelle Wine Estates. “There’s growth in the 1.5-liter business overall in the wine industry, so we thought that would be the right thing to do -- just to keep it.”

She added that consumers have been tending to trade down, choosing a $15 bottle of wine rather than a $20 bottle.

“Our high-end wines are definitely being impacted by the economy, and the restaurant business -- especially for the high-end wines -- (is) just dismal right now,” Barnes told Wines & Vines. She expects a recovery in sales to take hold by 2011, but it will continue to favor mid-priced wines.

“I think the consumer mindset has taken a long-term shift. I think they’ll be more selective,” Barnes said. “I do think there’s going to be a market for high-end wines and luxury wines forever. How big that segment will be will probably be the difference.”

According to Frank Roth, head winemaker for Tagaris Winery and its sister label Eliseo Silva Wines in Richland, Wash., the shift to value has been good, especially as the wineries take in what is looking like a record harvest.

Eliseo Silva Wines have seen uptake in New York because of their quality and reasonable prices. Both Eliseo Silva and Tagaris produce wines from estate-grown grapes, with pricing in the range of $10 to $15 per bottle for Eliseo Silva, compared to $30 for a Tagaris bottle.

Eliseo Silva’s production followed demand upward, and now runs at 22,000 cases per year versus 14,000 cases when it debuted in 2005. This year will see its largest harvest, the investment in vineyards pointing to confidence in the under-$15 segment of the market.

“It seems to be that things are picking up,” Roth said. “People are starting to get back into buying wine.” The interest in the Eliseo Silva label also seems to have benefitted Tagaris wines, Roth said, a phenomenon that came as a surprise.

The downturn in the economy not only drove sales of Eliseo Silva, he said, but it boosted awareness of the upper-tier label just as people who typically bought more expensive wines started to scale back their spending. “Eliseo Silva kind of pulled Tagaris along with it, just because people see the quality in the $10 product or $15 product that we have,” Roth said. “It’s worked very, very well for us.”

Statistics from the B.C. Wine Institute indicate that dollar sales in British Columbia of wines bearing the Vintners’ Quality Alliance seal totalled $164 million Canadian (approximately US$160 million), up 2.2% for the 12 months ended Aug. 31, 2009, over the same period a year earlier. Volume sales were up 3.7% for the same period, topping 6.9 million liters. Volume sales were trending up this summer, compared to last year, when the summer months showed a gradual decline.
 

 

 

SHARE »
Close
 
Currently no comments posted for this article.
 
CURRENT NEWS INDEX »


 
Wines & Vines Home
 
866.453.9701 | 415.453.9700 | Fax: 415.453.2517
65 Mitchell Blvd., Ste. A San Rafael, CA 94903
info@winesandvines.com
Wine Industry Metrics
 
Off-Premise Sales » Month   12 Months  
June 2014 $562 million
5%
$7,549 million
6%
June 2013 $535 million $7,094 million
     
Direct-to-Consumer Shipments » Month   12 Months  
June 2014 $87 million
17%
$1,669 million
11%
June 2013 $74 million $1,510 million
     
Winery Job Index » Month   12 Months  
June 2014 300
34%
220
21%
June 2013 224 182
     
 
MORE » Released on 07.15.2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Wines & Vines
Packaging Conference
 
Learn More »
 
 

Practical Winery & Vineyard Library
 
Search the PWV archive »
 
 

Direct To Consumer
Wine Shipping Report
2014
 
Download full report »
 
 

CALENDAR
  • July 29
     
    Organic Winegrowing Conference
     
  • July 30
     
    Sweet and Fortified Wine Association Meeting
     
  • July 30 - August 1
     
    Indy International Wine Competition
     
  • August 1-3
     
    West of West Festival
     
  • MORE »
 

READER COMMENTS
 
Article: Wineries May Lose Internet Domain Dispute »
 
All these arguments could be levied by any industry associated with any gTLD, new or...
Reader: Doug Barnett
 
Article: Wineries May Lose Internet Domain Dispute »
 
Do brands get hijacked now? Even though .wine does not yet exist, are there false...
Reader: Larry Chandler
 
Article: Resistant Weeds Threaten Vineyards »
 
Roundup is not benign. It does not always break down in a day or two...
Reader: Robert Rex
 
Article: Resistant Weeds Threaten Vineyards »
 
Mitigating water use in the vineyard in the first place is also an applicable tactic....
Reader: Guest
 
Article: Resistant Weeds Threaten Vineyards »
 
Having managed vineyards that have used both approaches, I would say that a diverse approach...
Reader: Guest
 
 


Directory/Buyer's Guide — Your Wine Industry Marketplace
 
 
WINERY SEARCH
 
 
Advanced Search »
SUPPLIER SEARCH
   by Product
 by Company Name or Brand
 
Browse by Category »
2014 Directory/Buyer's Guide
The Wines & Vines Directory and Buyer's Guide
 
 
EXPANDED ONLINE SEARCH INCLUDED WITH PURCHASE
 
ORDER NOW »
 
LEARN MORE »
 
 
Wines & Vines Magazine
 
 
LEARN MORE »
 
SUBSCRIBE »
 
Digital Edition Now Available!
Wines & Vines Digital Edition Now Available
 
LEARN MORE »
 
ORDER NOW »
 
 
The Wines & Vines Online Marketing System
 
The Industry Standard winery marketing application
 
FREE LIVE DEMO »
 
VIEW VIDEO »
 
 
 
 
Latest Job Listings
 Wine Club Manager
 Healdsburg, CA
DTC, Tasting Room and Retai
 Guest Relations Host
 Oakville, CA
DTC, Tasting Room and Retai
 Brand Manager Wolf Bla...
 Toronto, ON
Sales and Marketing
 Brand Manager/Develope...
 Paso Robles, CA
Sales and Marketing
 Territory Sales Repres...
 All Of California, CA
Sales and Marketing
 Sales Representative
 Northeastern Us, Southeastern Us, NA
Sales and Marketing
 Fine Wine Sales Repres...
 San Francisco, CA
Sales and Marketing
 Tasting Room Managemen...
 Dundee, OR
Sales and Marketing
 Harvest Intern
 Mcminnville, OR
Winemaking and Production
 Guest Services Represe...
 Benton City, WA
DTC, Tasting Room and Retai
 
More Job Listings >>
Follow Us On:
 
 





Home  |  About Us  |  Editors  |  Subscribe  |  Print Edition  |  Digital Edition

Advertise  |  Site Map  |  Contact Us  |  Privacy Policy
 
 
Copyright © 2001-2014 by Wine Communications Group, Inc. All Rights Reserved.
No material may be reproduced without written permission of the Publisher.
Wines&Vines does not assume any responsibility for any unsolicited manuscripts or materials.