Wines & Vines Home
   
 
Welcome Guest
LOGIN |  CREATE ACCOUNT
 
ADVERTISEMENT
 
 
 
10.27.2011  
 

California Fund Ditches Vineyard Managers

Retirement system's ambitious Northwest plans outstripped economic reality

 
by Peter Mitham
 
 
CalPERS chart
 
Paterson, Wash.—The California Public Employees’ Retirement System’s slice of Northwest wine country hangs in the balance, with the dismissal of Premier Pacific Vineyards Inc. as the system’s partner in management and development of thousands of prime vineyard acres in Washington state and Oregon.

Premier Pacific, partner with CalPERS in Pacific Vineyard Partners LLC, ambitiously purchased a 3,500-acre ranch in 2007 in Washington’s Horse Heaven Hills AVA for a price rumored to be in the range of $5,000 per acre. Plans for the acreage operated as River Ridge called for high-density plantings of up to 3,000 vines per acre. Washington state vineyards typically average 600 vines/acre. Development would have been expensive, but the partners expected the resulting wines to command premium prices.

“It means more stakes, more hose, more emitters, as well as more vines and so on, and that’s the way the great vineyards are planted in Napa and Bordeaux and Burgundy,” Bill Hill, co-founder of Premier Pacific and now former CEO, told Wines & Vines in 2008. “Our development costs alone are going to exceed $40,000 an acre. So if we buy ground for $5,000 or $10,000 an acre, and we put $45,000/acre in it, we certainly aren’t going to sell for $30 a bottle.”

Reality takes hold


Unfortunately, that’s where consumer budgets went as the Great Recession took hold and buyers began seeking cheaper wines and better value. CalPERS was forced to take a hard look at its plans.

To date, just short of 140 acres have been planted at River Ridge.  CalPERS spokesperson Brad Pacheco has not responded to requests from Wines & Vines for comment on the decision to part ways with Premier Pacific, or the state of its Northwest vineyards. He has been quoted in other media saying that CalPERS hopes to have a new partner on board by the end of the year.

The properties face significant headwinds, however, if the fluctuation in the market value of the Pacific Vineyards ventures is any indication. The CalPERS investment report for the year ended June 30, 2010 pegged the market value of its properties at $64.4 million, well below the original cost of $73.9 million. It’s also well below the market value at the close of the previous fiscal year, when the portfolio was worth $87 million.

Any future partner will have to be savvy about the value of the properties as it seeks financing for future development and delivery of wines to market under the current economic conditions.

It’s a far cry from where Bill Hill optimistically indicated the Washington state vineyards would be heading when he spoke with Wines & Vines three years ago. “We’ve got a little over 200 acres that’s going in,” he said. “At some time in the next few years, we would expect to gradually build that up to as much as a 2,000-acre vineyard.”

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 2015 $602 million
5%
$8,101 million
6%
June 2014 $571 million $7,676 million
     
Direct-to-Consumer Shipments » Month   12 Months  
June 2015 $92 million
6%
$1,901 million
14%
June 2014 $87 million $1,669 million
     
Winery Job Index » Month   12 Months  
June 2015 366
22%
261
19%
June 2014 300 220
     
 
MORE » Released on 07.15.2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

Direct To Consumer
Wine Shipping Report
2015
 
Download full report »
 
 

Practical Winery & Vineyard Library
 
Search the PWV archive »
 
 

CALENDAR
  • July 20-31
     
    UC Davis, OIV marketing program
     
  • July 31 - August 2
     
    West of West
     
  • August 1
     
    Urban Wine Xperience
     
  • August 7
     
    International Cold Climate Wine Competition
     
  • MORE »
 

READER COMMENTS
 
Article: Does Red Blotch Affect Wine? »
 
I have a grapevine in my polytunnel in east London which is showing signs of...
Reader: Guest
 
Article: Central Coast Wine Harvest Begins »
 
Here at Flying Goat Cellars in Lompoc we harvested last week the Bien Nacido Pinot...
Reader: Guest
 
Article: The Spiciest Wines You Have Ever Tasted »
 
I'm curious as to how 'guest' defines wine and their rational for claiming this is...
Reader: Rob McDonald
 
Article: The Spiciest Wines You Have Ever Tasted »
 
This is not wine. This is aromatized drink. Like vermouth.
Reader: Guest
 
Article: Gallo, Barefoot Dominate Off-Premise Sales »
 
If the wines listed make up 80% of the US wine sales I'm proud to...
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 »
2015 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
 Tasting Room Host
 Brentwood, CA
DTC, Tasting Room and Retai
 Director Of Marketing
 Healdsburg, CA
Sales and Marketing
 Winemaker
 Peachland, BC
Winemaker/Enologist
 Sales And Merchandisin...
 East Bay /Contra Costa County, CA
Sales and Marketing
 Compliance Specialist
 Santa Rosa, CA
Sales and Marketing
 Wine Club & Tasting Ro...
 Paso Robles, CA
DTC, Tasting Room and Retai
 Vineyard Manager
 Mccordsville, IN
Vineyards
 Weighmaster
 Oakville, CA
Cellar, Lab and Production
 Hospitality And Events
 Healdsburg, CA
DTC, Tasting Room and Retai
 Harvest/Cellar Worker
 Calistoga, CA
Cellar, Lab and Production
 
More Job Listings >>
Follow Us On:
 
 





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

Advertise  |  Site Map  |  Contact Us  |  Privacy Policy
 
 
Copyright © 2001-2015 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.