Mattawa, Wash.—When Washington state grapegrowers gather here next week for the annual Washington Association of Wine Grape Growers meeting, they’ll have more than viticulture on their minds. According to the latest vineyard and wineries market update by sponsor Northwest Farm Credit Services, opportunities for the industry in 2012 will be pinched by higher expenses.

“Compressed margins may present challenges to growers as a result of static grape prices and rising production costs,” the report states. “Some regions, particularly in Eastern Washington, will be faced with potential crop shortfalls resulting from the continuing impacts of 2010 frost damage to vines.”

The outlook rings true for Dustin Tobin, viticulturist for Milbrandt Vineyards in Mattawa, Wash., which is confronting higher costs for fuel and fertilizer in 2012. Milbrandt is also raising the minimum wage it pays vineyard laborers in the face of competition for workers. Some tree fruit growers, Tobin noted, will pay crews an annual salary to ensure their availability even if they’re not required year-round.

“It’s really, really hard to compete with that,” he said. “We do have a shortage out there, and it’s really tough to find workers, especially in viticulture.”

The labor question has been particularly challenging in the past two years, thanks to the challenging weather that Northwest Farm Credit mentions in its report. Skilled workers are needed to manage vineyards to produce the best-quality crop, putting growers in the unique position of having to boost labor costs to short their crops.

This translates to opportunities for workers, but it comes at a price: Milbrandt just hired a viticulturist and winemaker, and Tobin—without giving away specific numbers—noted that this kind of talent comes at a cost of no less than $40,000 per year.

The good news for students considering careers in the wine industry is that it’s one of the fastest growing agriculture sectors in the state, despite the challenges, and skilled workers to meet the challenges are in demand.

A free session at the WAWGG meeting in Kennewick on Feb. 9 will highlight opportunities for students from high school through college grads. “It’s the perfect opportunity for that person to sit in the room. He or she can get a sense of what it takes, if any of these roles fit them, and if they would like to pursue this as a career,” said Tobin, who will chair the session.

Scheduled speakers include Ste. Michelle Wine Estates viticulturist Jason Schlagel, Sagemoor Vineyards vineyard manager Derek Way, assistant winemaker Bryan Weil of Hogue Cellars, and Eric Zegzula, wine steward and sommelier at Anthony’s Restaurant in Richland, Wash.

A networking reception afterwards will let students connect with the speakers and university contacts Amy Mumma of Central Washington University and Loann Ayers of Washington State University-Tri-Cities.

Oregon Symposium will tackle distribution
Dealing with the economic side of the equation is another matter. Keeping production costs low is helpful, but the Oregon Wine Industry Symposium to be held Feb. 21-22 in Portland, Ore., will offer—among other sessions—tips on working with distributors to get the most value for bottled wine.

Eugenia Keegan and Ellen Brittan are surveying 500 wine distributors regarding their criteria for adding new brands and what makes for a successful relationship. They’ll bring their conclusions to Portland for vintners to consider.

Brittan, who with her husband Robert operates 1,500-case Brittan Vineyards in McMinnville, Ore., said that in her experience, wineries that talk with distributors will have a better chance at succeeding in markets and managing their cash flow.

“They all have large books now,” she told Wines & Vines. “So make it easy for them to work with your brand by providing them with information and projections.”

Brittan said the onus is on wineries to manage their brands and help distributors do what they’ve been selected to do—distribute product and make it available. Wineries that provide information about release schedules, anticipated production volumes and pricing issues—whether connected with production costs or conditions in the markets where they hope to sell—will fare better in terms of sales.

Brittan said many small wineries dictate sales targets for their distributors. These may not be realistic given the size of the distributor’s portfolio or how consumers are behaving. A successful relationship with a distributor can pay off by reducing the cost of reaching markets, leaving more room for what the winery does best—making wine.

Anything to do with traveling, advertising or other added costs is obviously expensive, and usually very difficult for small producers, Brittan said. “What we’re trying to feed them is the best way to spend your time and resources when working with distributors.”

The annual meeting of the Washington Association of Wine Grape Growers takes place Feb. 7-10, 2012, in Kennewick, Wash. Oregon wineries and growers will gather Feb. 21-22 in Portland, Ore., for the Oregon Wine Industry Symposium.