Washington State University

Small Farms Team

Too Much of a Good Thing?

Some vineyard and winery owners beginning to feel growing pains from bumper crops and expansion.

Ed Merriman, the Capital Press, Nov. 31, 2001

CANBY, Ore. - Winegrapes left hanging on vines at Saint Josef's vineyard near Canby are a sign of growing pains affecting Oregon's rapidly expanding wine industry.

For Joe and Lilli Fleischmann, who own the St. Josef's vineyard and winery and also serve as winemaker and hostess at their chalet-style wine cellar and tasting room, growth in the state's winegrape industry is bittersweet.

"Our piece of the pie is not so big as it used to be. Overproduction has depressed prices for grapes and for the wine," said Joe Fleischmann. When the Fleischmanns planted their wine grapes and built their winery in the 1983, about 92 wineries were operating in the state and they were able to sell all the wine and wine grapes they could produce.

Demand for Oregon wines at that time exceeded supply and prices were strong. Then word spread of similarities between Oregon's climate, terrain and soil, and those found in the prestigious wine grape-producing areas of France, Fleischmann said. Vineyards and wineries sprouted up across the state faster than the industry could open new markets. The glut of grapes these days led to grapes left rotting on the vines at the family's vineyard this year. In the past when he had excess winegrape production, Fleischmann said he had no trouble selling them to other wineries.

"There's no demand for the grapes because everyone has too many. I think people were surprised by the big production this year. There's no sense harvesting them if you don't have room in your tanks," he said.

Kirsten Wall, executive director of Oregon Wine Growers Association, said that by 1999 the number of wineries operating in Oregon had swelled from 92 in 1983 to 168 by 1999.

Then in a surge of winery construction that caught the industry by surprise, another 18 wineries were built in 2000 alone, bringing the total statewide to 186, Wall said. During the 1990s the number of vineyards statewide rose from 350 in 1991 to nearly 500 by 2000, representing an increase in wine grape acreage from 6,050 acres to 10,500 acres.

Some of the increase in both vineyard production and wineries came at the expense of existing winery owners such as the Fleischmanns.

According to reports from the Oregon Agricultural Statistics Service, only about 8,100 acres of the 10,500 acres of wine grapes planted statewide in 2000 were actually harvested. Despite the un-harvested acreage, excellent growing conditions produced a record crop of 18,600 tons of wine grapes, breaking Oregon's old record of 18,500 tons in 1997.

In addition to bumper crops, the past four years have been remarkable in terms of the quality of the grapes. Compared with 1997, the 2001 grape crop is easily 25 percent higher quality, she said. Wall said the bumper crops have pushed production capacity to the limits and played a major role in construction of such a large number of new wineries. While this growth has forced producers into the distasteful position of leaving good wine grapes to go un-harvested, Wall said there's also a sweet reward waiting for those who persevere.

"The exciting part is now that we have this surplus acreage and production capacity, we have enough supply to really go out and do some more aggressive marketing." she said.

That's exactly what the Oregon Wine Advisory Board is preparing to do with a surge in funding for promotion and research programs that's coming in from a $25 per ton assessment on wine grapes, said Betty O'Brien, OWAB interim executive director. This week the board brought in wine industry consultants from markets targeted for expanded wine exports - England, Canada and Japan.

Following a marketing planning session with members of the wine board Nov. 27, the consultants participated in a workshop co-sponsored by the Northwest Wine Coalition. It was attended by 50 representatives from 40 wineries and vineyards in Oregon interested in getting into the wine export business or expanding existing imports, O'Brien said.

With the industry pretty much saturated at this point, O'Brien said it's important for people interested in entering the wine business in Oregon to put together a solid marketing plan before taking that giant step.In the face of increasing competition, "I suggest that before getting into this wonderful, exciting, romantic business, people need to learn as much as they can and develop a. solid plan for how they're going to market their grapes or wines," O'Brien said.

For the Fleischmanns, despite the stresses, the business offers fulfillment. The whole Fleischmann family gets involved, including an artist son-in-law, Carl McNight, who draws pictures depicted on Saint Josef wine labels. Joe thrives on making the wine and Lillien joys, working in the tasting room as
hostess.

"It's fun. You meet people from all over," she said.

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