Wine industry in a growth spurt
The Washington Wine Commission’s growth projections for the industry could come earlier than planned.
Spanish Castle Vineyard looks like a sea of milk cartons and grapevines. The 180-acre vineyard is located along Highway 28 near Rock Island Dam and was planted last spring by Jerry and Ryan Flanagan.
PHOTOS BY GERALDINE WARNER
Washington’s wine industry is in another growth spurt, though it’s not as obvious as the big boom in the late 1990s to mid-2000s when acreage tripled, winery numbers quadrupled, and it seemed every Seattle wine lover became an overnight grape grower or winemaker.
What’s different this time is that the growth is measured, planned, and being encouraged by wineries with contracts in hand. Growth is in response to steady wine sales and not based on speculation.
The Washington Wine Commission, established to promote Washington wine, completed a strategic plan last summer to forecast where the industry would be in five years. Steve Warner, executive director of the Wine Commission, says that the board of directors used the following assumptions to help forecast the future:
Assumption 1. National wine industry will continue to grow at 3 percent annually, which will result in total wine sales of 350 million cases by 2017 (based on data showing U.S. wine sales have increased in volume an average of 3 to 4 percent for the last 18 years).
Assumption 2. Washington’s wine industry will grow an average of 5 percent in the next five years. (The state has outpaced the national sales average in the last few years and is currently 12 percent ahead of previous year numbers. Five percent was deemed conservative by the Washington Wine Commission board, according to Warner.)
A growth of 5 percent annually means the state will produce nearly 16 million cases of wine by 2017, Warner said. Washington produced approximately 10 million cases of wine in 2010 from the state crop of 160,000 tons (a ton of grapes yields around 63 cases of wine).
“Sixteen million cases of wine translates into about 62,000 bearing acres,” he said, adding that the commission used a baseline of 45,000 acres, the most current statewide acreage number available. A U.S. Department of Agriculture survey done in 2010 and released in 2011 reported nearly 45,000 acres were planted to wine grapes.
Warner said the original wine grape crop forecast made internally last summer by the Wine Commission for budget and promotion purposes was 176,000 tons—a number that was revised in August to 190,000 tons.
The USDA forecast a wine grape crop of 185,000 tons last August, which would top the previous record of 160,000 tons in 2010. Final crop size numbers are usually released by the USDA in January and were unavailable at press time for Good Fruit Grower.
“Is the 190,000 tons an anomaly from good weather in the fall, or is it the new baseline normal?” Warner asked. “The commission thinks it may be a new baseline, and if so, acreage projections and tonnage of the strategic plan would be reached by 2014, even earlier than we forecast.”
He noted that the commission threw out the 2011 crop when it was averaging yields and projecting future acreage because the crop was so short due to a Thanksgiving freeze the previous fall.
“Washington State has a great future when it comes to wine,” Warner said, ticking off the positives: abundant land, strong demand for wine that has in turn strengthened grower returns, entry of the world’s largest wine family (Gallo) to the state, and a new American Viticultural Area called Ancient Lakes that will encourage more planting in that region.
“We’re gaining national and international recognition for our premium quality wines,” he said. “We’ve really got a bright future.”
In talking to wine industry members about the future, Warner says that both growers and wineries expressed every intention to continue to expand to meet the demand for Washington wine.
“From the grower’s perspective, one of the biggest challenges is what varietal to plant that will be in demand four years from when it’s planted,” he said. “There isn’t just one variety for the state—we produce 30 different varieties. We do everything so well.”
Washington is nationally recognized for its premium Cabernet Sauvignon, produces some of the best Merlot in the country, and Riesling is its leading variety, Warner said. “We’re scoring well on so many Bordeaux varieties, and more than half of the state’s acreage is planted to red varieties.”
“It’s hard to find a variety that doesn’t do well here,” he said. The state is such a relatively young wine region that growers are still discovering which variety does best where, and even identifying microclimates within a vineyard.
“In the next decade or so, we’ll really be rocking as we continue to dial down the best locations, fine-tune irrigation regimes, reap the benefits from the soon-to-be-built Wine Science Center by Washington State University, and improve overall knowledge of how to grow premium grapes in the industry.”
Warner said that this time, growth is measured and not the frenzied planting and expansion that happened 15 years ago.
“Our base continues to grow, and we could easily surpass the commission’s five-year projections when we get to 2017.”