A quick getaway to Portland provokes a post about Oregon wine’s highs and lows.
Cheers for All the [Peak] Years
I was browsing through the wine books at Powell’s, Portland’s famous bookstore, when I came across a used copy of Vintage Timelines, a 1989 book by Jancis Robinson. The idea of the book was to select a group of the world’s greatest wines and examine how different vintages have evolved (and would be expected to continue to evolve) over time. The research required Jancis to taste trough verticals of each great wine (research is such a drag!) and compare notes from previous years to create complex and quite fascinating graphical timelines.
It’s a great book for wine lovers (despite its 1989 date) and valuable to me because of the particular wines Jancis selected for the study. No New Zealand or South African wines, for example. The recent history of their great wines was too brief in 1989 to permit long-term analysis. Just five Australian wines made the cut (led by Penfolds Grange Hermitage, of course). Seven California wines are listed and just one from the rest of the U.S. — David Lett’s Eyrie Vineyards Pinot Noir Reserve, the wine that put Oregon on the world wine map.
There is an inscription in the book. “To Nick — Cheers for all the years — past & future. Dave Lett, Christmas 1989.” Needless to say, I bought the book as both a research tool and a personal souvenir. It’s a good reminder of Oregon Pinot Noir’s humble origins and the high peaks it has climbed. Oregon’s wine industry is just a little over 40 years old, yet is is often mentioned in the same breath with Burgundy because of the quality of its best Pinot Noir wines, like David Lett’s Eyrie Reserve.
Whole Foods Letdown
So I was feeling pretty good about the Oregon wine industry when I stopped off at Whole Foods, about a block away, to survey their selection of Oregon wines. As I entered the store, however, I ran smack into a display of Oregon Pinot Noir priced at … wait for it … $9.99. That’s about ten dollars less than the usual price for an entry level Oregon Pinot. The wine was produced by Underwood Cellars, a second label of Union Wine Company, which also makes King’s Ridge. The fruit was sourced mainly from Southern Oregon — the Umpqua and Rogue Valleys — not the Willamette Valley where Eyrie and most of the other famous Oregon Pinots are made. The bargain price was a real shocker.
Oregon is a high cost wine production area. Even higher than Burgundy, I think, because many of the vineyards there have been in family hands for years and land costs are often not explicitly considered in calculating cost (an economic mistake, of course, as any Econ 101 student will tell you). That’s not the case is Oregon, where it is hard to ignore the cost of capital.
A study using 1999 data put the average cost of Willamette Valley Pinot Noir at $12.79 per bottle (see Oregon Viticulture edited by Edward H. Hellman for the details) and more recent proprietary data I have seen puts cost in the same range or higher. $9.99 might or might not be a sustainable price for a wine made from Umpqua Valley fruit, but it certainly isn’t a sustainable price point for Willamette Valley wine. If the price of entry level Willamette Valley Pinot were to reset from $20-$30 down to $10-$15 … well I think the Willamette River would bleed red ink. Click here to read a recent article from Wines & Vines about the Oregon situation.
Boom and Bust
The quality of Oregon Pinot Noir is higher than ever, I believe, but the industry’s economic health may be falling. Oregon (and New Zealand) rode the Sideways Pinot boom for several years, expanding vineyard plantings repeatedly because it seemed like the demand for this wine would never be satisfied.
Now the recession is here, Malbec is hot, the new Pinot vineyards in Oregon, New Zealand, Chile and elsewhere are all coming into production at the same time and prices are tumbling. Bargain Pinot Noir is a fact of life for now. It will be interesting to see where the market resets when supply and demand eventually find their new balance.
In the meantime, I guess there’s only one thing to do. Drink more Pinot Noir!
Last time I found it, Firesteed was going for well under $15 a bottle. What’s happening with that and similar introductory brands?
Wow Mike – you scored! I was in Powell’s about six weeks ago and I promise you that book was not there. I would guess that the Nick in the inscription is the now-retired owner of Nick’s Café, a winemaker hangout for decades. As for the falling prices of entry-level Oregon pinot… it’s about time. Why should consumers be responsible for paying costs of doing business? Global competition is what determines price points that ultimately define categories, and if consumers can find a better $10 pinot from somewhere else, they will certainly go there. But right now, at these prices, I would say Oregon is tops.
I agree that at $10 or so it is hard to beat Oregon Pinot. But I’m concerned that this isn’t an economically sustainable. You’ve done a great job, Paul, in both supporting the Oregon industry and being critical of its problems. Some critical rethinking will need to be done in the next few years.
I think it is the Nick of Nick’s Cafe, too!
“…only one thing to do. Drink more Pinot Noir.”
I’m all in for that idea Mike. Great piece.
It may be crossing the bridge the wrong way to discuss the past, but I can tell you from experience that selling Pinot Noir in this country, any Pinot Noir except Cru classe Burgundy, prior to “Sideways”, was a bitch! Most consumers & decision making gatekeepers didn’t truely understand it, producers were all over the board in production methods and all anyone could do was to compare their product to Burgundy as if…
Post that movie, clonal selection, site selection, production methods were investigated and invested in as never before. Educators were conducting more Pinot seminars and heck even the gray market was turning out fake Pinot Noir. Which is why I can’t trust and now many will not trust cheap Pinot Noir under a certain price point…(Thank you Gallo you did us all a solid for that one)
With the wave of enthusiasm cresting somewhat, Pinot Noir still enjoys favor in more places now than before that movie which wasn’t really about wine at all but social development. (he didn’t hate Merlot, He hated his X-Wife who he fell in love with over Merlot)
It may be a lasting or short lived cult effect, and only time will tell, but when the economic troubles are far in the past and consumer confidence returns, Pinot sales will continue climbing as the quintessential food wine it is and at $20+ a bottle way more affordable tha Cru Burgundy. drink on!
PS I love that book too but someone needs to make a sequal ad include other regions.
The Oregonian ran a piece on Union Wine Company last August. They’ve setup shop in Tualatin in order to keep costs down, over-deliver quality at their three price points, and keep their prices sustainable.
Your title, “Whole Foods Letdown,” is a bit misleading if anyone thinks it refers to the quality of a $10 bottle of Pinot. The 2009 Underwood is a surprisingly good Pinot. A great, crowd-pleasing wine for summer BBQ’s and get togethers. And the quality of this $10 wine bodes well for Union’s top label, Alchemist, which will come in under $30 and compete with much more expensive Pinot’s. I know Union’s new head winemaker and have barrel tasted the lots that will go into Alchemist. Wow!