Everyone we met in Idaho was keen on the potential of this sometimes overlooked wine region but at the same time aware that greater success — in terms of sales, recognition, and premium prices — is far from guaranteed.

Idaho, as I discussed in last week’s column, is unique in many respects, but it is typical of emerging American wine regions in that it is searching for the key that will unlock the latent potential of the people and the land.

Idaho Wine Surprises

One thing that surprised me was the vitality of the local wine market. Although Idaho has wine roots going back to the 1860s, the industry and the local wine culture was destroyed by Prohibition and was slow to recover afterward even by American standards.

Boise — the state capital and largest city — has changed enormously since I first visited over 30 years ago. The downtown now boasts both a Whole Foods Market and a Trader Joe’s — a sure sign that there is a critical mass of resident upscale consumers — and the wine department of the Boise Co-op supermarket grew so large that it took over a nearby building (it was crowded with interesting wines from Idaho and the world and buzzing with activity when we visited).

Pluses and Minuses

Boise impressed me as quite cosmopolitan. We had lunch on the Basque Block, for example, a cluster of Basque restaurants, social clubs and community center. Boise celebrates the cultural diversity that its Basque community brings and is working to strengthen ties (including wine connections) with the Old World. A group of local winemakers recently traveled to Spain to exchange ideas with wine people there, which seems like a great idea given the success some wineries are having with Tempranillo. A lot of pluses here.

And some minuses, too. Idaho wine is not well known outside the region and this is a disadvantage for those with national ambitions for their wines although obviously less of a factor if you define your market territory carefully to include the mountain states and parts of the Pacific Northwest.

Focused effort seems to be what is needed. Greg Koenig looks to be on the verge of success in China, for example, where buyers may not know where Idaho is but they understand what he has to offer — delicious Snake River Valley Riesling Ice Wine!

Building Brand Idaho

The economic structure of the Idaho industry is not ideal with big dog Ste Chapelle dwarfing the rest of the industry. It would be great if Ste Chapelle were to play a hegemonic role, working to grow markets and develop the supply chain for all of Idaho wine the way that Chateau Ste Michelle did for Washington wine in that industry’s early days. Or at least that’s what I was thinking  before my visit.

But these are different times and Idaho is a different place. Ste Chapelle is part of the dynamic Precept Wine group which has important wine assets in Washington, Oregon and Idaho and competes in a market environment where important new players (Gallo in Washington and Kendall Jackson in Oregon) have recently entered. Ste Chapelle must necessarily act as part of an ensemble, not as a solo performer, and while I think that great success is possible for the winery itself, it might not necessarily be able to pull the rest of Idaho wine along with it. The smaller wineries need to make their own paths and they seem to realize this fact.

I noticed that some of the new Ste Chapelle “soft” releases were designated “American Wine” even though they are for now at least made using only Idaho grapes. This will help the Ste Chapelle brand if and when they scale up production using fruit from other areas, but it doesn’t promote Brand Idaho. Not a criticism,  because I understand the business logic, but true nonetheless. On the other hand, however, it must be said that the Idaho wine industry would be much less vital without Precept’s key vineyard investments, which provide grapes for many smaller producers.

Opportunities

What will it take to bring Idaho wine to the next level? Well, I’m tempted to say that a big critical success would do it and high scores certainly help. The quality of the best wines makes strong ratings more than a dream (and in the case of a few wines, already a reality). But the market is very crowded right now and my winemaker friends tell me that even 90+ scores don’t always have the impact on prices and sales that they would like.

Wine tourism is another strategy that holds promise. The Sunnyslope area is a short drive from Boise and a wine trail is in place although it is hampered a bit by state restrictions on signage that limit the ability of individual wineries to direct buyers to their tasting rooms. Visitors from adjacent states represent an obvious marketing opportunity that effective wine tourism promotion could enhance.

New investment in vineyard assets would be welcomed hereabouts, as I wrote last week. But what will it take to get major vineyard investments that would fill the barrels and bottles that Idaho winemakers long to produce? Well, it’s complicated of course. From a strictly economic point of view the situation is that land must be worth more as a vineyard than at its next best alternative use — orchard, pasture or residential development — and this isn’t always the case.

Economic Impact

Idaho wines are often a bargain given their quality and tend to sell for much less than the Walla Walla wines that some makers compare them to. This helps sell the wines, but it also limits vineyard growth. Low wine prices dictate low grape prices, which means low vineyard land valuation.

 An economic impact statement prepared in 2008 projected that the number of Idaho wineries would continue to grow from 11 in 2002 to 38 in 2008 to 78 in 2015. The current number is around 50, much less than that estimate, and the number of vineyard acres has probably declined a bit from the 2008 level.  Is this just an understandable (given the Great Recession) pause in the upward trend or has the industry plateaued?

Too soon to tell, really, but I am cautiously optimistic. The land is there and the people, too, both thoughtful consumers and smart, hand-working producers.  I sense a new energy in America’s regional wine industries (this energy was captured in the book American Wine by Jancis Robinson and Linda Murphy). Idaho’s time will come.

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Here’s a list of some wineries from our visit. Sorry that we didn’t have time to visit others!

Bitner Vineyards

Huston Vineyards

Koenig Vineyards

Fujishin Family Wine Cellars

Hat Ranch Winery

Ste Chapelle Winery

Cinder Winery

Coiled Wines

Mouvance Winery

Telaya Wine Co.

The view down toward the Snake River from Bitner Vineyards

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We spent a weekend in the Idaho wine country last month and I’m still trying to make sense of the experience. It seems like every time I think I know what Idaho wine is I shift my ground a little bit and see something new and usually something different.

So the view keeps changing. Rather than trying to ignore this problem, I thought I’d make it the theme of this column.

Snake River Valley Views

Let’s start with the natural elements. The main vineyard area in Idaho winds along the Snake River and some of the views are spectacular — the photo above taken from Bitner Vineyards shows one of the best.

The vineyards reach down towards the river and the slope is key both because these  hillsides provide a natural solar-collector effect (the area is called Sunnyslope), but also because cold air drainage is an important factor in preventing frost damage to the crop and freeze damage to the vines.

The view shifts when you move along a few miles. This region is a high desert plateau. A lot of the land is pancake flat, ideal for many crops but not necessarily wine grapes, especially given the cold issues. Rainfall is surprisingly sparse here so access to irrigation water is key.

Although Idaho shares borders with both Washington and Oregon, there’s no question that its wine industry is more Columbia Valley than Willamette Valley. This might seem obvious since the Snake River joins the Columbia River on its way to the Pacific Ocean, but it’s mainly because they share that dry plateau feature.

No sense looking for a “signature variety” in Idaho as they do (in Pinot Noir) in Oregon. No, Idaho is more like Washington — lots of grapes can thrive here (in the right spots) and lots of interesting wines are possible. A blessing from a winemaker standpoint and a bit of a curse from a marketing point of view. Riesling to Tempranillo and lots of options in between.

Looking down to the plateau from Sawtooth Vineyard

Big Dog Ste Chapelle

From an economic point of view, on the other hand, Idaho is a world of big and small without too much in between. This is also a bit like Washington state wine, where Ste Michelle Wine Estates (including Chateau Ste Michelle, Columbia Crest, 14 Hands and other wineries) dominates making more than half of all the state’s wine. Ste Chapelle is the big dog in Idaho to an even greater extent producing a total of about 300,000 cases of wine under the Ste Chapelle label plus other brands.

Ste Chapelle is part of the Precept Wine group these days, having been bought and sold several times since it was founded in the 1970s as the U.S. wine business went through consolidation and then financial crisis. I think there is a sense that the stability that Precept can provide is welcome after some years of drama. The largest privately held wine company in the Pacific Northwest, Precept controls half of Idaho’s vineyard acreage (variously estimated at 1200-1500 acres) in addition to its assets in Washington and Oregon.

Ste Chapelle makes several lines of wine. Their “soft” (read sweetish) wines are technically well made and perfectly in line with current sweet red and moscato-style market trends. The soft red and a soft pink wine with a subtle huckleberry flavor are the top selling wine SKUs in the state, crowding out the California “usual suspects.”

Ste Chapelle also makes smaller (but still substantial) quantities of dry wines, including 40,000 cases a year of an off-dry Riesling that nearly stole the show at Riesling Rendezvous this year. And they produce Precept’s wildly popular Chocolate Shop and Almond Roca wines at their facility.

Limits to Growth

If Idaho is the land of the big it is also a world of small. From 300,000 case Ste Chapelle we drop sharply down to 12,000 – 15,000 case Sawtooth (also a Precept Wine brand) and Greg Koenig’s operation of about the same capacity, where he makes his own products as well as those of four other wineries including Bitner. That’s a big gap between #1 and the rest in terms of size and market penetration. Not too many of the remaining 40+ wineries in the state have total production as high as 5000 cases.

What limits growth? Well, you have to sell what you make, so market demand is an obvious factor. But I got the strong sense from several winemakers that they could sell more if they could make more. Vineyard capacity is a real roadblock.

While they were glad to be able to purchase fruit from the Precept group’s 400 acre Skyline vineyard, they needed even more. Land surveys indicate that there are many good sites that could contribute to the industry’s growth if only new investors would enter the region.

Made In (But Not of) Idaho

If Idaho has not attracted as many wine growers as it needs, it certainly has attracted wine makers who see this area as a good place to live and to work. A number of small urban wineries have sprung up as wine enthusiasts from other regions are attracted here and others who have left to establish careers elsewhere return home.

Many of their wines are clearly Idaho products, but we tasted a number of them that were made from grapes imported from Washington, Oregon and even California. The practice of using out-of-state or region grapes or juice is not that uncommon in the Pacific Northwest. Oregon’s largest winery, King Estate, brings in fruit from the Columbia Valley for its NxNW wines, allowing them to produce a more complete portfolio of wine varieties and styles. And the  Pamplin Family Winery in the Willamette Valley is one of several that make high quality Bordeaux blend wines using Columbia Valley fruit. And of course most of the grapes used in Seattle-area wineries are trucked over the mountains from Eastern Washington.

Necessity (and limited local grape supply) dictated the use of non-Idaho grapes in some cases, but we met several winemakers who cited passion for a particular style of wine as a driving force. I did a University of Puget Sound alumni program at the Mouvance Winery tasting room while we were in Boise and enjoyed their Pinot Noir and Pinot Gris wines made from the fruit of the family’s own vineyard in Oregon. Pinot passion drives this project and so Idaho grapes just won’t work.

What should we think about Idaho’s cross-border wineries? Well, just like everything else in Idaho wine it depends on your point of view. They certainly do contribute to the critical mass of winemaking that the industry needs to move ahead and clearly help foster what I see as a vibrant emerging wine culture (more about this next week). But I also picked up understandable concern that their efforts didn’t contribute as much as some would like to building the local industry from the ground (the vineyards) up.

Where is Idaho wine headed? My thoughts next week.

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Thanks to everyone who met with us during our Idaho visit. Special thanks to Jim and Melissa Thomssen, Ron Bitner, Greg Koenig, Gregg Alger, Maurine Johnson, Moya Shatz Dolsby, and the Idaho Wine Commission. Thanks to Sue Veseth for the photos.