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VINEX Regional Report - Oregon
By Helen Arnold
“Oregon is the most dynamic wine region in the US right now, and is only beginning to tap into its potential.” So wrote no less an authority than the Spectator’s senior editor Tim Fish.
Praise indeed, but it wasn’t so long ago that Oregon was far better know for its pioneering Wild West past than its wine, with the state’s wine industry expanding in a relatively short space of time to become the fourth largest producing state in the country, behind only California, Washington and New York. The state is also now renowned for the quality of its Pinot Noir, being regarded as one of the premium producing regions in the world.
Wine history
Not bad going for a state which can only really date its wine production back to the early 1960’s when a few entrepreneurial farmers started dabbling in planting grape vines. Richard Sommer, who could be dubbed the father of Oregon’s modern wine, planted a number of different varietals including Riesling, Chardonnay and Zinfandel at his HillCrest Vineyard in the Umpqua Valley back in 1961, and in 1967 he harvested his very first crop, which yielded 6,000 gallons of juice. He then went on to bottle Oregon’s first ever vintage of Pinot Noir that year.
By the 1970’s there were five commercial wineries, with 35 recorded acres planted with vines, but fast forward to 2019, and the Oregon wine industry has since burgeoned to 793 wineries across the state, with an additional 24 joining the ranks only last year. North Williamette Valley is the region with the highest number of vineyards, with 651 at the last count, while South Williamette valley enjoyed the biggest increase with its numbers swelling by 16, the biggest regional growth last year bringing the total number of vineyards in the area to 89.
Increasing production
Not only are the number of wineries increasing, but the acreage dedicated to grape vines is also on the up.
In the past year plantings have risen by 6% adding nearly 2000 more acres, up from 33,996 to 35,972 acres. The highest growth rate in planted acres was recorded in the Umpqua and Rogue valleys, both areas gaining 10% more plantings. And it would appear there is still much potential for growth, if you consider that there are more than 34,600 farms and ranches in the state, currently occupying some 16.4 million acres, with an average farm size of 474 acres (Oregon Department of Agriculture).
Given that only around 0.2% of cultivated land in the state is currently dedicated to vines, we are likely to see an increasing number of farmers switching to grape production in the near future, to cash in on the state’s growing reputation for quality wine. The biggest barrier to further growth, according to Oregon Wine Board’s communications manager Sally Murdoch is limited consumer awareness, though that is changing.
While plantings continue their seemingly inexorable rise, sales too have been healthy, posting a 12% increase in the US domestic market, an extremely robust performance when compared to the total table wine category’s performance of -0.6% over the same period.
Market value
For the first time, the estimated value of Oregon’s wine grape crop topped the $200m mark in 2018 at $208m, up from $192m the previous year, an 8.8% increase. According to IPRE, Oregon wine sales grew from $550m in 2017 to $607m last year, boosted by a 19% increase in direct to consumer shipments, according to the Sovos/Wines Vines Analystics 2019 Direct to Consumer Wine Shipping Report.
Tom Danowski, Oregon Wine Board president, noted that industry momentum is due to the increasing recognition of Oregon’s reputation for quality and consumers’ willingness to seek out and pay for exceptional wines.
“Visit any winery or vineyard now in the midst of harvest, and it’s easy to see the skills, experience and extra effort from winemakers, vineyard managers, growers, tasting room staff and everyone involved in the process of crafting Oregon wines,” he said.
CLIMATE
Oregon’s wine producing regions share a cool climate, primarily because there are no mountain ranges to separate the vineyards from the Pacific Ocean. The Williamette Valley where most Pinot Noir and Pinot Gris is produced is cool, while the Umpqua Valley is considerably warmer, and the site of Oregon’s first winery - Hillcrest.
The Rogue River Valley is warmer still and is a region where Cabernet Sauvignon and Merlot often thrive better than Pinot Noir.
The ocean influence brings cooler temperatures and rain to the region, which enjoys long warm summers, with cool evenings which helps maintain acidity in the grapes.
VARIETIES
Pinot noir continues to reign supreme among varieties, with more than 20,000 acres planted representing a modest 5% jump. This leading variety accounts for 56% of all planted acreage and 58% of 2018 wine grape production. Oregon’s second-most planted variety, Pinot Gris, grew by 4% this year, and now has 5,078 planted acres. Merlot plantings leaped by over a quarter (26%) in acreage, while Cabernet Sauvignon jumped by 25%, Syrah also made significant gains, up by 21%, and Cabernet Franc and Chardonnay continued their healthy ascents at 16% and 13% growth respectively.
New varieties that made their way to the chart for the first time include Albariño and Gamay. Viognier added almost 100 more planted acres, an increase of 38%.
EXPORTS
Of the 4.14m cases of wine that Oregon produced in 2018, a mere 2.5% or 104,477 cases were exported to overseas markets, with Canada the leading export destination for Oregon wines, accounting for 45% of export sales, with Canadians consuming 47,338 cases of Oregon wine.
Notable growth was seen in Scandinavian markets, with a 59% increase in wines exported to Denmark, and Asia, with 15,258 cases of Oregon wine exported supported by increases in exports to Japan, China, Hong Kong, South Korea and other Asian countries.
Oregon is yet to cash in on the huge Chinese market, with only 2,894 cases shipped to mainland China and Hong Kong last year, accounting for a very small percentage of the state’s annual global sales.
“Oregon’s wine presence in mainland China has been somewhat limited over the years, and at the same time, China has increased its own domestic production of wine,” said Oregon Wine’s Sally Murdoch. “The few dozen Oregon wineries active in Asia are found more readily in Tokyo, Osaka, Hong Kong and to limited degrees Seoul, Singapore and Taipei. While we are concerned about the Chinese government’s actions on US wines we are pleased that it does not, so far, affect the US’s free trade agreement with Hong Kong, where more Oregon wine is sold than to the mainland.”
Oregon Wine’s VP of Governmental Jana McKamey added: China tariffs have gone up further as the trade war escalates. Given our small footprint in China this doesn’t impact Oregon wine sales to a great extent. However California and Washington producers are being impacted and there’s an argument that this can create more competition here and in other international markets because that wine has to find another “home”.
OUTLOOK FOR 2019 HARVEST
In the Willamette Valley the harvest kicked off on August 30th for sparkling wines and then continued with Chardonnay grapes. “The grapes are looking beautiful for Pinot Noir and while right now (September 18th) many vineyards have not yet picked as the brix is around 22-23, and they like to pick at 23 – 24, things are getting close and looking great according to what I’ve heard,” said Murdoch. “Grapes are coming in from Southern Oregon to be processed in the Willamette Valley in the next few days.”
This is confirmed by Chris Graves of Naumes Family Vineyards In Talent, Southern Oregon, who described the Pinot Noir harvest which started on August 26th, and concluded with Chardonnay on August 29th as “beautiful”. “Fruit looks incredible, and flavours and chemistry are all in balance,” he said.
“No smoke this year, not too hot, fruit has developed perfectly. I’m happy to say, apart from a bit of mildew pressure earlier in the summer, we have had very little issues with disease.”
Over in Quady North in Jacksonville, Herb Quady concurred. ”This is the way it should be in southern Oregon,” he said, “When we have a nice, average year as far as heat goes. We see it through the grape quality, and a lot of power to the vines.” Quady harvested Pinot Noir for sparkling on August 27, Chardonnay, Pinot Noir and Pinot Gris on August 28, and Pinot Meunier on August 31. “We’re seeing some really nice flavours in the vines, and for the most part, average yields,” he said.
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