The Oregon Grape and Wine Industry

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The Oregon Grape and Wine Industry

• AAWE Conference
• 15 August, 2008

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About Us
People Honest, collaborative, friendly,
accessible, authentic
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Sources NASS, Dr. Greg Jones, Southern Oregon
University, 2008
Sources NASS, Dr. Greg Jones, Southern Oregon
University, 2008
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Source Dr. Greg Jones, Southern Oregon
University, 2008
Sources NASS, Dr. Greg Jones, Southern Oregon
University, 2008
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Sources NASS, Dr. Greg Jones, Southern Oregon
University, 2008
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Sources NASS, Dr. Greg Jones, Southern Oregon
University, 2008
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Sources NASS, Dr. Greg Jones, Southern Oregon
University, 2008
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Economic Impact

• Over 1.4B
• 8,479 jobs
• 203M in wine-related wages
• 92M tourism revenue
• 1.48M annual winery visits
• Wine grapes rank in dollar value within Oregon
  agriculture 4th

Sources Full Glass Research, OWB, OWA (2005)
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Ultra-Premium Focus

• Successfully focused on the higher priced, higher
  quality segments
• Highest average returns per ton
• Highest average revenues per case
• Despite producing a much smaller volume of wine,
  OR winery revenues per capita compare to NY and
  WA

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Outlook generally positive

• Demand for PN PG remains high
• Production costs are reasonable for the quality
  obtained
• Market outside NW underexploited, offering solid
  growth potential
• Wine tourism underdeveloped compared to CA wine
  regions
• 5 percent of overnight leisure trips involved
  winery visits
• Far lower than Mendocino, San Luis Obispo and
  Amador counties (1025)
• Tourism infrastructure not keeping up with
  industry growth
• However, competition fierce, especially in a
  softening economy
• Market will need to absorb significant increases
  in the supply of PN and some other varietals

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Unique Business Challenges

• No significant economies of scale no large
  vineyards possible
• Not about cost minimization, but margin
  optimization
• No extraordinarily large player, unlike CA and WA
• Limited marketing budgets
• Many second career owners not in it for the money
• Not always a rational economic system
• Securing effective distribution in 3 tier system
• Emphasis on direct distribution margins vs.
  efficiency