COMMENTARY

Having a Brand Time

By Karl Klooster

When the words “big,” “Pacific Northwest” and “wine sales” are spoken in the same sentence, the name that almost always accompanies them is Ste. Michelle Estates of Woodinville, Wash.

Founded in 1986, Ste. Michelle currently owns or controls more than half of Washington state’s wine production. It is ranked seventh among all U.S. wine companies, with an annual volume exceeding 6 million cases.

Less well known but growing vigorously is Seattle-based Precept Wine Brands. The privately owned company started in 2003 when two industry pros joined forces to take advantage of the changing landscape.

Dan Baty and his family acquired the Columbia Winery in 1980. It was propitious timing, as the pioneering winery, founded in 1962, had brought in much-heralded winemaker David Lake just the year before.

During the 27 years leading to his retirement in 2006, Lake transformed Columbia into one of the state’s most prestigious wineries. In the process, he made it a worthy flagship of Baty’s company, which acquired additional wineries to create the Corus Estates & Vineyards wine group.

President and CEO Andrew Browne steered Corus along a course of diversified growth, focusing on value as well as quality. In the process, he and Baty worked together to build Corus into Washington’s second-largest wine company.

The Baty family sold most of its Corus Brands portfolio to international giant Constellation Brands in 2001, but it was only a temporary pause in the path forward. The Batys retained ownership of the 2,400 acres of vineyard land, as well as nearly 200,000 gallons of production capacity in Dundee.

In 2002, Baty and Browne collaborated once again to launch Precept Brands. Over the nine years since, the company has experienced phenomenal growth, through mergers, acquisitions, partnerships and joint ventures as well as expansion of existing brands.

Like Avis, whose “number-two-tries-harder” campaign helped it gain ground against car rental leader Hertz, Precept remains number two in Washington. But its growth, particularly in the last couple of years, has been astounding.

In 2009, Precept had about 50 employees on the payroll, up from a handful six years earlier. Today, it has more than 200, and they occupy a fashionable, high-beamed headquarters on Seattle’s chic Lake Union.

As of last count, Precept Wine owned more than 3,700 acres of vineyard land and seven production facilities, each with its own tasting room. And those numbers are subject to increase at any time.

Domestically, Precept bottles wine from grapes grown in Washington, Oregon and Idaho. Internationally, it also operates in Australia and Germany.

In all, the portfolio has come to include 36 distinct brands, generating sales of more than 700,000 cases annually.

Some of the names are well known while others are just emerging. But all have one thing in common: low pricing. Of the last 150 wineries bonded in Washington, Precept was the first to focus on producing and selling wines for $15 or less.

Apex, Avery Lane, Battle Creek, Bridgman, Canoe Ridge, Pine & Post, Sagelands, Washington Hills and Waterbrook have earned spots - called “facings” in the industry - on retail shelves. And other less-known Precept brands are joining them.

Armed with price, quality and continuity, Precept’s marketing team has made inroads into restaurant as well as retail settings. That’s no small feat, given the size and scope of alternatives in a relentlessly competitive environment.

Though Washington wines account for the bulk of Precept’s domestic offerings, the company has a significant Oregon presence through its 12th & Maple winery in Dundee, which produces Battle Creek, Blue Pirate, Primarius and Red Door.

Battle Creek is already firmly established. Red Door has wide trade acceptance, owing to its original ownership by McClaskey’s Wine Distributor in Portland, and Primarius might soon equal if not surpass them.

Priced at a modest $17, the 2009 Primarius Oregon won a bronze medal at the 2011 Pinot Noir Summit in San Francisco. The Summit is the largest tasting competition of its kind in America, so there’s considerable prestige attached to a good showing there.

It’s no secret that the stubbornly prolonged economic recession has led to greater price consciousness among consumers than ever before.

In that regard, wine consumers are no exception. They’re seeking better deals at higher quality levels and getting them.

With its philosophy of low pricing across the board, Precept Wine is positioning itself to tak-e maximum advantage of that mentality, ensuring its continued growth in the mass marketplace.

Although it’s the antithesis of the intensely personal, hands-on, owner-owned winery that has thus far characterized the Oregon industry, it may very well represent future trends.

This isn’t to say small wineries won’t survive, or that the quality levels must be compromised.

But change is inevitable. The face of the Oregon industry a decade from now is bound to look different than it does today.

Karl Klooster is the associate editor of the Oregon Wine Press and writes a wine column for the News-Register in McMinnville. He became professionally involved in wine in 1972. 

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