Shine On

Latest reports show Oregon a bright spot in U.S. market

By OWP Staff

Two important national wine industry studies released in January show Oregon wine continuing its upward trajectory. First, the 2022 State of the U.S. Wine Industry Report, written by Rob McMillan, EVP and founder of the Silicon Valley Bank Wine Division, revealed brisk growth from its survey of 633 U.S. wine businesses, 50% reporting annual production of 5,000 cases or fewer.

McMillan says Oregon winemakers were more optimistic about the overall economic recovery, consumer demand and access to capital than nearly all their peers in other U.S. grapegrowing areas. In 2021, Oregon respondents were much more unlikely to consider selling their businesses, compared to peers in California, Virginia, Washington and other regions, a contrast to sentiments in past years. In fact, winemakers in Oregon ranked near the bottom of nine regions when business owners expressed how likely they were to “seriously consider” selling, displaying Oregonians’ intent to stay put.

Northern Oregon winemakers also appeared bullish for 2021, with 53% of participants calling 2021 either “one of our business’s better years” or “the best in our history,” a 30% increase from a year ago, when only 23% said the same. Northern Oregon wineries reported the second-highest total revenue growth rate (24%), ahead of Napa (17%) and trailing only Washington state (33%) among major U.S. growing regions.

Regarding quality, 56% of Northern Oregon respondents considered 2021 “one of our better years” or “the best in our history.” Similarly, Northern Oregon winemakers led all regions when self-reporting fruit quality at harvest, with 75% describing yields as “excellent” vs. 51% for Washington and 66% for both Napa and Sonoma.

While McMillan warns that U.S. wineries may be lacking marketing to attract younger drinkers, and that prices for glass pours may raise in 2022, the report shows wine sales reaching highs not seen since 2007, more than a decade ago.

“While the wine industry is going through consumer change that impacts all producers, Oregon’s performance stands out among all other regions by virtually any measure you choose but most important, by industry sales growth,” said McMillan.

In another report released in January, the 2021 Direct-to-Consumer Wine Shipping Report from Sovos ShipCompliant and Wines Vines Analytics, Oregon also showed growth.

Although Oregon wines account for only approximately 1.5% of U.S. wine production, they represented 6.8% of direct-to-consumer (DTC) shipment wine value nationwide last year. “Oregon wineries, with their 12.9% year-over-year increase in volume and 18.7% increase in value of shipments, outperformed all other regions tracked in 2021…” Buoyed by vigorous Pinot Noir shipments, Oregon wineries received an average of $42.45 for every bottle mailed.

While Oregon’s case volume rose almost 13% and Washington’s dropped almost 3%, Oregon commands a unique niche among wine lovers willing to pay 5.5% more on average per bottle of Pinot Noir, up to $51.29 in 2021.

The report states, “In Oregon, Pinot Noir shipments dominate in a way that not even Cabernet Sauvignon can in Napa … Pinot Noir shipments still increased 8.2% in volume and 14.2% in value over 2020. This led to Oregon outperforming all other regions tracked in this report in 2021.”

Oregon Chardonnay made headway in shipments and garnered the most attention of varieties in 2021. As the second-most shipped wine from Oregon wineries in 2021, Chardonnay shipments increased by 28.7% in volume and 36.4% in value while enjoying a 6.0% increase in average price per bottle shipped over 2020. As a category, Chardonnay only represents 10.4% of the overall value of Oregon shipments, but the increase in the value of Chardonnay shipments contributed 17.7% of the state’s overall increase in the value of shipments.

This trajectory is also apparent as Chardonnay raised its public consciousness in 2021. According to media monitoring service Meltwater, articles about Oregon Chardonnay increased 162% in 2021 over 2020, from 762 to 2,044 stories mentioning the variety in Oregon. Similarly, in 2020, with 5,441 articles specifically mentioning an Oregon grape variety, Chardonnay captured 14% of all Oregon wine stories. However, in 2021, Chardonnay was mentioned 36% of the time.

Sparkling wine, representing 4.1% of the volume and 3.8% of value of the state’s DTC shipments, was also rose in 2021, with increases of 60.7% in the value of its shipments and 55.6% in the volume of shipments over 2020.

Web Design and Web Development by Buildable