Strong demand and weak harvest equals Oregon wine shortage

The Associated Press
PORTLAND, Ore. (AP) — A strong national demand for pinot noir combined with weak harvests in 2004 and 2005 have left many Oregon winemakers low on inventory.

At WillaKenzie Estate Winery in Yamhill, inventory shortages forced the winery to close its tasting room last fall for the first time, in an effort to stockpile wine. It remained shut during the popular Thanksgiving wine-country weekend and opened on a limited basis last month.

"We try to plan for all sorts of eventualities," co-owner Ronni Lacroute told The Oregonian newspaper. "But this is something we never thought could happen."

Across the northern Willamette Valley, at least, wine producers of all sizes are learning that it can happen.

"We've experienced shortages in the past, but nothing as severe as this," said Bill Hatcher, founder of A to Z Wineworks in Dundee. "If this continues, we're certainly going to see weaker brands fall out of the market."

Winemakers admit that it's not an entirely bad problem to have. After all, it's better than having massive inventory because of weak demand. And, so far, the shortage hasn't been troublesome for most wine drinkers. Prices, both for raw grapes and finished wines, have risen only slightly in the past year.

The 2006 harvest also brought good news — 20 percent to 30 percent higher yields than either of the prior two years. But with recent reports showing that supermarkets across the country are selling 20 percent more Oregon wine than a year ago, the stronger harvest may not be enough to restore balance.

Willamette Valley Vineyards addressed its shortage recently by signing a deal with 60-acre Elton Vineyards in the Eola Hills. The long-term lease guarantees the winery all of the vineyard's fruit starting in 2008.

While that's good news for Willamette Valley Vineyards, it spells trouble for existing Elton customers who will no longer get their supply from there. In a similar winners vs. losers situation, an East Coast restaurant group recently used its financial clout to sign a 15-year lease for the grapes from another 60-acre vineyard also in the Eola Hills, northwest of Salem, which had long been relied upon by smaller Oregon producers.

"You have two choices if you want to remain viable," said Dick Shea, a longtime Oregon vineyard and winery owner. "You can get someone else's existing vines or get some land yourself and do it the real slow way."

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Information from: The Oregonian, http://www.oregonlive.com