Oregon vineyard purchases by Kendall Jackson, Ste. Michelle Estates, Precept Wine, Domaine Drouhin, and this week’s purchase by Elk Cove Winery have led to speculation that the Oregon wine industry is going the way of California – large corporations buying up prime vineyards and forcing small wineries out of business. Pundits claim “we’re on the verge of something big!”
The truth is a bit less exciting.
California Public Employees’ Retirement System (CalPERS)
is leaving Oregon and their vineyards are being sold.
Is there a “Great Oregon Land Grab” as recently described in a national wine magazine? Interest in Oregon wine is huge as demonstrated by the continuing stream of new wineries and the expansion of established wineries like Sokol Blosser and Ponzi, both of which recently added large new tasting room buildings to their businesses complete with California-style amenities like fireplaces, formal dining rooms, and demonstration kitchens.
But the idea that vineyard purchases of the last year indicate a sea change in the ownership of Oregon’s vineyards is a trifle overblown. More than anything, it is an ending to a story that began with a California sized entry into the Oregon wine industry by a huge pension fund looking to diversify.
CalPERS and Premier Pacific Vineyards in Oregon
If you were making or selling Oregon wine in 2002, you remember the big news that year – a California business was buying large parcels of land in the North Willamette Valley and planting vines. The size of the sites and the agricultural practices of the developers came under scrutiny, not always complimentary.
The investor was CalPERS. It hired Premier Pacific Vineyards to manage a fund – Pacific Vineyard Partners LLC – that would purchase 1500 acres of land in California and Oregon and develop vineyards. CalPERS reportedly put $200 million into the project.
The venture into vineyard development did not produce the successes hoped for. In March 2011, the North Bay Business Journal reported that the fund with CalPERS’ $200 million investment was worth $68 million. Later that year, CalPERS fired Premier Pacific Vineyards, manager of the properties. CalPERS hired Pacific Vineyard Partners in January 2012 to manage the properties, many of which have now been sold.
With the recovery of the economy, it makes sense that CalPERS is taking advantage of a growing real estate market to sell its Oregon vineyards. Today the PPV website serves as documentation for a vineyard management company that is no longer in business. The current PVP site lists Oregon vineyards all of which have been sold. If CalPERS has further interest in Oregon vineyards, these recent sales indicate otherwise.
CalPERS developed vineyards for resale and that is what they have done. The fact that they were purchased for the most part by large corporations says more about the investment required and the type of vineyards sold than the interest of out of state wineries in taking over the state’s wine industry.
I’m not saying that we will not see large corporations buying Oregon vineyards in the future, but I am suggesting that the declaration of a takeover of the Oregon wine industry might be a bit premature.
If Gallo buys Shea Vineyard, that’s when the industry will be shaken to its deep, non-irrigated roots. – Just kidding, folks!
Here’s a rundown of the vineyards and the new owners.
CalPERS Properties and Their New Owners
Zena Crown Vineyard – January 2013, purchased by Jackson Family Wines
Eola Amity AVA, 251 acres total, 83 vineyard acres. Planted in 2004.
Gran Moraine Vineyard – January 2013, purchased by Jackson Family Wines
Yamhill-Carlton AVA, 251 acres, 83 planted
Jackson Family Wines, owners of 35,000 acres of vineyard worldwide, now owns 1350 total acres in Oregon. In the last three years, Jackson Family Wines has purchased more than 14 properties across the world totaling 2,800 acres. The grapes from Jackson’s new vineyards are used to make La Crema’s Willamette Valley Pinot noir. First release of the wine, the 2012, is available now.
Goodrich Vineyard – March 2014, purchased by Elk Cove
Yamhill-Carlton AVA, 68 acres, 21 vineyard. Planting started in 2007.
21380 NW Goodrich Road, Yamhill
Goodrich Vineyard is located near Elk Cove’s original Estate Vineyard. The vineyard has produced several highly regarded vineyard designate wines since its planting in 2007.
Below, Goodrich Vineyard, image courtesy Elk Cove
Willakia Vineyard – March 2014, Ste. Michelle Estates
Eola-Amity AVA 298 acres , 119 vineyard. Planting started in 2000.
6457 SE Amity Road, Amity
The vineyard gets its name from the two predominant soils types on the property, Willakenzie and Nekia. Ste. Michelle purchased the vineyard to add acreage to its Oregon winery, Erath.
Below, Willakia Vineyard
Roserock Vineyard – December 2013, purchased by Domaine Drouhin
Eola Amity AVA, 279 acres total, 122 vineyard. Planting started in 2005.
3595, 4010, 4340 and Gibson Road NW, Salem
Near famed Seven Springs, this vineyard doubles Drouhin’s Oregon holdings. Drouhin’s estate vineyard is 124 acres of Pinot Noir and Chardonnay in the Dundee Hills AVA. The Roserock Vineyard is approximately 35 miles south of the estate.
Below, Roserock Vineyard
Yamhella Vineyard – May 2013, purchased by Precept Wine
Yamhill Carlton AVA, 374 acres total, 30 vineyard. Planted in 2007.
According to the purchaser, Precept will expand to 120 planted acres over five years.