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Thursday, November 30, 2023
Nov. 30, 2023

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Washington’s largest winemaker cuts its grape buying by 40%

Wine industry has been challenged by glut of supply and aging customer base

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Washington’s oldest and largest winemaker is curbing its grape purchases and shifting fall crushing activities away from one of its most prominent labels.

Ste. Michelle Wine Estates, based in Woodinville, confirmed it canceled contracts for 40 percent of its grape buys during a recent meeting with its growers at the Walter Clore Wine Center in Prosser west of the Tri-Cities.

It also confirmed that production of 14 Hands wines is moving from its Prosser winery during the 2023 harvest.

“This harvest, our 14 Hands winemaking teams will be producing 14 Hands wines at our heritage Columbia Crest winery … as we look to make the best use of our winemaking facilities,” spokeswoman Lynda Eller told the Tri-City Herald.

“Our 14 Hands winery tasting room will remain open to welcome our customers and wine club members,” she added.

Ste. Michelle emphasized its commitment to 14 Hands, the horsey-themed label that has grown into a prominent consumer brand since it was established in 2005 to make wines for restaurants.

“We are very bullish about the future of 14 Hands Winery,” the company said. “As Washington’s second-largest premium wine brand, we are building upon our recent success with the launch of our 14 Hands Unicorn wines and the addition of new experiences for visitors to our tasting room in Prosser.”

Demand decreasing

The move comes as Ste. Michelle — owned since 2021 by Sycamore Partners, a New York private equity firm — rebalances its business to meet less demand from young adults, price pressures and oversupply.

Sycamore bought Ste. Michelle assets from Altria Group Inc., the tobacco giant, after Ste. Michelle wrote off millions in inventory losses amid a five-year downward trend attributed to a glut of wine and grapes. At the time, it produced an estimated 7.3 million cases annually.

The industry is still challenged by rising costs and dimming enthusiasm for wine among adults under age 60.

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