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Grape expectations: $9.5B Washington wine industry wants to put the crush on the gloom and doom

By Wendy Culverwell, Tri-City Herald
Published: February 25, 2024, 6:19am

Kennewick — Bart Fawbush has faced his share of challenges building a boutique winery known for its unusual varietals.

Bartholomew Winery began in leased quarters in West Seattle and later moved to Kennewick, where it was one of the first wineries to join the Columbia Gardens wine village near the cable bridge.

Moving presented challenges as did opening in a new location just beginning to draw attention from the wine-drinking public.

Bartholomew is too small to secure a contract with a national beverage distributor. It relies almost exclusively on direct-to-customer sales in its tasting room.

Challenges aside, Bartholomew Winery is a profitable business with a growing wine club, Fawbush said. It produces about 3,000 cases annually and occasionally bottles small batches for third parties.

Celebrate successes

Amid a global downturn in demand for wine, it is the kind of success Washington wine industry leaders want to highlight.

Industry leaders who gathered for the recent annual WineVit conference in Tri-Cities say the industry needs to change its messaging.

WineVit, organized by the Washington Winegrowers Association, was held earlier in February and convened winemakers, growers, vendors and others.

Amid talk about a global wine glut, declining demand, competition from craft beers, spirits, youthful indifference and the modern temperance movement, officials say Washington’s $9.5 billion wine industry needs shed the gloom and doom narrative and embrace successes as it fights for a larger share of a shrinking market.

“People hate the smell of desperation. That doesn’t sell wine,” said Adam Schulz, owner of Incredible Bulk Wine Co., in Walla Walla, who spoke during the state of the industry session.

Yes, Washington’s Ste. Michelle Wine Estates canceled 40% of its grape contracts in 2023 and halted production at its 14 Hands Winery in Prosser.

There are thousands of gallons of unsold bulk wine sloshing around in tanks, affecting future production.

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But, officials say, Washington needs to spend less time focused on the negative and more pursuing a greater share of the market.

A bottle on every table

Small wineries such as Bartholomew can thrive and build the Washington wine brand as it moves to put “a bottle of wine on every table” — the motto of the Washington Wine Association.

Fawbush supports the cheerier messaging, as long as it is backed up with a serious effort to market Washington wines.

His winery, is small, limber and debt free. It succeeds, he said, by being innovative and trying new things. His lineup includes varietals, such as Carmenere, Tannat and Primitivo. They are unusual in Washington and bring customers to his tasting room.

He eschews wine flights in favor of personal connections and educating customers about the wine they’re drinking.

“When a customer is at the door, you have to capture that business as best you can,” Fawbush said.

Wine is a critical product for Washington.

$9.5 billion industry

Wine America calculated the industry was worth $9.5 billion to Washington in 2022. It is one of the more important agricultural products produced in the state.

Wine supports 61,300 jobs, $4.1 billion in wages and generated $771 million in taxes, including $277 million for state and local governments.

Kristina Kelley, the new executive director of the Washington Wine Commission, understands the challenges but notes they’re not unique.

“I think the problems we have here in Washington are no different than any other wine region,” she said.

Negative headlines don’t help, she said.

“It is not, ‘Woe is Washington,” she said, referring to a headline in the Oct. 31, 2023 edition of Wine Spectator magazine that accompanied a column about the Ste. Michelle cutbacks.

Kelley anticipate several flat years for Washington wine, but is committed to promoting the state’s diverse wines. The bottle-on-every-table mission suits Washington’s diverse wines, grapes, styles and price ranges.

“There is an opportunity to be part of every occasion,” she said. “There is no need to go outside of Washington.”

State of imbalance

She acknowledged there will be pain ahead as the industry adjusts, as seen with the Ste. Michelle contract cuts. Schulz, of Incredible Bulk, referred to it as “a state of imbalance.”

There is a national oversupply of vineyards according to the influential 2024 State of the US Wine Industry Report, prepared by Rob McMillan, executive vice present and founder of the Silicon Valley Bank, a division of First Citizens Bank.

The report noted the under $12 category saw demand turn negative, while volumes for sales in higher price ranges remained positive.

McMillan predicts that premium wineries will succeed in 2024 but the outlook is less rosy for high production wineries.

“There are two solutions to declining wine demand,” the report said.

“We either work together to create a resonant message that positively influences consumption, or we use whatever means we have to increase efficiency in production, grape growing and marketing.”

Kelley, of the Washington Wine Commission, embraces both.

The state has a close-knit wine community known for its cooperative spirit. And it is eager to expand its message to reach customers.

“I do have a sense of optimism,” she said.