The estimated farm gate value of Oregon wine grape production plunged 34%, or nearly $80 million, in 2020 to about $159 million, according to a new report, compiled by the University of Oregon’s Institute for Policy Research and Engagement (IPRE). It also showed these downward movements in 2020:
- Yield per acre decreased by 24% attributable to cooler late spring weather reducing cluster sizes and weights.
- Total grape production was down 29% as yields and September wildfires resulted in 30,000 fewer tons harvested than the prior year.
- Case sales were roughly flat, growing less than a percentage point of 0.7% to 4.69 million across all channels. Compare this to 2019, when case sales were 4.66 million, making a leap of 1 million cases over a two-year period from 3.60 million in 2017.
- Sales through direct-to-consumer (DtC) channels declined by 27% Some tasting room losses were offset by wine club and other channels.
The report also uncovered a handful of bright spots in a year marred by calamities. What was a brutal year on the production and supply side remained favorable for demand and sell-through. This is evident in Oregon’s volume growth of over 9% nationally in a very slow-growing national market, due in part to the highest level of national market penetration ever recorded for Oregon.
Additionally,
- With vintners looking toward the future, total planted acreage increased 6%, or by more than 2,100 acres from 37,399 to 39,531. Plantings expanded in every region of the state.
- Grape tonnage harvested increased in the Rogue Valley and Columbia River regions, by 5% and 4%, respectively, accounting for 28% of Oregon’s wine grape tonnage in 2020.
- Oregon wine sales to national distributors increased 3.5%.
- International sales increased 24%, with notable growth in all markets. Leading the export market for Oregon wine continues to be Canada, which accounted for 46% of export sales.
- Consumer takeaway during Oregon Wine Month improved 29% in Nielsen scanner-store data versus the comparable pre-COVID baseline in 2019, while the overall wine category grew just 9%.
- Also during that period, Oregon’s direct-to-consumer (DtC) shipments increased 31%, outpacing the wine category’s growth of 24%.
Wineries and Vineyards
Some 995 wineries now dot Oregon, an increase of 10% over 2019. In addition, the number of vineyards increased to 1,370 in 2020 from 1,297 in 2019, representing growth of 6%. Leading the charge are two areas of the report. First, the Columbia River region, which includes the Oregon side of two-state Columbia Gorge, Columbia Valley and Walla Walla Valley AVAs, as well as The Rocks District of Milton-Freewater, showing a 20% increase in wineries in 2020 over 2019. The Rogue Valley AVA, which includes the nested Applegate Valley AVA, now has 122 wineries, an uptick of 12%.
Varieties
The leading variety in Oregon remains Pinot noir, accounting for 59% of all planted acreage and 49% of wine grape production. The Willamette Valley in 2019 was responsible for 70% of the production of wine in the state, which dropped to 63% in 2020. Similarly, its harvest acreage slipped from 71% of the state’s harvest in 2019, down to 67% in 2020.
Production plummeted for Pinot noir statewide, except in the Rogue Valley and the Columbia River regions, which had increases of 20% and 76%, respectively. Pinot noir production in the Willamette Valley fell over 41%.
Some up-and-coming varieties thrived across the state in 2020. Albariño’s production went up almost 45% in the Willamette Valley, and acreage rose from 8 to 25 planted acres in the Rogue Valley. Tempranillo saw a slight uptick with 124 planted acres in the Umpqua Valley and a 13% hike in the Rogue Valley.
Exports
Exports of Oregon wine were particularly heightened with 115,434 cases sold internationally in 2019, compared to 143,541 sold in 2020. All countries measured, including Canada, Mexico, United Kingdom, Europe, Hong Kong, and Japan, had bumps in case sales. Canada had the largest increase of 23% at 65,459 cases of Oregon wine sold, reflecting the residual effects of pre-COVID promotions.
Sales
Sales of Oregon wine crept up less than a percentage point. However dollar-wise, sales increased almost 4% from $673.9 million statewide to $699.6 million. A key to Oregon’s continuing growth is the fact that its dollar sales are growing faster than its case volume. Longtime industry analyst Danny Brager saidt this helps explain why “Oregon is a growth standout,” and continues to be a profitable segment for retailers.
Brager noted that the average price per bottle of Oregon wine shipped directly to consumers continued its upward climb in 2020 at $41.88, second only to Napa Valley wines which average out to $59.92 per bottle.
As noted in previous research, the average bottle price of Oregon wines remains high in retail stores measured by Nielsen at $16.72 compared to $8.19 for the overall category.
Oregon Wine Board also tasked IPRE with a similar breakout report called Impacts to Oregon’s Wine Industry: Covid-19 and the 2020 Wildfires. Key call outs from this report showed that 62% of growers reported impacts from the 2020 wildfires, and the COVID-19 pandemic impacted about 35% of vineyards and 45% of wineries, posing a series of challenges for businesses. These include but aren’t limited to:
- The virus drove labor shortages as workers either got ill or avoided working altogether
- Increased costs due to supply constraints and having to invest in health and safety measures.
- Decreased revenue due to occupancy limitations (to comply with social distancing) and stay-at-home orders shuttering restaurants and tasting rooms.
- Quality Although the 2020 vintage will be characterized by fewer grapes crushed and lower production volumes, it is worth noting that the quality of the wine produced will be high and befitting of the quality consumers and wine critics alike have some to expect from Oregon. Winemakers will not release wines that won’t enhance the brand reputations they have been building for years and want to uphold.
“All winemakers are ultimately responsible for all picking decisions and resultant wines,” said Jesse Lange of Lange Estate. “The 2020 vintage white wines are shaping up to be some of the best we’ve ever released–opulent, round, and gregarious. And the red wines have deep concentration from a warm growing season and historically low-yielding vineyards.”
“Every winemaker on the west coast would probably agree that the 2020 vintage presented some conditions we’d rather not see again,” said Oregon Wine Board President Tom Danowski. “Nevertheless, the resiliency of Oregon growers and winemakers has made the vintage one to remember for the ways in which it called us to collaborate and cooperate, while upholding Oregon’s well-deserved market position rooted in exceptionally distinct, complex wines.”