It’s been three months since I’ve posted here. That’s a factor of fatigue, I don’t mind acknowledging. I’ve still been writing my weekly wine columns for The Washington Post, of course, and will link to those here in future in case you missed them. But that’s not why I’m back.
Five years ago, when Jeff Siegel and I created Drink Local Wine, we complained that the mainstream media (or “winestream media”) ignored U.S. wine that wasn’t produced in California, Oregon or Washington. There were structural reasons for that, as well as cultural bias against emerging wine states. The situation has changed dramatically. Virginia and Colorado are often included in travel articles touting visits to “wine country” (a development foreshadowed here), and the growth of the U.S. wine industry outside of the West Coast has been chronicled by none other than Jancis Robinson and Linda Murphy in their excellent book, American Wine.
And now regional wine has made the New York Times. And the funny papers. But I get ahead of myself.
First, the Times. If you haven’t seen the wonderful article from July 7, here it is. It’s called “Virginia Wines: In the Old Dominion, a New Terroir,” but the article’s significance goes beyond its focus on Virginia. This was a page-1 spread on the Sunday Business section that continued over two full pages inside. A major article, thoroughly researched and beautifully written by Adrienne Carter. She followed Luca Paschina of Barboursville Vineyards as he tried to sell his wines to retailers and restaurateurs in New York. The article isn’t just about Barboursville – Carter uses Paschina to represent Virginia, and Virginia to represent the “other 47.” She chronicles the difficulty regional winemakers face in getting their wines onto crowded retail shelves and restaurant lists and the grunt work and dedication required to make the sale. Carter has written a business story, not a wine story, and she has treated her subject with respect and not the usual condescension for local wines. The article was accompanied by a graphic demonstrating the growth of the wine industry throughout the United States.
And then there’s the funny papers. In today’s “Barney and Clyde” strip, penned by Washington Post humorist Gene Weingarten, his son Dan Weingarten, and David Clark, Virginia sparkling wine gets a mention. They could have said “California champagne,” or Korbel, or even André, for goodness’ sake. But they didn’t. We can argue about the implications of the joke, but this much is clear: The idea of Virginia wine is engrained enough that these writers felt they could refer to it without explanation.
I’ll toast to that.
Dave McIntyre's WineLine 
The map of the expansion of American vineyards was really impressive. And Luca has done an amazing job in keeping Virginia in the spotlight. Thanks for pointing out this excellent article in the NYT!
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Dave,
I’m sorry to inform you that the “Mission Accomplished” is not if fact anywhere near accomplished despite the great articles in the NYT, if we are to look at the Maryland wine scene. As you know having received my unedited blog on “How to Approach Maryland Wines” a portion of which was recently published by the MD Wineries Association, I express some grave concerns about our local wine scene after giving you and Jeff well-deserved credit for starting the DLW movement. I pointed out the general lack of profitability of local wineries as being an impediment to the growth of local wines as well as their production being far more expensive than those costs typically faced by vintners in the big three states, especially California.
Just how bad is the situation in Maryland? I spent two hours on the phone with a MD winery owner yesterday whose family has come to the conclusion after preparing detailed financial plans for 2013 that there is no means by which the winery can actually make a profit and should consider their exit from the business by selling their producing vineyards and winery to someone else, I suppose on the theory that there’s always a bigger fool out there who has fallen for the romance in the wine business. We speculated during the conversation that there likely are fewer than five wineries in Maryland that are profitable; that’s 8 percent of wineries open if the count today is 62 statewide.
How to solve this problem for local wineries? Unfortunately, there is no simple answer. Greater top line sales, most assuredly, but what is the true average breakeven point for a typical local winery in Maryland? Well that depends on investment costs, the cost of money and any series of factors including the cost of producing a specific bottle of wine. I doubt anyone can accurately answer that question today.
Thus, you have your work cut out for you as I suspect Jeff Siegel has more or less withdrawn from the DLW movement, possibly to earn a living to feed his family. Oh my, the thankless task of being an advocate of Drink Local!
Les Hubbard
Les,
We haven’t met (I don’t think) and I tried to address that issue in a blog post of my own. Being a winery owner, I think there IS a simple answer — the regional wineries need to plant more, grow more and sell more in order to be competitive. The simple fact is, in order for us to price our wines so we hit the right price after the distributor applies his/her markup, we have to get our prices WAY down, and the only to do that is to increase production.
What is NOT simple is getting the attention of a distributor, then selling the wine. That is an entirely different challenge.
http://blog.annefieldvineyards.com/2013/07/17/the-grey-lady-takes-notice-of-the-virginia-wine-business/
Mr. Ballard,
You’re correct as to the solution to reduce costs will be more grapes, especially vitus vinifera varieties that can produce premium wines. I don’t know about your area of Virginia but your vinifera plantings indicate you have experience with premium grape varieties. In Maryland an inputted cost to grow these varieties would be between $4,000 and $5,000 per ton, certainly not competitive with typical California costs per ton for similar varieties outside premium areas such as Napa and Sonoma top level vineyards.
Here in Maryland, an inability to reduce costs forces boutique wineries to self distribute and pursue direct to consumer sales for a larger portion of their sales as well as providing such other revenue streams from their properties as special events or weddings. In my view Virginia has historically done a better job of encouraging planting more acreage in wine grapes than Maryland, i.e., it requires vineyard and winery friendly legislation to engender investments in further plantings and winery developments including extensive state-funded research. Virginia recognized the economic development benefits of doing so long before Maryland.
Les
I would have loved to have provided cost data to compare the price per ton with Maryland, but unfortunately that particular file is at the farm. The work week is spent at my “day job” in Washington, DC, which in itself is typical, in my experience — virtually all of the winery owners we know well have other jobs to support their wine businesses. I’m anxious to have a look at that figure, because I don’t usually look at the cost per ton to produce, but focus on the ultimate cost per bottle to arrive at our pricing.
Another factor that makes us slightly different is we use the winemaking services of Virginia Wineworks, so we don’t have the expense of the winery building, financing equipment, salary for a winemaker and staff, etc. Certainly we pay for these things in the fee to Wineworks, but it is much less of an investment than if we had our own facility. It also makes it an easier decision should we choose to get out of the wine business in the future. Our own plan is to give the winemaking (and wine selling) 10 years to become profitable, and if not, we will just grow the fruit and sell it, and not be stuck with a purpose-built building that no other farmer would want.
We take comfort in the tax treatment of the loss, but it sure would be nice to not have to think in those terms. And like Maryland, we have to focus on direct to consumer sales, because distribution is such a tough sell. We are working with a distributor who tells us that we need to get our prices down (which we know), and we had one instance where a shop in one territory suggested that we participate in a festival in their area so their customers would get to know us. Only then would they think about carrying our wine (we had an opening in the calendar and agreed to do it). Its a tough sell, no matter what the approach, and extremely frustrating. And this is the local market — I can’t imagine dealing with wine shops outside of Virginia. But maybe its the same everywhere …
Meanwhile, we are planting another three acres in the spring — Cabernet Sauvignon, Viognier and Petit Verdot. Our Viognier is always well received, as is the Cabernet Sauvignon, but in years past we’ve lost so much to animals we need to plant more just to produce enough for it to be worthwhile.
Stephen
Stephen,
You raise many critical issues in your response. Like most of the winery owners I know, you depend on an another income to feed your family. I’m not familiar with Wineworks but similar services are available in Maryland for various tasks. I started in the late 1970s to say that consider it would take ten years from planting your first vine until possibly breaking even. I suspect today the time may be longer. I told a winery owner the other day based on my wife’s observation that festivals are promotional events and one could not be expected to make a decent profit from participating, and yes, she has worked over ten festivals for various wineries in Maryland.
Since I work for a retailer part time I’ve gotten to know many distributor management representatives and their sales persons. All are interested in one thing, volume sales your winery can produce for them, hence, a tough sale for a boutique winery. But don’t be discouraged, if you create a cult following for your winery’s wines the distributors will want to carry your line. At some point making quality wine and finding ways to encourage distribution pay off, so please don’t become discouraged.
Les
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Only one wine was produced in the Finger Lakes region during my youth there, and it was a sickly sweet Jewish ceremonial product. Now some forty-five wineries flourish, in addition to several others in the Hudson River valley and on Long Island, and most are doing well. Many ship to individual customers, offering discounts to those who purchase a case or more every year. So I routinely receive a case or two of an excellent white — not the best available from that winery, but very good for every day use and perhaps its best bargain. No doubt the climate of the lakes region is a big help, but I’ll bet the growers there could provide some beneficial advice to growers in Virginia and Maryland. Going from zero to forty-five good wineries during my lifetime would suggest a learning curve that might benefit mid-Atlantic producers.
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I have just returned from visiting relatives in my original home in western New York State, and must update the datum I reported previously. Officially, New York State now has 165 wineries, they appear to be flourishing, and prices are less than or highly competitive with those of Virginia and Maryland. For example, I bought a tasty red from Bully Hill Vineyards alongside Lake Keuka for $12.50; and this can be replicated throughout the Finger Lakes region. I regularly get cases of a nice dry riesling from another of them for slightly over $11 per bottle. It’s not only that I am a cheapskate, I am also living on a modest income that requires strict budgetary control. But none of the wineries I have seen and visited up there are suffering the cost problems described in the Virginia-Maryland area. That 165 figure is 164 more than existed during my early years in NYS. Someone should find out what they are doing right. While I would like to purchase locally, NYS wineries make that cost-ineffective.
To Dave McIntyre: Yes! Please do replicate in this blog your weekly Washington Post articles and wine recommendations. I have requested this a couple of times, because I rarely see the Wednesday issue of the WP — and I would really like to pursue some of the wines that you rate as 2 or 3 star.
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