The Washington wine industry has grown rapidly in the last twelve years from several hundred wineries at the turn of the century to over 740 today. Are Washingtonians keeping up and drinking enough local wine?
Data on in-state purchases of Washington wine can be difficult to come by. However, at last week’s Washington Association of Wine Grape Growers annual conference, Danny Braeger, Vice President Group Client Director on the Beverage Alcohol Team at Nielsen, provided some insight.
According to Braeger, looking at Nielsen’s measured grocery channel – which I should note only accounts for a percentage of sales – 36% of Washington wine sales are within state. In comparison, neighboring Oregon purchases 55% of its wine. Some smaller producing states, such as Michigan, purchase a whopping 86% of their own wine. By comparison, Washington’s in-state consumption doesn’t seem particularly encouraging.
However, if it seems odd to think that so much Washington wine is actually being sold out of state, it’s because it is. As a wine producing region, Washington is notable for its numerous small producers, the vast majority of which make less than 5,000 cases annually. Indeed a frequent complaint from Washington wine lovers and interested parties is that specific wines are often very difficult to come by.
As one might expect, the state’s largest player – Ste. Michelle Wine Estates (SMWE), which owns Chateau Ste. Michelle, Columbia Crest, and a number of other brands – skews the data considerably. SMWE makes more wine than most of the rest of the wineries in the state combined. They also, of course, have heavy grocery store placement.
So what does Washington’s in-state consumption look like if we remove SMWE from the picture? Here things look considerably better, growing to 54% sold within the state. This is comparable to Oregon at 55%. California, which of course dominates production in the U.S., stands at 23%.
One question arises from these data – is it better to have more local sales or more sales throughout the country? Similarly, where should Washington as a region focus its marketing efforts? Should the focus be on trying to increase sales within the state or should it be to increase sales outside of the state?
I believe the answer has to be both. Much can be done to increase local wine consumption – particularly in the large Seattle market. However, it is critically important that the state raise its profile in other areas of the country and indeed around the world to continue to grow the industry.
While Washington has established itself as a significant wine region, many of the producers and wines are still not well known outside of the region. Continuing to grow the Washington brand further beyond the state’s borders to the rest of the country and indeed around the world is the next step in the state’s evolution as a wine region. But we still need to make sure we take care of our own backyard.
I try to include WA wine in my meals. A lower alcohol percentage (10.5%-12.5%) instead of the seemingly unavoidable 13.5-14.5% would help.
I'm not sure this statistic is all that relevant. Is a higher number better or worse? As you point out Michigan's consumption of its own wines is really high essentially meaning that no one else outside of the state is willing to give Michigan's wine a try. On the other hand California is low because they are such a mayor producer that they inevitably supply wine to the rest of the country and much of the world. I'm surprised though that they are still drinking 23% of their own wine. That's a lot!! They must not be drinking anyone else's. A more relevant statistic that would shine a light on domestic consumption would be the percentage of WA wine consumed in our State. I think last time I heard of a number it was in the low 20s. Meaning only 20% of wine consumed in Washington is from Washington. It would be even more interesting to gather regional data as I'm guessing the percentage is lower in urban centers (with more choices) and higher in rural areas (specially in wine country). I bet you CA numbers are much higher. I can also guarantee you that in Europe those percentages are closer to 90% (i.e 90% of wine consumed in France is from France). No data just speculating.
To make you feel better Sean, according to CellarTracker, 94% of the wine in my cellar is Washington wine. If you remove the Chateau Ste Michelle wines from the equation, it's still 92% Washington.
I also believe the answer has to be both within the state and outside the state sales. We should obviously push for more in-state sales, but at the same time, we should also work to become more recognized in the international wine community for the exceptional wines we produce. On a trip to NYC last year, I visited a wine shop and found that they had absolutely zero Washington wine. There must have been 300 different California wines and just as many French wines, but WA was completely ignored. I didn't bother saying anything to the wine shop owner, but I did leave empty handed that day. It may be a distribution thing, since many small wineries in Washington don't have access to the distribution networks around the country, and self distribution can be a very costly and daunting task.
This is totally based on my own observations, and not on any data. I don't really feel like Washington wine drinkers are not drinking enough Washington wine. My experience has been that a large percentage of Washington wine drinkers consume little else than Washington wine. I also think that it is to the state's benefit to have more exposure among consumers in other places. From a marketing perspective is is only going to increase the cache of Washington wine to have more options available outside of this area.
As far as how it should be marketed, I think that a mixture of tactics is appropriate. Given the number of wineries that are not set up for distribution outside of the state I believe that there definitely needs to be a sizable amount of marketing conducted within Washington, but efforts to increase the national exposure of our wine are important as well.
I should qualify my comment by saying that Washington residents can always do more to support the local wine industry, just saying that I haven't noticed a lack of Washington focus among the wine drinkers that I know.
As Sean says, "While Washington has established itself as a significant wine region, many of the producers and wines are still not well known outside of the region. Continuing to grow the Washington brand further beyond the state’s borders to the rest of the country and indeed around the world is the next step in the state’s evolution as a wine region." I could not agree more. That is one of the reasons the Walla Walla Valley Wine Alliance goes on the road to places like New York (where 21 Walla Walla wineries showed their wines to the trade and public), and coming up in less than 2 weeks in Portland OR as well as Seattle WA (where 60 wineries will be pouring at each event). Funny thing, ticket sales for the Portland event are great, while ticket sales for Taste Walla Walla in Seattle have been slow, right in our own back yard. Go figure,.
I am a self admitted homer in this regard as 90% of the wine I drink is from WA and I beleive if you live here you should drink WA wine. I have friends that have lived here their whole lives and go to Napa on a regular basis and do not even try most WA wines or consider going to Wallace Wallace, this drives me crazy. So there is plenty of work to be done from a marketing standpoint in our own state. Another area that I feel could be improved is the availability of glass pours of WA wine on most local restaurant wine lists. If you are a restaurant you should have a decent selection of WA glass pours, even if you are not based out of WA.
Javier, excellent point. I'll see if Nielsen has data available on total wine consumption versus percent local wine.
I agree that it's difficult to say what the 'right' number is. From a certain perspective, selling more wine in state is considerably less costly and therefore beneficial. At the same time, there's only so far that will take the industry, especially as the number of wineries continues to grow. It needs to be a balance.
We're trying to do our share Sean, but if you say so, we can increase from our current 2 bottles of WA wine per day to 4 or 5. Anything to help the cause.
Seriously, I think the answer is all of the above and let the market locally, regionally, nationally, hell internationally, decide. I have wino friends in Europe who might might love WA juice, but they'll likely never know since distribution of better stuff never makes it there, and if it does it is vastly overpriced compared to European wines available.
Likewise I want choice of WA/OR/CA/Old World when I visit a wine shop/aisle.
Trey, maybe Taste Walla Walla Portland is more supported than Taste Walla Walla Seattle because Seattle already knows many of the W2 producers and wines, those who have tasting rooms in Woodyville, and the same type of wines are avialable in Woodyville anyway, not to mention that statewide events that always include strong W2 representation. Portland is craving something besides Pinot maybe.
You hit the nail on the head. Washington wines can be very difficult to find because of their low production levels. If it were not for the efforts of the buyer at the company I work for, my tasting experience with these wines would barely go beyond those from SMWE. Even though we do get our hands on smaller producers (Fall Line, Soos Creek, and OS Winery to name a few) we don't get much of them and can not sustain a year-round availability, so its difficult to really spread the word and build momentum.
I'm afraid that as long as there are so many Washington wineries with such little production, that getting a more global awarness and increased consumption may be difficult. So maybe the answer is to focus efforts locally and try to make small splashes in key markets abroad.