Washingtonians have an innate fear of the Californian invasion. While the state was long ago overrun by Golden Staters heading north in search of the good life, when it comes to the wine industry, things are just getting started.
Earlier this month California-based Trinchero Family Estates entered into an agreement to handle sales, marketing, and distribution for Charles & Charles. This winery is a joint project with K Vintners/Charles Smith winemaker Charles Smith and Charles Bieler. The Charles & Charles lineup currently includes a rosé (which landed a place in the Wine Spectator Top 100 list in 2012) and a red blend. Bieler and Smith produced 75,000 cases of their wines in 2012.
Trinchero is no stranger to wine lovers with over 30 brands, including Sutter Home, Bandit, and Ménage à Trois. They capture nearly 5% of U.S. wine market share. In an article in Shanken Daily News, Trinchero President and COO Bob Torkelson noted how the company took Ménage à Trois from 20,000 cases in 2004 to over 2.5 million cases today. Could the company be looking to blow up production of the Charles & Charles wines?
In a word, yes. The Washington brand is increasingly strong with consumers across the country and Trinchero – and others – are looking to get in on the action. This comes on the heels of E.&J Gallo and Co. purchasing Columbia Winery and Covey Run last year. Rumors abound of many more California-based companies looking to get involved in the Washington wine industry in various ways.
What does this mean for the Washington wine industry? It means that there are now a number of large (large) players operating in the state. These companies bring a considerable amount of capital and clout to work at economies of scale and place Washington wines on shelves around the country. And do not expect the influx of California companies to end here (can The Wine Group be far behind?).
While some natives might lament these changes to the industry, there is no turning back now. And truly, the Californian invasion is only a sign of Washington’s growing influence and regard as a wine region. Now if we could only teach them how to drive.
Having worked in finance for a good part of my career, I’ve seen first hand that capital goes where there is the greatest perceived return. From that perspective alone, it’s easy to see many more big houses entering Washington over the next few years. First, there’s the reality that the Ste. Michelle family of wineries are producing 100,000+ cases of multiple really good wines that sell for $20 or less. Second, the costs of entry are much lower. Third, there’s available land for new vineyards (water rights being a constraint). Fourth, those big players already have the national distribution horsepower (and experience) to roll out new brands. I just hope that the smaller wineries aren’t squeezed out as this evolves.