In 2022, Ste. Michelle Wine Estates (SMWE), the Pacific Northwest’s largest winery, listed its 118-acre flagship property in Woodinville for sale in whole or in part. While the company subsequently stated that, even if the property were sold, it would maintain a strong Woodinville presence, its stance on the property since has shifted.
“We’re not going anywhere,” says Ryan Pennington, vice president of communications and corporate affairs at SMWE.
SMWE’S listing of its Woodinville grounds, home to Chateau Ste. Michelle, came after a series of changes at the company. Among them was the purchase of SMWE by the New York-based private equity group Sycamore in 2021 for a reported $1.3B. Ste. Michelle also moved its white wine production to eastern Washington, resulting in large buildings in Woodinville zoned for production that are no longer being used. For a company looking to raise capital to reinvest into the brand, that made little sense.
Still, Chateau Ste. Michelle’s sprawling Woodinville property is as iconic as any winery in the Pacific Northwest. Ste. Michelle was the first winery in Woodinville, which is now home to 130 wineries and tasting rooms. An image of the chateau itself is emblazoned across many of the winery’s bottles. Additionally, hundreds of thousands of people visit the winery’s tasting room every year. Ste. Michelle leaving the property, even if it were to a new location in the town, would have been a seismic shift in the Washington wine industry.
Shortly after the property was listed for sale, then-CEO David Dearie explained the winery’s approach by saying, “We’re not in any need to move anywhere. We’re just looking to see what have we got and what can it be worth, and the intent is for us to invest behind our brand building efforts.”
Dearie resigned in October of last year. Sean Conway was recently hired as the company’s new CEO. Whether due to a change in leadership, a changing economy, or other considerations, it’s clear the winery’s thinking has shifted.
“We’re looking at every opportunity we can to actually improve our presence on the current site and have a more impressive experience there,” Pennington says. “We’re looking at every potential means to get us to that end.”
However, SMWE surely does need to find a way to get value out of the parts of the property it is no longer using. That could potentially take a variety of forms, such as Ste. Michelle selling the property and leasing parts of it back, selling off part of the property, or leasing part of the property. There are surely other possibilities as well. That was always the case, but it’s clear that priorities have shifted.
“We’re really focused on what can we do to the property that’s more consumer-facing,” Pennington says.
This year at the very least, the Chateau is leaning into its spacious grounds. The winery’s summer concert series returns later this month. The Chateau will host a record-setting 39 concerts this season. Additionally, Ste. Michelle has partnered with Live Nation to become the entertainment company’s first-ever national wine sponsor. Live Nation will also have a greater role managing the Chateau’s concerts.
SMWE is by far the state’s largest winery. Over the last five-plus decades, the entire Washington wine industry has felt the company’s gravitational pull. It appears that center of gravity will continue to be Ste. Michelle’s Woodinville property going forward.