What the shuttering of Canvasback means for the state’s wine industry
The news earlier this month that the Duckhorn Portfolio would be shuttering its Washington-focused Canvasback brand (as well as several brands in California) was a gut punch to the state’s industry. Duckhorn, an internationally known company, had pushed a sizable amount of chips into the middle of the table on Canvasback. Now, just over a decade after the company launched the brand, Canvasback is going away.
This hits at a particularly sensitive pain point for the state. Washington wine’s single biggest problem is that most of its wines are produced in microscopic quantities and have little to no national presence. This has created a chicken-and-egg problem. The state can’t grow awareness without more people trying the wines, but people can’t try the wines because production is so small.
This is where large wine companies, like Duckhorn, offered the potential to play a pivotal role. They have built-in reach, ability to grow national brands, and can get wines into people’s hands.
Unfortunately, to date, there have been few success stories despite a number of notable investments. For example, Gallo purchased Columbia and Covey Run in 2012. A year later, Duckhorn announced that it would be producing a Red Mountain Cabernet Sauvignon. Constellation purchased Charles Smith Wines in 2016. Vintage Wine Estates purchased Tamarack in 2018 and Owen Roe in 2019.
None of them have worked out. Gallo sold Columbia and Hogue Cellars to Seattle-based Ackley Brands in 2024. Constellation sold Charles Smith Wines to The Wine Group in 2022, which subsequently sold the brand to Ackley in 2024. Vintage Wine Estates went bankrupt, leading to an asset sell-off where the original owners of Owen Roe purchased the brand back. Now Duckhorn is shuttering Canvasback.
Why haven’t these brands been more successful in the hands of these wine giants? It has nothing to do with Washington wine per se.
In every case, the Washington wineries have been tiny parts of these companies’ large portfolios. Even in the case of Columbia and Hogue, which made north of 100,000 cases annually, it was a tiny drop of wine in Gallo’s giant bucket.
The global wine industry is in the midst of tectonic changes. When companies experience large changes and potential existential threats, they worry about saving the head and trunk rather than fingers and toes. The Washington brands have never been sizable enough to focus on.
What does all this mean for Washington wine? It means that a cavalry of outside investors is not coming to help grow the awareness of Washington wine. Not right now anyway.
Even before the wine industry started to experience serious headwinds, few large wine companies have traditionally been interested in long-term brand building for a region. Most of these businesses don’t just want surefire success, they want surefire, near-term success.
This is part of what made the announcement that Duckhorn is shuttering Canvasback so stark. At one point, Duckhorn was interested in doing the hard work of regional brand building. Alas, the wine industry shifted, ownership changed, and priorities evolved.
So, what’s next? For Washington, at least in the near-term, the best growth opportunities for raising the state’s national profile need to come from within.
They need to come from producers like Mark Ryan continuing to grow its portfolio, which now exceeds 100,000 cases annually. They need to come from companies like DeLille growing its D2 production and launching the Métier label. A handful or two of other Washington wineries are also focused on substantially growing their national presence and therefore the state’s.
Why are these companies more likely to be successful than large companies based outside of Washington? Because these companies are 100% committed to the success of these brands in a way that would never be the case for a California-based winery whose revenues are driven almost completely by other brands.
Don’t get me wrong. There will surely continue to be outside investment in Washington, as there should be. I also remain hopeful for projects like Jackson Family’s Jett brand. Why? Because Jackson Family has traditionally taken the long view in its investments. That is the type of commitment required for success in Washington, not a short-term focus or staring at Excel spreadsheets.
Bottom line, if Washington wants to extend its reach in the near or even mid-term, and the state truly must do so if it is to continue to thrive as a wine region, local wineries are going to have to do most of the heavy lifting themselves.
Once the ball finally gets to the other side of the hill – and it will – plenty of outside wineries will be happy to come in and reap the benefits. Until that time, the state is on its own.
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Excellent analysis. Jackson Family Estates investment is potentially promising. It will be interesting to see if Jett’s price points move the needle for WA wines nationally. Would love to know what percentage of wine drinkers spend $80+ for a bottle of wine. Will be interested to see how things evolve with them and in general.
We can add Foley Family Wines to the list above with their closure of Three Rivers in Walla Walla.
The three tier system is broken and has been for a long time. It’s hard to get all those dominoes to fall from the winery to a hand sell at a restaurant or bottle shop somewhere else in the country. Quality press from National magazines is far and few between, and Washington State is not the quality to price ratio darlings we used to be. It all adds up to a real challenge.
Jamie, agreed on all points. Worse? The challenge is just going to continue to get greater.
Great article, Sean, and an interesting perspective. I posed on a wine discussion board that, even as a WA wine lover and collector, I’d never had a single bottle of Canvasback. That decision was mostly driven by my (misguided?) desire to keep massive brands out of our beloved Washington. I wanted the best grapes to go to the best people at the best wineries, and that frequently (for me) meant small and local. I suppose that view should be more along the lines of, “A rising tide floats all boats.” Did most small wineries and winemakers celebrate Duckhorn’s entree into the state? I would imagine growers did, largely.
Brandon, I think, speaking generally, that the reception that outside wineries have received has been commensurate with their approach entering the state. Some have come in with an air of superiority and with sharp elbows. (Not the way to go.) Others, such as Duckhorn, have come in excited to learn the area, meet people, and become part of the fabric of the community.
I think there’s always a desire locally to protect what is special about the area while also creating a favorable business climate for wineries to sustain themselves. In any business, that is difficult to balance. For this reason, sometimes wineries from outside the state can be viewed with some hostility, by consumers or people in the industry. There is a fear of losing the area’s authenticity to “big brands.”
I welcome outside investment when it is done with intention, purpose, and sincerity. We all need all the help we can get just to keep what we have right now let alone to grow awareness. Personally, I don’t believe focusing largely on local sales and tourism, as many wineries are at present, is sustainable in even the short term. We have to keep growing the pool of consumers.