Southern Oregon wine continues upward trend

Southern Oregon's distinct viticultural areas have mirrored the growth of the state's nearly $3 billion industry.

When Oregon wine production soared to new heights in 2011, producing 2.2 million cases for sale, the Rogue, Applegate Valley and Umpqua regions all saw their fortunes rise as well.

Annual wine census figures produced by Southern Oregon University's Southern Oregon Research Center for the Oregon Wine Board and released Wednesday revealed several measures of rapid growth.

Between 2010 and 2011 Southern Oregon saw a 24 percent growth in wineries, from 71 to 88. Wineries crushing their own grapes increased 12 percent from 49 to 55.

Following a statewide trend in tonnage during 2011, the three southern regions saw a 77 percent growth to 5,460 tons from 3,082 in 2010 and those grapes turned into nearly 1.6 million gallons of wine, a 20 percent increase from just more than 1.3 million the previous year.

"With the increased production from newly planted vineyards, there has obviously been a challenge to expand our marketplace beyond the Southern Oregon region and throughout the entire state," said Michael Donovan of RoxyAnn Winery and chairman of the Oregon Wine Board.

"At the same time, the challenge presents great opportunity. Not only is the industry growing, but we're growing in the right way with a laser focus on quality and without sacrificing our artisan winemaking roots."

The 50-year-old industry surpassed 2 million cases, including bulk wine, for the first time.

"The last couple of years have provided just excellent news for the Oregon wine industry," Donovan said. "Along with our economic impact study of 2010, showing that our industry has risen from $1.4 billion to $2.7 billion, this is what we want to see. We've had a significant impact during the recession, being a sector of agriculture that's continuing to grow."

Oregon's 463 wineries recorded 9 percent growth in volume and sales revenue, making 2011 the biggest year in the industry's 50-year history. The 2011 results benefited from a record harvest of 42,033 tons of grapes.

"The overall production was higher than we were expecting, but it was not unusual, considering grape production was up last year, that cases would be up," said Michelle Kaufmann, a spokeswoman for the Oregon Wine Board. "We've been on a continual upward trajectory with a couple of down moments."

Nationally, wine sales grew at a 2 percent rate, according to Nielsen Co. research. Oregon's production was significantly higher than the 5.6 percent growth posted by wineries in California, the nation's largest wine-producing state.

While the census showed Oregon wine exports were flat in 2011, there was strong growth in Asian markets. Sales to Japan and other Asian countries represented 36 percent of total exports, up from 28 percent in 2010. Sales in Japan, one of OWB's targeted export markets, grew 11 percent.

"We're clearly finding new markets," Donovan said. "The issue for Southern Oregon wineries has always been that they have not stepped up to take advantage of even statewide distribution as well as national distribution or export. Wineries making above 8,000 to 10,000 cases are not distributed much more out of state."

Custom crush production rose 65 percent from the previous year, reinforcing the diversity and accessibility of the industry to new wineries. Linda Donovan, winemaker at 3-year-old Pallet Wine Co. in Medford, said her business experienced similar rapid growth in 2011.

During the year, sales directly to consumers accounted for 21 percent of total sales, while sales from tasting rooms grew 5 percent and made up 14 percent of overall revenue.

Statewide, the number of wineries grew by 10 percent over the previous year. There were two dozen wineries a decade ago in Southern Oregon, Donovan said, and half the present 88 just five years ago.

"When you look at sales data, the amount of Oregon wine consumed within our state by our own citizens, people are starting to step up," he said. "When you talk about eating local, basically wine is an agricultural product that just happens to be in a bottle. There is a direct relationship in supporting our state's agricultural heritage."

Reach Mail Tribune reporter Greg Stiles at 541-776-4463 or email

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