05.26.2011  
 

Oregon Wines Moving Direct

Shipper continues expansion to accommodate growth

 
by Peter Mitham
 
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Oregon Wine Services’ new facility in Tualatin will be able to handle up to 1 million cases of wine.

 

 McMinnville, Ore. —The effect of stronger wine sales is rippling out across the wine industry, with beneficiaries such as Oregon Wine Services and Storage, which is expanding to keep pace with the rising momentum.

OWS opened its original location in McMinnville in 2001. It has expanded steadily over the past decade as it established itself and developed a full menu of services including storage, shipping, distribution and transportation. It built an addition to its McMinnville facility in 2008 and is also partner with winemaker Laurent Montalieu in NW Wine Co., a custom-crush facility that’s set to move from OWS’s premises in McMinnville to its own purpose-built winery in Dundee.

As wineries shifted to direct-to-consumer sales during the economic downturn, OWS co-owners Jeff Meader and founding partner John Niemeyer were planning for the future. Recognizing the increase in vineyard plantings in the Willamette Valley and increasing emphasis on direct-to-consumer sales, OWS recently bought a warehouse in Tualatin that boosts its storage capacity to 233,000 square-feet, enough to handle a million cases of wine.

“Willamette Valley’s grape yields were substantially down (in 2010), but due to the number of vines that have been planted over the preceding three or four years, we still feel we’ll see a growth in inventory,” Meader, OWS’s general manager, told Wines & Vines.

This is already coming to pass, even as the new vintage starts to flow into the McMinnville warehouse. “We’re seeing a lot of wine leaving our facility at this point. So the strength of our wineries gives us more reassurance that this is the right direction to go,” Meader said.

Situated just south of Portland and a mile from Interstate 5, the 62,000-square-foot facility in Tualatin boasts seven loading docks and three at-grade bays. The price tag was $3.3 million. A further $300,000 to $400,000 is being spent on insulation and security systems, including cameras and motion sensors. The temperature in the storage area, as at the McMinnville facility, will be maintained at 58°.

Meader said renovations in Tualatin should be complete by mid-June.
The addition also boosts the Oregon wine industry’s infrastructure, which Meader feels is “very strong right now.” Many wineries struggled to manage inventory when the economic downturn struck with force at the end of 2008, but the shake-out of the past 14 months has caused the industry to retrench. Prices have shifted, product has moved and wineries are taking to heart the lessons learned.

DtC sales make a big difference

The importance of direct-to-consumer sales may be one of the most important lessons, if the movement of wines through OWS’s facilities are indicative. “We’re seeing a good deal of wine starting to come in, but the outflow of wine—outbound wine, and in particular out-of-state and fulfilment direct-to-consumer—is increasing,” Meader said. “Direct-to-consumer fulfilment is up substantially this year, again. Restaurant and retail sales are picking up for Oregon, but direct-to-consumer is really picking up.”

The phenomenon has not gone unnoticed by OWS client Sokol Blosser Winery (65,000-cases) in Dundee. Sokol Blosser co-president Alex Sokol Blosser pegged the increase in sales through both channels at 8% to 10%. Better economic times have definitely helped, as well as efforts by the winery itself. “We are very happy with this growth, and have worked extremely hard to earn those sales,” Sokol Blosser said.

An opportunity for wineries to further hone their efforts in this regard will be coming up at the Southern Oregon Wine Marketing & Sales Conference in Central Point, Ore. on June 14. Organized by the Southern Oregon Wine Institute at Umpqua Community College, the conference will focus on all aspects of direct-to-consumer marketing, from marketing plans to online sales. For details, visit http://www.sowicellars.com/events.htm.

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