StateWays - March/April 2016

StateWays is the only magazine exclusively covering the control state system within the beverage alcohol industry, with annual updates from liquor control commissions and alcohol control boards and yearly fiscal reporting from control jurisdictions

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39 StateWays n n March/April 2016 NORTHWEST WINE DIVERSITY A s consumers continue to increase their per-bottle spend, California's fine wine rivals to the north are nibbling away at the leader's market share. The Golden State's dominance of U.S. production slipped to a new low in 2014, according to the Wine Institute, punctuating a decade-long decline from 90% to 85%. California's wine business is healthy and growing steadily, of course. Other states are simply growing faster, particularly in the quality-focused Pacific Northwest. Washington and Oregon couldn't be more different from a winemaking perspec- tive. Eastern Washington's high desert vineyards enjoy a warm, dry climate not un- like that found in Spain or Argentina. Western Oregon's vineyards are clustered in cooler coastal valleys kissed by fog and ocean breezes, in conditions more akin to those of northern France or New Zealand. In early days, Washington earned its wine stripes by delivering delicious entry-level Merlot and Riesling, while Oregon proved its mettle on the fine-dining circuit with luxury-priced Pinot Noir. But what these northwest wine regions share, along with up and coming neighbors in Idaho and British Columbia, is a combination of stylistic diversity, quality potential and progres- sive value that is resonating with consumers. WASHINGTON STATE Washington, the country's second-largest wine producer, has seen its wine harvest double in size in the last decade, and all indicators point to growth. Brett Scallan, who serves as vice president of marketing for the state's largest wine company Ste. Michelle Wine Estates, sums up the hopeful outlook: "Washington has outperformed the total wine category the past 10 years running, and grew at three times that rate in 2015," he says. "Washington appeals to an affluent, well-educated consumer demographic, while consistently surpass- ing other production areas in terms of ac- claim and value." One obvious reason for Washington's wine boom is its low land and labor costs. Dollars simply go further in the high desert of Washington's interior than in coastal California, whether you're a vint- ner or a consumer. "Economically-speaking, Washington is accessible," says Chris Sparkman, who currently serves as chairman of the Wash- ington State Wine Commission. "Bay area real estate prices and cost of living are sky high, but a young family like mine can still afford to enter the Washington wine game." Sparkman was a former sommelier when he and his wife founded Sparkman Cellars to focus on hand-crafted artisan wines in 2004, only to be named among Wine & Spirits' Top 100 Wineries in the World in 2011. Keeping production costs low keeps prices low whether you're aiming for quantity or quality, and Washington excels on both fronts. The House Wine brand founded by Charles Smith in 2004 was already successful when it was acquired by Precept Wine in 2010. But the label's growth since launching a $19.99 3L box format in 2013 has been explosive. The new package increased the brand's total sales by 123% in its first full year, and represented 59% of total case depletions. Building on the 3L's popularity, the brand has cleverly leveraged the brand's iconic label style. "Our CEO Andrew Browne retooled the House Box package in a variety of color sets," says Precept communications director Heidi Wither- spoon, "with seasonality and hyper-lo- cality in mind." These boxes have proven popular for holiday-themed end caps at Halloween and Christmas. And although all color schemes are available to any market for any occasion, with no athletic affiliations whatsoever, sports fans love them for tailgating. Wine shoppers have long known Washington over-delivers in value tiers, BY MARNIE OLD Abacela's estate vineyard planted to Tempranillo

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