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Economics, not climate change, pushing Calf. wineries to PNW

An industry insider debunks the theory that California wineries are moving to the Northwest as a hedge against climate change.

By Eric Mortenson

Capital Press

Published on June 18, 2014 9:01AM

Speculation creeps into the conversation every time a large California winery snaps up a smaller operation and sets up shop in Oregon or Washington: The big outfits figure climate change eventually will make California too hot and dry to grow premium wine grapes, so they are moving to better conditions in the Pacific Northwest.

Not quite, says industry expert Rob McMillan, head of the Premium Wine Division for Silicon Valley Bank in St. Helena, Calif.

“It’s not climate change nor a hedge against drought,” McMillan said in an email response. “California has been drought prone for a very long time and like the rain in Oregon, the lack of rain in California is something that growers learn to deal with.

“While the majority seem to believe we are in the midst of a man-made alteration of climate, and this business is far more sensitive to sustainable and eco-friendy agriculture, it’s about economics,” McMillan continued. “The market is demanding wine and certain price points, and suitable land in Oregon and Washington is available. In Napa there is little plantable land and regulations are making it more difficult to build wineries with tasting and visitation privileges. In Sonoma too, regulations make it increasingly difficult. In both counties, the price of land compounded with regulations, along with proven world-class viticulture in the PNW make Oregon and Washington a no-brainer for existing brands needing supply.”

McMillan noted that well-known California wineries Duckhorn and Jackson Family Wines, makers of the Kendall-Jackson brand, bought vineyards in Walla Walla, Wash., and Yamhill, Ore., respectively, in 2013.

“The sales of wineries and vineyards in those states is an outflow from those economics,” McMillan said. “While Oregon in particular has historically been fiercely independent, not looking for ‘carpet-baggers’ coming into the business, I personally believe larger wine operations like Duckhorn and KJ making great wine and selling through their distribution will prove very positive for both states in the next 10 years.”


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