Washington wine grape growers feel recession

Washington wine grape growers and those who do business with them say they remain optimistic about growth prospects but admit they're starting to feel the pinch of the recession.

KENNEWICK, Wash. —
Washington wine grape growers and those who do business with them say they remain optimistic about growth prospects but admit they're starting to feel the pinch of the recession.

Some consumers are buying less expensive bottles of wine and wineries are working harder to contain costs, those attending the annual convention of the Washington Association of Wine Grape Growers said.

"We've definitely seen a slowdown in the last four months," said Marty Clubb, owner and managing winemaker for L'Ecole No. 41 near Walla Walla.

Consumers are buying bottles instead of cases, and restaurant wine sales seem to be lagging, Clubb said.

Still, retail sales are still holding on and Washington wines continue to be well-priced in the market, he added.

The state's growing wine industry is "perfectly positioned," said Keith Love, vice president for communications and corporate affairs for Ste. Michelle Wine Estates,

"I think everyone is seeing the same thing, which is a focus on value," Love said.

He said Ste. Michelle is proceeding with a five-year plan for planting more vineyards.

"You have to look down the road," he said. "You can't hit the panic button."

The company's Red Diamond brand is considered a barometer for sales and the $10-range wine has been doing well in nationwide sales, he said.

"We know there's going to be an impact ... but we think the state industry will ride it out," he said.

Restaurant sales are likely "going to be where you see the big drop off," Love said.

At Monterosso's in Richland, owner Aaron Burks said wine sales declined about 10 percent from 2007 to 2008 because consumers are eating out less, especially at more expensive restaurants.

"I would say that sales in general are more than a challenge in these economic times," Burks said.

Eric Denton, a Tri-Cities-based sales representative for Vehrs Inc., a wine distributing company in Spokane, said he's also noticed restaurants taking the biggest hit.

"I think restaurants are down just because people are wanting to stay at home more often and save their money," Denton said.

Retail buyers seem to be purchasing the same amount of wine going for lower prices, several at the conference said.

"It seems like people are gravitating toward more affordable wine," Denton said. "Instead of buying the $20 bottle they're buying the $15 bottle. People are taking a step down, it seems."

Robin Pollard, executive director of the Washington Wine Commission, added, "Rather than buying a $60 bottle, they'll buy three $20 bottles."

Adam Schulz of CorkWest in Kennewick said many producers are moving down a notch in quality in their cork purchases.

"A lot of people that were buying the top grade last year have moved down a grade," Schulz said.

When a higher end cork costs an extra nickel, that adds up, he said.

Others showing their wares said business is doing just fine.

Linda Sherman, manager of the Kent branch of Richards Packaging Inc., which manufactures and distributes glass and plastic packaging, said her end of the business was unaffected.

"People might not buy a new car, but they still have to eat and drink," Sherman said.