Recession? Wine does just fine

Wine lovers may be buying cheaper bottles of wine, but they are still buying — and sales are increasing for many Yakima Valley wineries

The effect of the recession on Yakima Valley vintners has been as varied as the wineries themselves.

Some are benefiting as consumers buy less expensive varieties. Others are satisfied with relatively flat sales given the scope of the recession. Still others have seen sales slump.

Last week's Spring Barrel Tasting events were really the first big test, said Marcus Miller, general manager of Prosser's Airfield Estates Winery.

"Would the people come? Would they spend money? I think the answer to both questions is yes."

His winery saw a 15 percent sales jump over last year's event, but commercial distribution is on pace to quadruple this year. It has sold more wine in the first three months this year than in all of 2008.

"Everyone that was drinking before the slowdown is still drinking," Miller said.

Clearly, not everyone is doing as well. But a snapshot of Yakima Valley wineries shows Miller isn't alone in reporting good news.

Some Yakima Valley winery owners say attendance and spending during Spring Barrel Tasting were at least on par with last year's event. The tastings, which represent the region's biggest wine weekend, took place April 25-26.

And given the nation's economic downturn, winemakers call that a victory.

"Flat is the new increase," said Martin Olsen, manager of Olsen Estates, another Prosser winery.

Meanwhile, wine sales are climbing for many wineries here as well as across the state and nation.

"The spending is still there," said Ryan Pennington, a spokesman for the Washington Wine Commission.

Last year was generally considered a good year for the industry. The nation drank nearly 3 gallons of wine per person in 2008, a record high, and total wine sales grew for the 15th straight year, according to the Wine Market Council, a national consumer research group.

Total domestic retail sales of Washington wine grew 11.8 percent by value and 8.9 percent by volume, outpacing California in both measurements, according to the Washington Wine Commission.

Nationwide, the fastest-growing price bracket by volume last year was bottles between $10 and $15 retail, giving credence to the notion that people are buying less expensive wine, but are still buying.

"We call that the sweet spot," said Keith Love, vice president of communications for Ste. Michelle Wine Estates. In total, 90 percent of that wine giant's bottles retail from $7 to $25.

Bad economic news may actually be helping wine sales in some places. That's what Shirley Puryear, owner of Bonair Winery, has noticed.

Puryear said her rural Zillah winery's sales for Spring Barrel Tasting weekend and during the first quarter of this year were about even with last year. She said many of her customers told her they were going to wine tasting events because they're tired of reading about foreclosures and tight credit.

She noticed the same thing shortly after the terrorist attacks of Sept. 11, 2001. The economy took a hit, but people went wine tasting to escape the news.

"It was just people out wanting to have fun," she said.

In fact, she posted a sign in her tasting room quoting one of her customers: "In these difficult economic times, wine is no longer a luxury. It's a necessity."

Across the country, wine vendors are even using the recession as a marketing tool.

Wine critics routinely showcase their "recession wine" of the week or day. Winemonger.com displayed the motto, "Because now more than ever, you need a drink" on one of its clearance sale pages. California winery Crushpad has been selling Bailout Cabernet, a bottle with a price that goes up and down with the Dow Jones average.

Jokes aside, winery owners also report sobering news and look at statistics with caution. Some California wineries have laid off employees, for example.

"You can definitely tell the industry has changed and that people's buying habits have changed," said Mike Birdlebough, general manager at Kestrel Vintners in Prosser.

Kestrel served about 2,000 people over Spring Barrel Tasting weekend, about 10 percent to 15 percent less than the year before. Sales roughly mirrored that.

"I would still call that a success," Birdlebough said.

Birdlebough says the industry is more varied and nuanced than one weekend or one winery's sales figures can explain.

For example, he's heard that bottles costing more than $20 aren't selling as much, but two of his featured $40 wines -- one cabernet, one syrah -- sold well during the weekend. That may be an example of scaling back for people accustomed to shopping for $100 bottles.

John and Louise Rauner, owner of Yakima River Winery near Prosser, call this a horrible year.

"I've never seen business so bad," John Rauner said.

Part of it is the economy. Most of the Rauners' wines cost more than $15 and they rely heavily on restaurant sales.

People are eating out less, so restaurants are closing or cutting back, according to the Washington Restaurant Association.

Having been in business for 32 years, the Rauners are industry pioneers. John Rauner helped establish Spring Barrel Tasting in 1980 and was one of the state's first wine commissioners.

Now 69, John Rauner worries the industry has reached a saturation point, with too many wineries regardless of the economy. He urges innovation instead of growth. His winery, in a rural area west of town, has lost its crowds to Vintner's Village, located not far from downtown Prosser and home to the newer Airfield and Olsen wineries.

Crowds at Spring Barrel Tasting were about the same as last year, but well below the heyday years of the 1990s and 1980s, when thousands visited, John Rauner said.

Those days may be gone forever.

"I don't expect it to ever go back to that," Louise Rauner said.

Randy Tucker, owner of Tucker Cellars in Sunnyside, said attendance was down about the same while tasting room sales were comparable to the year before. However, his wholesale distribution has dipped from 25 percent to 30 percent this year. He figured he was getting off easy.

"In the economy, I think we're doing pretty good," he said.