Precept Now Washington's No. 2 Wine Producer

Seattle-based company demonstrates faith in Northwest wine industry

Walla Walla, Wash.—A new future has dawned for Canoe Ridge Vineyards, seven months afterDiageo PLCshuttered the winery’s Walla Walla tasting room and the visitor center at Wapato’s Sagelands Vineyards (see “Northwest Wineries Retrench”).

Seattle-based Precept Wine Brands, which cut production at its Alder Ridge facility last year to focus on winemaking at its wineries in Prosser and Walla Walla, has purchased the two former Diageo properties for an undisclosed sum.

Plans include relaunching Canoe Ridge’s tasting room this spring and leveraging Sagelands’ position as a top-quality brand in the $10 to $12 per bottle category.

“There’s been a lot of strengths from our portfolio and some of our neighboring wineries portfolios at the under $15 price-point, which is where the majority of our focus lies,”Alex Evans, vice president of marketing with Precept Brands, toldWines & Vines. (Precept founder and CEOAndrew Brownewas unavailable for comment this morning).

The ongoing emergence of Washington state on the national and international stage makes it an area with lots of room for growth, Evans said, with significant market potential for the wines of Sagelands and Canoe Ridge.

“It’s still a relatively emerging, new region in the majority of the rest of the country as well as internationally,” she said. “We see a lot of opportunity to grow market share for Washington and expand with more great wines that we can offer for under $20 (per bottle).”

Evans said distribution should not be affected by the sale, since wholesaler Odom-Southern Holdings distributes both Diageo and Precept products.

The acquisition also gives Precept the 153-acre Canoe Ridge vineyard in the Horse Heaven Hills AVA, boosting Precept’s acreage in Washington to approximately 3,000 acres. Winemakers LLC, which already manages vineyards for Precept, will manage the Canoe Ridge property.

With production of 85,000 cases at Sagelands and 25,000 cases at Canoe Ridge, Precept will produce a total of 900,000 cases of wine this year at its properties across the Northwest.Bill Murray, winemaker at Idaho’s 20,000-caseSawtooth Wineryin Nampa, will become winemaker for Canoe Ridge in addition to overseeing production at Sawtooth.

The acquisition is the second major deal for Precept in as many years.

A year ago, in January 2010, it acquired Corus Estates and Vineyards (including Alder Ridge and Sawtooth wineries), and currently boasts more than a dozen core brands in Washington, Idaho and Oregon. It also produces dozens of regional and private label wines, making it the second-largest vintner in the Pacific Northwest, after 1.5 million-caseSte. Michelle Wine Estates.