In August, Burgundy négociant Maison Louis Jadot announced the purchase of the eight-hectare Resonance Vineyard in the Yamhill-Carlton sub-appellation of Oregon’s Willamette Valley. The small production is initially intended for the local US market primarily.
Though there are many factors which could have collaborated to make Oregon an interesting area of expansion for Jadot, CEO Pierre-Henry Gagey will at present only speak of the quality of the grapes, their infatuation with the site, and decision-making by intuition. Mentions have been made of Oregon’s “cooperative and collegial wine culture” as well as the lack of the restrictive regulations favoured in European wine regions. Gagey also suggested the need for a new project to keep the recently retired technical director of Jadot, Jacques Lardière, engaged. Maison Louis Jadot, though run by previous family owners Gagey, has been fully owned by the American Kobrand Corporation since 1985.
The price of the Jadot acquisition was not disclosed. “In 2005, prime, undeveloped vineyard-suited land was selling for $15,000 an acre in the Ribbon Ridge AVA (a sub-appellation of the Willamette Valley),” explains Peter Bouman, of Oregon Vineyard Property who facilitated the deal between Jadot and the previous family owners. “These prices peaked at $40,000 an acre at the top of the real estate bubble in 2008. Based on unfrequent sales during the following economic slump, some in the industry speculated that land values may have taken a 30% hit. Recent sales and one currently under way in the Ribbon Ridge are in excess of $35,000 an acre, very close to the benchmark highs that had previously been established,” says Bouman. The Resonance Vineyard was planted in 1981 and farmed biodynamically until 2010.
However, Jadot was not the only large producer to pick up Oregon land this summer. The adjacent property, the 460-acre Gran Moraine, was purchased by top US wine group Jackson Family Wines in August. Throughout the year, Jackson Family Wines has been purchasing vineyards and now own 1,350 acres in Oregon, making them one of the state’s top vineyard owners. The average size of an Oregon vineyard is still a mere 24 acres (9.7 ha), few are actively for sale, and those which are tend to be small.
Seattle-based wine group Precept Wine has also been picking up Oregon acreage over the summer. Most recently, Precept closed on the Yamhela Vineyard, also located in the Yamhill-Carlton AVA. The property is 374 acres, with only 30 acres currently planted. Precept has announced their plan to increase the acreage under vine to 120 acres within the next five years.
Race for land
These recent purchases are making some speak of an ‘Oregon gold rush’. “There is no question that there is a land rush for Oregon vineyard property! In nearly 20 years of brokering winery and vineyard properties, the closest that I remember to this volume of property sales activity was 2005, and 2013 will exceed those numbers by a factor of three or four,” says Bouman.
Many players are showing an interest to get in before prices pick up. A number of factors speak in favour of Oregon as an attractive investment rather than a temporary bubble.
For a European company such as Jadot, there is of course a clear advantage to having a local brand in the growing US market, where US wines are still strongly favoured over imports. Champagne Louis Roederer has reaped the benefits of this strategy with their Anderson Valley-based Roederer Estate brand; in Oregon, Burgundy négociant Maison Joseph Drouhin were trend-setters with their Domaine Drouhin, established in 1988. Pierre-Henry Gagey of Jadot did admit to being inspired by the success of Drouhin at making a well-regarded quality Pinot Noir in Oregon. The US consumer interest in Pinot Noir has been strong for years and is not showing any signs of weakening.
Rather, the first indications of a shift in preferences from the biggest, boldest, 15%-plus alcohol wines to somewhat lighter styles is playing in Oregon’s favour. Average prices and sales figures for Oregon wines on the US market have increased more than wine from other US states, including California, in the past few years. A general bullishness in domestic wine sales, particularly at somewhat higher price points, is also driving interest.
An additional factor for larger wine companies to look to Oregon is climate change. With uneven, and even disastrously low yields in Burgundy in recent years, a piece of land in Oregon might be insurance for a Burgundy-based négociant. For Napa and Sonoma, the risk of changing temperatures and water shortages makes it a smart move to get in on the Oregon market before prices rise. That this is one possible factor is confirmed by Sonoma-based Vintage Wine Estates, which recently closed on two properties in northern California. “Oregon is on our list,” says CEO Pat Roney. “The area continues to represent better property value than California, and Pinot Noir from Oregon is gaining increasing traction as an interesting style,” explains Roney.
Previously, the vast majority of Oregon winemaking has been done by residents and smaller operations. Recent purchases, though beneficial for the international reputation of Oregon wine, does raise questions of how the change in structure will affect the Oregon collegiality and collaboration across property lines. Bouman is not worried. “For better or worse, Oregon has definitely reached a tipping point in its development as a winegrowing area. I am hopeful that the continued diversification of international interests will make it a much more interesting and appealing place than it already is.”
In 2009, German winemaker Ernst Loosen closed on a 40-acre property in Chehalem Mountains with his US partner Jay Somers. His best advice for European winemakers is to listen to the locals, to be open to the new terroir and to dare to experiment. “In Europe it took us 2000 years to get it right. To come over and do things exactly the way it is done in the European terroir will not be the ideal way to get Oregon Pinot Noir to show its best. You have to take the traditions but be open to adapt, to make things better for this place.”