Chateau Ste. Michelle closes 14 Hands and Columbia Crest tasting rooms, wine clubs

[ibglowin]

Wow, if you didn't already know there is a glut of wine and grapes in the US, this is a huge wake up call!

https://www.northwestwinereport.com/2024/11/14-hands-and-columbia-crest-tasting-rooms-close.html

If you recall SMWE was purchased back in 2021 by a New York based private equity firm for $1.3B and now they are doing what they do best. Maximizing shareholder profits.....

https://www.northwestwinereport.com...inville-property-were-not-going-anywhere.html

 

[Garagista]

Wow, if you didn't already know there is a glut of wine and grapes in the US, this is a huge wake up call!

https://www.northwestwinereport.com/2024/11/14-hands-and-columbia-crest-tasting-rooms-close.html

If you recall SMWE was purchased back in 2021 by a New York based private equity firm for $1.3B and now they are doing what they do best. Maximizing shareholder profits.....

https://www.northwestwinereport.com...inville-property-were-not-going-anywhere.html

If I interpret the article correctly, they are just closing their tasting room and continuing their retail production. It could be poor traffic, bad marketing, bad weather or other reasons than glut. What am I missing?

 

[ibglowin]

Last year the same new owners of SMWE cancelled 40% of their grape contracts just before harvest leaving grape growers scrambling to find new potential buyers. SMWE is the largest producer of wine in WA State.

https://paulgregutt.substack.com/p/the-slow-unraveling-of-ste-michelle

They are running the playbook of selling off whatever they can to maximize shareholder profits. Columbia Crest has/had an amazing tasting room in eastern WA. Their reserve Cab Sauv was named #1 Wine of the year back in 2005 by Wine Spectator. How do you even have reserve wines without a wine club which purchase most of the wines at close to MSRP?

https://wineeconomist.com/2023/08/22/wawine/


"Washington State has a production model whereby many wineries own few, if any, vines themselves, relying on grapes bought from specialist growers. These 400 plus growers serve to supply over 1,000 wineries, many of which are small – 90% of them produce under 5,000 cases. If SMWE is slashing its requirement for grapes, it will create an immediate glut of grapes on the market, subduing prices. In the longer term it will provide a headache for those growers who have been earning a decent income selling their grapes to SMWE: do they switch from grape growing to another crop (Washington is a renowned source of fresh produce) or have a go at becoming winemakers themselves? Neither option is cost- or risk- free."

 

[Raptor99]

I'm glad to read that they are continuing to make wine. 14 Hands and Columbia Crest are two great brands in my region. They are on the list of commercial wines that I enjoy on a regular basis.

 

[Garagista]

Last year the same new owners of SMWE cancelled 40% of their grape contracts just before harvest leaving grape growers scrambling to find new potential buyers. SMWE is the largest producer of wine in WA State.

https://paulgregutt.substack.com/p/the-slow-unraveling-of-ste-michelle

They are running the playbook of selling off whatever they can to maximize shareholder profits. Columbia Crest has/had an amazing tasting room in eastern WA. Their reserve Cab Sauv was named #1 Wine of the year back in 2005 by Wine Spectator. How do you even have reserve wines without a wine club which purchase most of the wines at close to MSRP?

https://wineeconomist.com/2023/08/22/wawine/


"Washington State has a production model whereby many wineries own few, if any, vines themselves, relying on grapes bought from specialist growers. These 400 plus growers serve to supply over 1,000 wineries, many of which are small – 90% of them produce under 5,000 cases. If SMWE is slashing its requirement for grapes, it will create an immediate glut of grapes on the market, subduing prices. In the longer term it will provide a headache for those growers who have been earning a decent income selling their grapes to SMWE: do they switch from grape growing to another crop (Washington is a renowned source of fresh produce) or have a go at becoming winemakers themselves? Neither option is cost- or risk- free."

Thanks, this is helpful.

 

[Christopher Anderson]

What my dream has been for 4 years, for my retirement is to find a small vinery (~33 acres in Texas Wine country) that goes bankrupt (sorry for them) and retire to grow grapes and enjoy life.

 

[jswordy]

That brand has been in trouble awhile, for sure. The decline in wine interest has even reached to the level of state winemaking groups, which are seeing a decline in people interested in becoming new winemakers. It's somewhat a cyclical thing, I'm sure. But it's no secret and nothing new that wine is experiencing what most alcoholic drinks are, a decline in interest and consumption.

 

[Garagista]

That brand has been in trouble awhile, for sure. The decline in wine interest has even reached to the level of state winemaking groups, which are seeing a decline in people interested in becoming new winemakers. It's somewhat a cyclical thing, I'm sure. But it's no secret and nothing new that wine is experiencing what most alcoholic drinks are, a decline in interest and consumption.

 

[Garagista]

What my dream has been for 4 years, for my retirement is to find a small vinery (~33 acres in Texas Wine country) that goes bankrupt (sorry for them) and retire to grow grapes and enjoy life.

A couple of years ago, I seriously looked at buying 77 acres of prime vineyards in Calavaras County in the Gold Country (it's a fairly famous piece of land involving Mark Twain). The price was right but doing the math showed that it would be a real struggle to make it break even. I decided it violates the last few words in your post “enjoy life”. It would no longer be fun, just a money pit.

 

[Sage]

Saturation point. When I drive cross country there's literally a winery on every corner. I live near Walla Walla, WA and when a town under 40,000 has 130 wineries?? Like everything, wine is losing the "In Factor".

 

[ibglowin]

Saturation point. When I drive cross country there's literally a winery on every corner. I live near Walla Walla, WA and when a town under 40,000 has 130 wineries?? Like everything, wine is losing the "In Factor".

Walla Walla is the "Napa" of WA State. Too bad it's so far away from a large city with an airport or the tourism traffic would be 10X what it is today.

 

[Garagista]

According to the Wash Wine Commission, the number of Washington wineries has grown 12% over a 5 year period.

• 2018: Approximately 980 wineries.
• 2019: Around 1,000 wineries.
• 2020: The count surpassed 1,050 wineries despite challenges from the pandemic.
• 2021: Over 1,075 wineries were reported, reflecting continued expansion.
• 2023: Currently, Washington has more than 1,100 wineries, making it the second-largest wine-producing state in the U.S. after California

Also from the wine commission:
In 2023, Washington State harvested approximately 159,000 tons of wine grapes, marking a 34% decrease compared to the 2022 harvest of 240,000 tons.

With the supply (number of tons of grapes going down) and the number of wineries slowly growing, I would think Wash State is in a pretty good place.

 

[Obbnw]

What my dream has been for 4 years, for my retirement is to find a small vinery (~33 acres in Texas Wine country) that goes bankrupt (sorry for them) and retire to grow grapes and enjoy life.

I'm retiring to grow grapes this year!

But I think 40 to 60 vines is the maximum I want. Let's call it 0.1 acres ; ). Right now I have about 30 vines on my .2 acre urban lot.

 

[wood1954]

A couple of years ago, I seriously looked at buying 77 acres of prime vineyards in Calavaras County in the Gold Country (it's a fairly famous piece of land involving Mark Twain). The price was right but doing the math showed that it would be a real struggle to make it break even. I decided it violates the last few words in your post “enjoy life”. It would no longer be fun, just a money pit.

i was in Calaveras county last year and found the wine to be mostly high acid, high tannin and high alcohol. I was very disappointed.