The face of the Walla Walla wine industry is changing.
Lowden, Wash. will soon be home to Walla Walla Wine Works, a new winery under construction by Seattle-based Precept Wine Brands.
“This time marks an exciting evolution for Precept. Our hope since the beginning has been to build viable wine brands that speak to the consumer and allow us to invest the resources back into winery facilities and vineyards. Today, we are achieving what we set out to accomplish and it is an incredible dream realized,” said founder Andrew Browne in a statement issued by Precept.
Walla Walla Wine Works will operate on a scale not previously seen in region. With a planned production of 250,000 cases, the winery will produce more than eight times the amount of wine of Walla Walla’s current largest winery: Canoe Ridge.
Walla Walla Wine Works will significantly expand the production capacity of Precept itself, building on the current 600,000-case production. Construction of the facility is expected to be complete in time for the 2008 harvest.
Currently at Walla Walla winery Waterbrook will have its production moved to the new facility and will remain the flagship Walla Walla wine produced by Precept. The production at the winery will be managed by John Freeman, Waterbrook’s current winemaker.
“Acquiring Waterbrook in late 2006 introduced Precept Wine Brands to the Walla Walla wine industry. Having a brand in our portfolio that is steeped in history as one of the first wineries in Walla Walla definitely makes the process easier and very exciting. We believe we’re creating something very special with Walla Walla Wine Works and our hope is to produce outstanding quality wines and educate visitors about Washington winemaking and viticulture,” said Ally Miller, public relations manager for Precept, in an e-mail.
The expansion by the firm is expected to have economic implications for Walla Walla’s local population of wineries.
“In contrast to Napa Valley, in Walla Walla you can still earn a decent profit from making wine. This is mainly due to the fact that grape prices are very low. Even if you buy high-end quality fruit, you are not going to pay more than $4,000 a ton. Your marginal cost of producing one bottle of wine is therefore never more than $8. And then you have high-end wine [which sells] easily for $30 and above, ” said Karl Storchmann, professor of Economics and vice-president of the American Association of Wine Economists.
While Walla Walla is still nascent when compared to Napa, Cali. the introduction of a large-scale winery pushes the area in the footsteps of Napa. Storchmann currently estimates there to be about 150 wineries in and around Walla Walla, while there are approximately 300 Napa wineries.
“[Walla Walla Wine Works might] draw more firms in and, as a result, the whole wine cluster will grow. This perfectly fits economic theory. As long as a certain market enjoys real profits, more competitors join in. There is a large gap between the price of wine and the price of grapes in Walla Walla. You do not see that to that extent in Napa,” said Storchmann.
Precept’s expansion into Walla Walla may bring balance to the broader wine industry in the valley as well.
“By growing grapes you are unlikely to make any profit. I think, everybody who grows grapes does it either because they want to have top-notch fruit and don’t trust other people or they do it for the love of the thing. With the influx of more wineries into the Walla Walla Valley and the expansion of existing wineries profit margins from making wine will fall, which I think is a good thing. It may also lead to increasing grape prices allowing grape growers to enjoy profits too. So I think it will bring the market into some kind of balance, which I think is a wonderful thing,” said Storchmann.
