As the 2022 grape harvest gets underway across the region, Chateau Ste. Michelle has begun wrapping up bottling for good in Woodinville.
“The facility has been dedicated to the Chateau Ste. Michelle brand, which is our flagship, and produced our white wines,” said Ryan Pennington, vice president of communications for Ste. Michelle Wine Estates. “Right now, we are bottling the last of the 2021 vintage whites, and once that’s completed, all of those wines, both whites and reds, will stay in Eastern Washington and be made close to the vineyards.”
The move was made for a number of reasons, including efficiency and profitability, but Pennington said the tipping point was the environmental impact caused by taking grapes grown on the eastern side of the state and transporting them hundreds of miles for processing.
“We estimate we were burning around 75,000 gallons of diesel fuel every year for that transport, and all of that adds cost to production. But then we’re also taking all of those finished goods back over the mountains (to Eastern Washington) because we centrally warehouse everything there. So, it’s really twice the traffic.”
The production changes come amid a recent announcement that Ste. Michelle Wine Estates, the largest winery in the state, acquired Oregon’s A to Z Wineworks in a deal orchestrated by Bank of the West, part of the BNP Paribas Group, and a large commercial lender to the wine industry.
Bank of the West also led the financing for the $1.2 billion acquisition of Ste. Michelle Wine Estates last year, purchased by New York based Sycamore Partners. In a news release, BNP Paribas said it acted as exclusive financial advisor on A to Z on the deal, working closely with Bank of the West.
Terms of the recent purchase were not disclosed but puts one of Oregon’s largest wineries in the hands of Ste. Michelle Wine Estates, with its already well-known brands based in the Columbia Valley, including 14 Hands and Columbia Crest.
“The acquisition of A to Z Wineworks by Ste. Michelle Wine Estates gives us a substantial presence in Oregon and complements our roots in the Pacific Northwest,” Ste. Michelle Wine Estates CEO David Dearie said in a statement.
For those wondering about the push south, Pennington said, “Washington remains our home and the core of our business, so we’re always looking for opportunities to grow in Washington.”
Ste. Michelle Wine Estate’s impact on Washington wine is reflected in the naming of Ste. Michelle Wine Estates Washington State University Wine Science Center, located on the campus in north Richland.
“It remains an incredibly important asset for us and for the entire industry,” Pennington said. “We look forward to leveraging the results of their research for years to come.”
This commitment to Washington includes the decision to keep production within the state and will so far not result in an expansion of any facilities near where the grapes are grown.
Production at Paterson’s Canoe Ridge handles the red varietals but isn’t expected to absorb the whites entirely.
“We have used both our own facilities and contract facilities historically and will continue to do that,” Pennington said. “So some of the whites will be made at our facilities in Paterson, and some will be made at contract facilities in the area.”
Pennington said staff confirms the quality assurance for the winemaking when it comes time to assemble the blends at the variety of sites. He doesn’t see an impact on vineyard use based on this production move, as winemakers have to project out demand by a couple years.
Keeping production closer to Eastern Washington vineyards also isn’t expected to bring an immediate impact on local jobs, Pennington said. He expects any gains to be “modest,” but may increase the security of current positions by allowing the facilities to use their full capacity, while investing in new equipment and efficiencies that can increase future capacity to produce.
As the grapes come through the door, Ste. Michelle Wine Estates is “extremely excited about the harvest that’s underway,” Pennington said. “Everyone was wringing their hands a bit earlier in the season with the cool, wet spring. But we’ve had a beautiful summer, and the weather right now is absolutely ideal for catching up on some of that time missed earlier in the season. The quality looks fantastic, and the quantity is also pretty robust, so we’re very excited about this year’s harvest.”
As all 2022 vintages start bottling east of the Cascades for the first time, Ste. Michelle Wine Estates is in no hurry to sell its signature Woodinville chateau and surrounding property.
Pennington said its popular concert series at the venue will return next summer, and, in the meantime, “make improvements to the property and evaluate opportunities as they come in.”
The Ste. Michelle Wine Estates portfolio also includes Erath, H3, Liquid Light, Intrinsic, Rex Hill, Spring Valley Vineyard, Patz & Hall and Northstar, along with several other premium brands. The winery has partnerships with Marchesi Antinori (Stag’s Leap Wine Cellars and Col Solare), Ernst Loosen (Eroica) and Michel Gassier (Tenet). It serves as the exclusive U.S. importer for Marchesi Antinori and Champagne Nicolas Feuillatte.