The massive Northwest wine beast 鈥� Ste. Michelle Wine Estates 鈥� has announced to its contracted Washington wine grape growers that it鈥檚 not taking nearly half of its contracted fruit this fall.
Ste. Michelle Wine Estates makes up around half of Washington鈥檚 wine industry. Ste. Michelle said it is taking in 40 percent less grapes in Washington contracts, but so far Oregon鈥檚 wine industry 鈥� whose largest producer is also Ste. Michelle Estates with brands like and Erath 鈥� hasn鈥檛 faced the same blow.
Ste. Michelle owns, and mainly contracts, more than 30,000 acres of grapes in Washington, according to a Sycamore Partners .
Washington growers were told their fruit didn鈥檛 have a home about a month from harvest.
鈥淲e have started conversations with our grower partners in eastern Washington to adjust our grape supply to better align with demand and enable us to focus on crafting the highest quality premium wines from Washington,鈥� Ste. Michelle Wine Estates said in a statement. 鈥淥ur long-term relationships with our growers are extremely important to us, and while this is a difficult process, these proactive measures are necessary for the ongoing health of our business as well as the health of the overall Washington wine industry.鈥�
The massive wine company won鈥檛 take any fruit from some growers and will reduce percentages for others.
Waiting out the summer rain and lightning in vineyards in early August, some growers had a few brief moments to talk during the busy walk-up to harvest which starts at the end of the month. But many growers we spoke with told us they are afraid to go on record for fear of any possible partial-deal being cut with Ste. Michelle.
鈥淭he industry has a long history of being creative, collaborative, and resilient and we will continue to work together to find new ways to reach the next generation of consumers,鈥� said Kristina Kelley, executive director of the Washington State Wine Commission, in a statement.
鈥淲e have experience adjusting our budget and will remain agile to prioritize work that drives the growth of Washington wine,鈥� she said.
The ripples could be far reaching: This huge cut means that the and the will likely be curtailed. And representatives from WSU鈥檚 Viticulture and Enology program 鈥� which draws a lot of support from Ste. Michelle and even has a named for Ste. Michelle in Richland 鈥� didn鈥檛 say much about the wine giant鈥檚 major cut back.
鈥淲e have appreciated that Chateau Ste. Michelle named the Wine Science Center and anticipates that our student learning opportunities will continue,鈥� said Sandra Haynes, chancellor of Washington State University Tri-Cities.
Many growers are scrambling after they expanded vineyards around a dozen years ago following calls to increase acreage from Ste. Michelle. Growers said they are trying to find possible homes for grapes and negotiating with their bankers on what to do.
Ste. Michelle formed the base of many state vineyards鈥� portfolios. For example, Ste. Michelle might have taken 60 percent of the fruit from a vineyard, so now, with Ste. Michelle gone 鈥� smaller wineries might also lose out if the vineyards can鈥檛 sustain the hit of so much unsold fruit.
Ste. Michelle Wine Estates has been operating in the Northwest since 1934. It was recently acquired by a New York firm called, . Ste. Michelle Wine Estates had been the largest wine company in the Northwest and the third largest premium wine company in the United States, according to a Sycamore Partners press release from 2021.
Some larger Northwest winery companies might sop up some of the juice. However, many of these grapes have been managed for larger-production use 鈥� using mechanized thinning, hedging and harvesting 鈥� that they wouldn鈥檛 likely all be purchased by small boutique wineries who many times do these processes with more-expensive hand labor. Still, many of the inputs like fertilizer and chemicals have been spent on these vineyards for this year.
Ste. Michelle Wine Estates owns 2,400 acres in Washington and 190 acres in Oregon, according to an email from Brandyn Hull, with Ste. Michelle. Still, the outfit contracts with outside growers for most of its operation.
Some real estate brokers are also reportedly swirling and sniffing around the Northwest. This spilled Ste. Michelle juice could mean vineyards might sell or go out of business.
This continues the woe for Ste. Michelle which has recently sold its Napa jewel Stagg鈥檚 Leap Wine Cellars. It also lost a convenient connection to the East Coast with the closing of a in Wallula, near where the wine company stores most of its inventory. The wine industry has been facing an overall over the past year. Ste. Michelle now has stiff competition in its value-wine category by craft beer, spirits, hard seltzers and ready-to-drink cocktails. There has been pressure from European imports, too.
There are upcoming individual meetings for Ste. Michelle's contract growers. Many told us they will know more after they have talked to their colleagues at the upcoming multi-day event. It is set for this weekend at Chateau Ste. Michelle in Woodinville. The benefit supports Seattle Children鈥檚, WSU鈥檚 wine program and healthcare for farmworkers. One of the main events will toast 鈥� former CEO of Ste. Michelle Wine Estates.
