OREGON
Saturday, August 17, 2019
East Oregonian
A7
Grapes of change:
How the wine industry has transformed Oregon’s economy
By SIERRA DAWN
MCCLAIN
Capital Press
McMINNVILLE
—
McMinnville, 1971. When a
handful of pioneering farm-
ers bought land on the out-
skirts of this modest rural
town and decided to plant
wine grapes, people called
them crazy. Wine grapes
wouldn’t grow in the North-
west, they said.
Third Street in McMin-
nville, 2019. People scut-
tle between high-end bou-
tiques, local businesses and
fine dining. Baskets of petu-
nias hang from lamp posts
like colorful chandeliers.
And on the corner where a
JCPenney store once stood,
there’s a wine tasting room.
In this growing city
where urban and rural
worlds intersect, the wine
industry has signed its
autograph. In 2016 alone,
Yamhill County, of which
McMinnville is the seat,
raked in more than $15 mil-
lion in wine-related prop-
erty taxes.
Michael Rogers, resi-
dent of McMinnville since
1976, has watched the
transformation.
“It’s been an incredible
change,” said Rogers. “We
went from a small Oregon
town with a bunch of tur-
key farms to a classy city of
wineries.”
McMinnville is one
grape on the vine. Across
Oregon, the industry has
profoundly impacted the
state’s economy and indi-
rectly shaped its demo-
graphics and culture.
The industry continues
to grow. In 2010, according
to the Oregon Vineyard and
Winery Report, there were
567 vineyards statewide. By
2017, that number more than
doubled to 1,144.
According to Full Glass
Research, in 2016, the sum
of all economic activity in
Oregon related to wine was
$5.61 billion. That means
Oregon wine has a state-
wide economic impact of
$177.89 per second.
It’s not just measured by
sales. Bruce Sorte, a retired
economist from Oregon
State University, said the
impact is computed using a
multiplier effect.
Imagine throwing a
stone into a pond and
watching
the
concen-
tric circles of ripples. The
stone is the wine industry.
The inner circle represents
direct effects — expendi-
tures on wine. The middle
circle represents indirect
effects, such as payments
to suppliers. The outer cir-
cle represents income-in-
duced effects, which work
like this: A vineyard laborer
might spend part of his or
her salary buying groceries.
Even though the grocery
store is not dependent on
that one person’s purchase,
the sum of many such pay-
ments impacts businesses
and the overall economy.
The wine industry has
ripple effects that impact
manufacturing,
tourism,
small businesses, farmers,
city infrastructure and the
job market.
The cooper, the canner
and the glass bottle
maker
Morning sunlight illumi-
nated three figures binding
barrels under an awning.
Fires crackled.
Rick DeFerrari, mas-
ter cooper at Oregon Bar-
rel Works, rolled a barrel
across his shop and hoisted
it over a fire to “toast” its
interior — caramelizing the
wood sugars to bring out
sweetness in the wine.
DeFarrari runs a cooper-
age with two assistants in
McMinnville. They make
about 520 barrels a year,
selling 50% of them to
winemakers.
Oregon’s wine indus-
try fuels many trades. The
industry’s influence on
manufacturing, however,
is often exaggerated, wine-
makers said.
Oregon has several cus-
tom crush facilities, and
Capital Press Photo/Sierra Dawn McClain
An old oak overlooking hills of rolling rows of grapes at Hyland Vineyard.
numerous steel manufac-
turers are based in the
Northwest. Oregon wine
label manufacturing had a
2016 value of $5.4 million,
according to Full Glass
Research.
Yet most manufacturers
are not based in Oregon, or
even the U.S.
“We don’t have the
expertise, the know-how,”
said Eric Baisch, manager of
Davison Winery Supplies.
“Most products are coming
from Europe, where there
are generations of knowl-
edge we don’t possess.”
Location
matters.
Where
manufacturing
takes place has economic
consequences.
Robin Cross, an Oregon
State University economist
specializing in wine eco-
nomics, said any time pro-
ducers further process their
goods, they’re increasing
the economic impact.
“Value-added
goods
increase a commodity’s
impact on its local region,”
said Cross.
Hazelnuts are a good
example. Cross said pack-
aged, roasted hazelnuts pro-
cessed in-state may have 20
times the economic impact
on revenue and labor as raw
nuts.
“Wine works like that,
too,” said Cross. “The more
local the manufacturing, the
bigger the local impact. It’s
about how close producers
keep suppliers.”
Oregon
winemakers
don’t keep suppliers very
close.
Build it and they will
come
A young man, feather
askew on his cowboy hat,
stood beside a group of
retired show horses. He
was at Winter’s Hill Estate
to lead an equestrian wine
tour.
Soon, the tourists —
from out-of-state, each
paying $190 not including
the wine — were weaving
between vines with the soft
clip of horse hooves and the
rustle of leaves.
“Best thing ‘bout this
job is meetin’ people from
all over the world,” said
Willis. He rode the way he
walked and talked, with an
easy swagger. “People from
Japan, Europe, India, all
around the U.S. They come
for the Pinot Noir and inti-
mate experience.”
The group hitched up the
horses and entered a dark
tasting room. Amid the yel-
low lamplight and slosh of
wine, tourists gasped as
Willis, a horseman and cat-
tle rancher, told stories of
the 30-some bones he’d bro-
ken riding in rodeos. Urban
and rural worlds collided —
but only for a taste.
According to Long-
woods International, a mar-
ket research consultancy,
wine-related tourism con-
tributed about $787 million
to Oregon in 2016.
Gregory Jones, director
of the Evenstad Center for
Wine Education at Linfield
College in McMinnville
and part of the family-run
Abacela Winery in Rose-
burg, said wine tourism has
transformed Southern Ore-
gon’s economy.
“Southern Oregon has
grown economically and
culturally because of wine
tourism,” said Jones.
Agritourism, Jones said,
fuels events — Jackson-
ville’s lavender fairs, Crater
Lake boat tours, the Shake-
speare Festival in Ashland.
It also feeds the hospital-
ity industry.
Jeff Knapp, executive
director of the tourism pro-
gram Visit McMinnville,
said the Atticus Hotel, built
for $8 million in 2018, typi-
cally charges $300-$750 per
night.
Taking advantage of the
tourism boom, in 2007,
McMinnville
residents
Michael and Valerie Rogers
opened the Oregon Wine
Cottage, a vacation rental.
“When we took our idea
to the city planning com-
mittee,” said Rogers, “they
asked us, ‘What’s a vacation
rental?’ Now there are prob-
ably 100 or more in town.
That was only 12 years
ago.”
Farms and small
businesses
“There are synergies
between food and beverage
industries in Oregon,” said
Jones, the Linfield profes-
sor. “Restaurants, ranchers,
farmers’ markets. Whether
they realize it or not, they’re
all connected to wine.”
Moe Momtazi, owner of
Maysara Winery and Mom-
tazi Vineyard in the green
hills of McMinnville, has
seen first-hand how food,
wine and small businesses
intertwine.
In July, Momtazi said, a
couple from Colorado spent
over $500,000 on their wed-
ding at his vineyard — sup-
porting the local catering,
bridal and floral industries.
“Wine also brings people
to the area who care about
healthy food,” said Mom-
tazi. He spoke with a deep
Persian accent, leaning on
his vowels and letting his
R’s roll off his tongue. “That
has ripple effects for restau-
rants and natural farms.”
He gestured to a spread
in his winery — tart quince
jam, crackers, sliced meats
and strong cheeses. The air
was thick with the heady
scent of wine.
Momtazi also represents
the international spirit of
the industry. In 1982, he and
his wife, then eight months
pregnant, fled Iran after
the hostage crisis, escaping
with the help of smugglers.
In 1983, they arrived in the
U.S., finally planting their
roots in Oregon — literally
— in 1990.
Momtazi, previously an
engineer, designed the vast
winery himself. During
off-seasons, he and his
workers labored three years
to build the winery using
wood and stone from Mom-
tazi’s land.
The people behind the
purple
That’s where the wine
industry has one of its big-
gest impacts — in Oregon’s
labor force.
Brett Miller, Northwest
Wine Co.’s marketing direc-
tor, cruised up the vine-
yard slope at Hyland Estates
on his ATV, past rows of
grapes planted in geometric
shapes on the hillside like a
great green puzzle.
Among the vines, labor-
ers worked under sunhats
and long sleeves.
“It’s hard work,” said
Miller, who has labored
many seasons in vineyards.
“Long hours. Wet. Very
sticky. But it’s fun.”
Hyland, like most vine-
yards, employs primar-
ily Latino workers through
labor contractors. Most
come from Oaxaca, Mexi-
co’s second-poorest state.
Agricultural labor is
scarce, and Oregon wine-
makers say it is their big-
gest challenge and expense.
Vineyards must offer com-
petitive wages. The typical
Hyland laborer, said wine-
maker Bruno Corneaux,
makes $15 hourly.
The wine industry’s
impact on labor begins in
the field, but it doesn’t end
there. According to Full
Glass Research, in 2016,
the number of wine-related
and wine-induced jobs in
Oregon was 29,738. Related
wages topped $1 billion.
To grasp the scope, look
how one winery impacts
jobs.
Hyland Estates employs
about 30 vineyard workers
and 45 winery and cellar
workers, most year-round
and full time. Around har-
vest time, Hyland contracts
50 seasonal laborers. That’s
125 total annual workers.
Sorte, the OSU econ-
omist, uses IMPLAN, a
computer model, to gen-
erate economic estimates.
Sorte said the wine indus-
try’s multiplier for employ-
ment is 2.75. That means
for every one job created
within the wine indus-
try, one other related job
like manufacturing is cre-
ated and three-quarters of
a job is created through an
induced effect, such as a
restaurant job. If you multi-
ply 125 workers by 2.75, you
get 344. That means Hyland
Estates alone creates almost
344 jobs.
Grafting new vines:
demographics, culture
According to the Ore-
gon Community Founda-
tion’s most recent report,
the state’s Latino popula-
tion is growing faster than
the national rate.
In McMinnville, U.S.
Census data shows from
2000 to 2010, the Latino
population jumped from
15% to 21% of the total pop-
ulation. Higher percentages
are projected for the 2020
count.
Gioia Goodrum, pres-
ident of the McMinnville
Area Chamber of Com-
merce, said residents are
also
aging.
Although
the city is growing, its
school-age population has
stagnated.
“Young families want to
move here,” said Goodrum.
“But there’s no more land.”
Although
the
wine
industry has fueled McMin-
nville’s growth, it has iron-
ically served as a block-
ade to expansion. The city,
surrounded by high-value
farmland, has over 250 win-
eries within 20 miles of
downtown. McMinnville is
beating its head against the
urban growth boundary.
“We don’t want to
become only a retirement
community,” said Good-
rum. “If we can’t build out,
we’ll have to build up.”
Anne Sery, winemaker
at Hyland, said the culture
has shifted, too.
“Yamhill’s culture is
changing,” she said. “Not
everyone likes that. Neigh-
bors often dislike wine
culture. Sometimes tour-
ists are disrespectful of
locals. Some old-time farm-
ers are annoyed with vine-
yard owners. But many are
happy with the changes.”
Despite the influx of
new money, not everyone in
Yamhill County has pros-
pered. Census data show
average household incomes
have remained flat. The
number of people on food
stamps — formally called
the Supplemental Nutrition
Assistance Program — has
increased by 49%. And the
percentage of people in pov-
erty has increased from 9%
of the overall population to
11%.
In the city park beside
the McMinnville Public
Library, dozens of home-
less people, cocooned in
blankets, lie on the grass or
slouch against benches day
after day.
“The wine industry has
created jobs for a lot of
people, but to solve deep-
er-rooted problems of pov-
erty, it’ll take a lot more
than one successful indus-
try,” said economist Robin
Cross.
Not just a drop in the
barrel
Oregon’s growing wine
industry constitutes a tiny
fraction of the international
wine supply.
According to Jones of
Linfield, prior to the 1970s,
Oregon’s climate was too
cold to grow most wine
grapes. “Climate change
has made Oregon suitable
to growing grapes,” said
Jones. “Pinot Noir has a
narrow climate niche. We’re
in the sweet spot right now,
but if we get a few degrees
hotter, that may change.”
Because
Oregon’s
wine industry is compar-
atively young, its share of
the national market is 1%,
dwarfed by wine-produc-
ing behemoths, such as
California.
“There’s
room
for
growth,” said Sery. “It’s
Oregon against the world.”
The industry may be
small on the global scale,
but wine has made no small
impact in Oregon.
On Third Street in
McMinnville, there’s a lodg-
ing house called the Hotel
Oregon built in 1905. Climb
four flights of stairs to the
rooftop and look out over the
bustling city, not long ago a
small town of turkey farms.
Look at the surrounding foot-
hills — green and sprawling,
miles and miles of vineyards.
The state’s wine indus-
try may be a drop in the
barrel of the worldwide
industry, but in Oregon, its
economic impact has made a
big splash.