The Willamette Valley wine producers in Oregon are known throughout the world for their exceptional, expertly crafted Pinot Noir wines. Although Oregon grape growers grow over 80 different grape varieties in their vineyards, Pinot Noir has evolved into the grape that represents the Oregon wine industry.

But Oregon has more to offer than just Pinot Noir. Its bounty includes world-class Viognier and Tempranillo, which are currently putting Southern Oregon wine producers on the wine map, as well as the rising popularity of the white wine varietals of the Willamette Valley, particularly Chardonnay, Pinot Blanc, and Riesling. All three of those grape varieties are pushing the limits of Oregon wine production and are poised to become the newest superstars of the Willamette Valley.

Best in Class

Beyond just their ability to make wine, Oregon wine growers are leaders. Additionally, they lead the sector in direct-to-consumer (DTC) sales.

The subsequent development of the three-tier distribution system was one of the unintended consequences of America’s disastrous experiment with Prohibition. Wineries sold their product to distributors, who then sold them to retailers, who then sold them to consumers. The distribution system was created to prevent any significant players from abusing their market dominance to improperly influence any of the other tiers. As a result of this and individual state control and regulation, producers faced a very difficult and frequently expensive path to market.

The three-tier system is still largely in place, but exceptions have been made in recent years to allow wineries to sell directly to consumers. The regulations, which were once restricted to in-person interactions, have since been loosened to permit consumer mail order sales. The ability to establish and run “wine club” sales to a producer’s “friends and visitors” has been a godsend for many small wineries and a key factor in the ongoing growth of the US craft wine industry.

The typical winery receives about 35 cents of every dollar in retail sales. The distributor and retailer each receive a portion of the remaining funds. The figures change. They are typically lower for wines that sell for less than $10 and higher for pricey, in-demand wines. The cost of growing/purchasing grapes, as well as the base cost of constructing and maintaining a winery, will all have an impact on producer margins.

Bottom Line

The escalating global interest in the yearly Willamette: The Pinot Noir Auction is a reflection of the popularity of Oregon wines. The Willamette Valley Wineries Association hosts a trade event called the auction that draws notable guests from all over the nation.