The Oregon Wine Boom: Are Classifications in the Future for Oregon Grand Cru-Style Wine?

oregon wine

Oregon wine regions such as Dundee Hills need Grand Cru-style classifications to further its influence on the premium wine market. Photo Credit: Flickr CC user John

 

Perhaps no state in the US has surpassed expectations in 2015 more than Oregon. International Oregon wine sales have increased by a whopping 50 percent over the past year, which is the most a single state in the US has increased in more than 10 years. A renewed culture of fine wine in the area, coupled with a boom in vineyard sales, has resulted in more premium Oregon Pinot Noir on the market than ever before. The state’s finest wineries are begging for a new classification system based on the quality of their bottles, which would sort out which estates can be considered Grand Cru, and which can be considered Premier Cru or Village-style. As we have seen in Napa Valley, when an area improves this quickly and dramatically, classifications need to change to meet modern needs.

A New Wine Superpower

Oregon has developed a reputation as one of the best areas to grow premium Pinot Noir grapes, and as a result, the number of wineries formed in the state has increased by 12 percent in the past year alone. These new wineries are being established under current, generic AVA-regulated land, but they have yet to receive an official classification rating based on quality. The quality of wine in Willamette Valley is so high that the region has already formed sub-AVAs within the larger regional AVA. This should tell wine officials that Willamette Valley is more than ready for Grand Cru-style classification.

According to a study published in Wine Economics, premium wineries in Oregon no longer wish to associate themselves with lower-quality wineries that consistently fail to meet AVA standards. Instead, wineries that consistently perform above AVA standards for their subregion could be given a separate category of recognition, allowing their market worth to increase accordingly. The benefits are two-fold: lower-quality wineries will not compete on the same level as high-end estates (which takes the pressure off cheap, commercial estates), while high-end estates will see an increase in market value through classification reputation.

Willamette Valley Possible Grand Crus

The Dundee Hills subregion would likely be the first in Willamette Valley to receive a Grand Cru status, since it is home to most of the high-end wineries that supply grapes to other premium estates in Oregon. Abbey Ridge is an example of a vineyard that supplies grapes to Cameron and other high-end producers, and its consistent quality should be rewarded with an appropriate classification. Grand Cru-style ranking is a matter of life and death for these estates; a professor of International Economics and Development at Seton Hall University found that Oregon wineries only reached premium bottle prices when they were given specific AVA status. This means that collectors and international buyers are often only interested in paying premium prices for wine when they know the estate is regulated under a strict classification system.

Collectors are also negatively impacted by a lack of estate-specific classification. If a collector wants to invest in Oregon wine, they must sort through each estate individually to determine which are of the highest quality. Classification is shorthand which tells buyers which estates are worth investing in without hours of research. The subregion AVA classification helps, but collectors are still forced to consider all wineries in a region, rather than focusing on a handful of Grand Cru or Premier Cru-style wineries. As more collectors buy these wines, it seems inevitable that the classification trend will continue in Oregon beyond sub-AVA regions, with the state moving into estate-specific rankings on par with France.

The Rise of Oregon Pinot Noir

Oregon has earned its quality reputation through sales of Pinot Noir, a grape that has found its ideal home in the soil and climate of Willamette Valley. While climate change has driven Oregon’s temperatures up and its rain levels down, wineries seem affected for the better. In 2015, record-high temperatures gave its grapes a complex concentration of flavors, and the temperature trend is expected to continue. The intense red fruit and prominent bouquet of wines like Scott Paul’s Pinot Noir are already reaping the benefits of climate change in the state. This varietal grows better in Oregon than it does in California, since Oregon still has enough rainfall each year to keep acidity high in its wines.

The best subregion AVAs in Willamette Valley are the volcanic Dundee Hills, the sediment-heavy Yamhill-Carlton and the combination volcanic and sediment-dense Chehalem Mountains. Most of these regions produce Pinot Noir, and this varietal makes up 60 percent of all wines produced in Oregon. Since quality is so high, 70 percent of Oregon’s wine sales come directly from this grape. Pinot Noir is notoriously difficult to grow, which is why it is ranked the 10th most popular varietal globally, behind even Trebbiano and Grenache. Oregon is one of the few regions in the world that has an ideal climate for Pinot Noir, and this feature is what will make the state stand out on the market in the future. Wines like Evening Land are already increasing in market value, and will continue to do so for the next decade.

Premium Wines, Now at Premium Prices

Oregon wines are being recognized by international wine critics as some of the finest bottles of Pinot Noir on the market today, and this is resulting in increased market value across the state. At $40 per bottle on average, Oregon wine now costs more than wine from Washington and Sonoma County. Most of these wines are being purchased by international buyers, since only 12 percent of US wine drinkers regularly spend more than $30 on a single bottle of wine. This is a sign that Oregon wine is more worthwhile for outside collectors than those who live in the state, which highlights the importance of having a quality classification system for collectors who are unfamiliar with Oregon terroirs.

While Oregon sorts out its rankings, collectors would be wise to invest in bottles now, while prices are still relatively low, to increase their chances of making a greater profit on the bottles in the future. The average bottle price of Serene Pinot Noir increased from $140 to $170 in 2015, an increase of 21 percent. As more high-end producers sell more bottles at premium prices, and as these prices increase in response to future Grand Cru-style classifications, collectors would be wise to focus on Oregon wine today.

Whether you are starting your high-end wine collection or adding to an established portfolio, Vinfolio is your partner in buying, selling, and professional storage. We carry excellent investment wines from the best vineyards in Oregon. Contact us today to get access to the world’s finest wine.

At Vinfolio, we help our clients buy, sell, store, and manage their most treasured bottles of wine. But in our spare time, we’re just a group of passionate and slightly obsessed oenophiles--we love sharing a great glass of vintage Champagne, followed by a Burgundy, and then a Bordeaux, to get things started. We’re always obsessing over the latest (and oldest) vintages, and we want to share that knowledge and passion with our readers.