Small Washington wineries find their niche

Published by Seattle Time, Pacific Northwest Magazine BY BRIAN J. CANTWELL

IT WAS A hot July day at Tildio Winery, just above pretty, glacier-carved Roses Lake, a mile off the northern shore of Lake Chelan. Out front, blooming lavender was a smear of purple across a garden bank. In the vineyard, young grapes were still firm, green little marbles bearing promise.

Inside, Katy Perry had been slaving over a pipette all day.

A graduate of the University of California-Davis wine program and a former winemaker in the Napa Valley and at Chateau Ste. Michelle, she had just finished running the numbers — analyzing alcohol content, residual sugar, pH levels and so on — on Tildio’s 2011 red blends. Her final effort: the Robusto.

“I call it our blend without borders,” says Milum Perry, her husband, explaining that the 2010 vintage mixed 25 percent tempranillo, a Spanish-bred varietal, with France’s traditional Bordeaux reds.

To get this far in the process, Katy typically sets up five or six different samples in wineglasses.

“I try blends every which way I can imagine,” to be sampled in blind taste tests that typically include her, Milum and their tasting-room manager, Samantha Miller — or any friends who might drop by.

“Then it’s a democratic process and we vote, and whatever wins, wins,” she says, quickly adding, with a sparkle in her eye, “Unless I really think they’re wrong!”

Winemaking doesn’t get much simpler than this, or more personal. Quiet, intense Milum, 56, with his gray soul patch, built the winery and spends solitary hours working the 8 ½-acre vineyard. Katy, 50, the passionate chemist, formulates the wine. Smiling young Samantha pours and sells in their modern, art-decked tasting room.

Along with their wine club — made up of winery visitors who’ve liked the place, the people and the product and signed up for periodic shipments — the tasting room is where they sell more than nine out of 10 of the 2,000 cases of wine Tildio produces each year.

They’re a small winery, and they’re happy staying small. It’s a formula that has helped many Washington wineries weather recent tough times — and has even seen numbers rapidly multiply through the bleak economy.

SINCE 2005, the number of licensed wineries in Washington state has more than doubled, from 360 to more than 770. Since 2007, while navigating the worst economic potholes, the industry leapfrogged in value from $3 billion annually to $8.6 billion across the state, according to a study released in April by the Washington State Wine Commission.

The second-largest wine-producing state after California, Washington has long been tickling noses among the wine-swirling cognoscenti. Now it’s attracted a spurt of big-wine money. In recent months E. & J. Gallo and other major players have bought prominent wineries here, and their deep pockets are now expected to promote Horse Heaven Hills syrahs and Walla Walla cabernets in distant states where Washington appellations still prompt a “huh?” from consumers.

While Ste. Michelle Wine Estates, the state’s largest producer, sells more than 6 million cases of its brands annually, here’s an eye-opening statistic about the Lilliputian scale of most of Washington’s winemakers: More than 700, combined, produce just 5 to 10 percent of the state’s output.

Most produce 2,500 or fewer cases, wine commission President Steve Warner estimates.

“These are people with a passion for wine, with a sort of pioneering artistic sense of purpose, and they’re just out there going for it,” Warner says of the “mom-and-pop” wineries, whose proprietors are a mix of young and old, from many walks of life.

Everyone knows the failure rate for small businesses. Yet when you drive across Washington’s warmer side, tasting rooms now seem to outnumber fruit stands and taco trucks. How has Washington supported so many wineries in bad times?

Small, it seems, is the secret.

STAYING SMALL has several advantages. Winery proprietors can do much of the work themselves, holding down expenses. They can sell most of their wine directly to consumers, as the Perrys do, with relatively little spent on promotion and no big cut going to distributors and retailers.

What’s more, they keep a personal link to the wine that plays almost as much a part in the wine’s “terroir” — that mystical French term that roughly means “geography you can taste” — as does Central Washington’s sandy soil and sun-baked hills.

“We can stay at a size that feels comfortable,” Milum Perry explains. “It’s more of a European lifestyle, creating something on your own land, selling it there and staying connected, doing the labor yourself.”

And for the consumer, “it adds a whole other dimension to the enjoyment of wine when you can go in and meet the people who make it and get to know them,” says the wine commission’s Warner.

Soon after the 2005 opening of Tildio (say “Til-DEE-oh,” the Spanish name for a killdeer that lays its eggs in the vineyard), Milum and Katy learned the advantage of so-called “cellar-door sales” versus trying to self-distribute their wine in Seattle, a seven-hour round trip across the Cascade Mountains.

“We’d load up our car with some wine and drive over and do cold calls,” Katy recalls with a humble shake of her head. “We’d say, ‘There’s a wine shop, let’s stop!’ And we’d drive around ’til the car was empty.”

It was a recipe for burnout for a couple who had a vineyard to manage and wine blends to fuss over. Today, a Kirkland-based wine broker who caters to small wineries helps get their wines into about 20 shops and 10 restaurants around Puget Sound, at less cost than a distributor.

“Seattle has tons of restaurants that want really interesting wine lists,” Katy says. “But we’re not with a large distributor. We’d just be lost in their book. We can’t do the volume.”

The tasting room, with a built-in visitor base of vacationers who’ve been coming to Lake Chelan for years, is their anchor.

WHICH CAME first, the small winery (think “egg”) or the bad economy (think “chickens coming home to roost”)? For some, that’s the question.

Before the downturn, Brett Isenhower, of Walla Walla’s Isenhower Cellars, was selling 4,500 cases of wine through distributors in 17 states and British Columbia.

But in 2008, the former Safeway pharmacist recalls, he retrenched when gas prices started rising and many wine drinkers stopped spending more than $25 for a bottle of wine — roughly the price point where small winemakers make money on premium reds.

“It was a real quick ‘Hmmm!’ ” says Isenhower, a square-jawed, energetic 44-year-old father of three young girls who help Daddy by drawing pictures for his wine labels.

“Some of my compatriots decided the answer was to work harder. I decided I’d rather be at home than flying to Kansas City to sell wine.”

He pulled his premium wines from distributors, selling them only through his wine club and his winery, a handsome contemporary building out past Yellowhawk Creek on the south side of Walla Walla, where the Blue Mountains and their sculpted foothills mark the horizon and Lucy, a 12-year-old golden lab, barks you to the door.

As a hedge, he’s kept a mix of his second-label whites and rosés — less expensive wines that sell better in hard times — in the hands of distributors in five states.

But his biggest move was westward — to Puget Sound. Striking back at those gas prices that might discourage visitors from driving across the state to try his wine, Isenhower opened a Woodinville tasting room in 2009. More than 75 of the state’s wineries now have Woodinville addresses, though few grow grapes of any consequence there.

“That’s where most of the people in the state are, on the west side, and people can come, taste wine and go home at night,” Isenhower says. “It’s been our biggest source of growth.”

Taking a break last March from pruning his estate vineyard, four acres of malbec vines on land that formerly grew onions and alfalfa, Isenhower told me the figures without looking: His 2011 sales grew 18.2 percent year to year in Woodinville, versus 2.4 percent in Walla Walla.

“We had our best year ever in 2011,” he says, making more money, with production this fall pegged at 2,700 cases, than he did when wholesaling his best wines across a much more vast territory.

“It’s a very strange dichotomy,” Isenhower says. “People come to my tasting room and taste the wine and they buy into who I am and they maybe join the wine club. But if you just put the wine bottle on a shelf at QFC or someplace, they don’t have that connection — they don’t want to pull that trigger.”

IF WALLA WALLA’S tough to get to, Lopez Island Vineyards in the San Juans has its own special challenges. Not only is the winery a ferry ride away from the rest of the world, its estate-grown grapes must ripen in the cooler marine air of Western Washington. Vitis vinifera, meet the land of the green tomato.

On an early August stroll through the six-acre vineyard off Fisherman Bay Road, I saw pea-sized “berries,” much smaller than the developing grapes I’d found in Central Washington weeks earlier.

But husband/wife proprietors Brent Charnley, 55, and Maggie Nilan, 54, have their own marketing tool chest to keep the winery going in these days of “so many labels that you can buy a different wine every night of your life and not look back,” as the bearded, low-key Charnley puts it.

Niche markets help. The cool-climate white varietals they started planting 25 years ago, once a marketing handicap in days when less-experienced wine consumers expected every winery to make big, bold reds, are now a boon.

“It’s become a great advantage now because so few people have them,” Charnley says, as more-sophisticated wine lovers now seek out the unfamiliar.

Their flagship wines are island-grown Madeleine Angevine, a crisp “seafood wine” that originated in France’s Loire Valley, and German-bred siegerrebe, a spicier cross of Madeleine Angevine and gewürztraminer. Those and a few other estate-grown grapes make more than half of their annual 1,500 to 2,500 cases, with the balance from Eastern Washington vineyards.

Another advantage for Lopez these days: It’s an organic vineyard.

Being organic opens doors to natural-food stores such as PCC Natural Markets. And the winery’s proximity to Puget Sound put its wines on the table this past summer at The Herbfarm restaurant’s “100 Mile Dinner,” an obsessive-compulsive locavore’s dream meal (for which even the salt was locally sourced, from seawater).

Being small, organic and relatively nearby have also made Seattle-area farmers markets a logical outlet for the Lopezians. This year Nilan often staffed a stand at markets in Ballard, Edmonds and Lake Forest Park, fitting in the stops during visits with the couple’s daughter, who goes to school in Seattle.

“The very first day I was in a farmers market I sold five cases, and we thought, ‘OK, let’s do this!’ ” says the friendly, frank-speaking Nilan, noting that subsequent sales slowed considerably. On the same trips, she delivers wine in the winery van. It’s very much a hands-on business.

Sometimes there’s a down side to being so personally involved, she admits.

“It’s not enough that we do what we do (to make the wine) but we have to engage with each and every person who comes up to us if we want to sell wine. In the grocery store, people ask ‘How are the grapes?’ ” With a mock snap, she says, ” ‘Fine!’ I tell them ‘They’re fine!’ It’s just wearing to be ‘on’ all the time.”

CARVING OUT market niches is the core business plan for Tanjuli Winery, which opened in summer 2011 amid an emerald patchwork of orchards and vineyards in the Rattlesnake Hills above Zillah in Yakima County.

Niches don’t get much smaller.

On seven acres, soft-spoken Tom Campbell, a pioneering Yakima Valley winemaker who worked for Ste. Michelle in Grandview in 1981 and had Horizon’s Edge winery through the 1990s, has planted a few rows each of a dozen Old World varietals little known to most Americans.

On a muggy, 88-degree July day (“Perfect grape-growing temperature!” Campbell enthuses), with Mount Adams lurking in haze to the south, he walks rows and shows me his picpoul, a high-acid French white “that’s good with sushi”; teroldego, “a nice medium-bodied red from Italy”; carménère, “called the missing Bordeaux variety — I like it just because it’s something different.”

He has so many varietals with so many different watering needs, he manages irrigation with a spread sheet. High poles among his trellises can hold shade screens to help give each grape the sun exposure it prefers.

“I can fuss over a small block (of grapes) the way a large operation wouldn’t have the time or patience to do,” says Campbell, 59. Confessing to being temperamentally ill-suited to retirement, he sees this as a fun pastime for his old age.

He believes staying small is key.

“There are two areas of success: the small family winery and big mega-wineries. And the middle ground is quicksand.”

It’s all about the perilous balance between hiring more hands, buying more crushers and expanding bottling lines, and depending on outside sales to pay off the bills.

I ask Campbell what he likes best at his winery, expecting him to name a favorite grape. Rather, his heartfelt answer goes to the core of why many winemakers love what they do.

“My favorite thing is harvest — when you finally bring in the fruit of your labor. It’s a perfect time, with crisp, cool nights but still nice days.”

He pauses, lost in thought.

“There’s the camaraderie, the sights and sounds and smells. It’s wonderful.”

It’s a story of small joys.

Brian J. Cantwell is The Seattle Times Outdoors editor. Benjamin Benschneider is the Pacific NW magazine staff photographer.