Sean P. Sullivan - Washington Wine Report Note: Site has moved to www.northwestwinereport.com

WeatherEye currently works with 10 hand-selected wineries, with many more clamoring to access the fruit. The choice of Alexander to craft the estate wines was both inspired and an easy one. Johnson had been working on the nearby Force Majeure project but was ending his tenure right as Alexander was starting at that winery.

“He's a top tier winemaker, making wines at the highest level,” Johnson says of Alexander. “I think there was this mutual drive to be able to work together at some point.”

Meanwhile Alexander’s interest in working with WeatherEye fruit only increased as he saw the vineyard come to fruition. “It's an incredible amount of work, and a lot of thought has gone into it,” he says of the site.

The first WeatherEye estate wines were made in 2018, with a Syrah and Grenache at a mere 140 total cases. That expanded to a still-meager 400 cases in 2019. The 2020 production will be double that, with white wines added to the program.

Below is a description of the 2019 releases from the eyes of the people who helped create them. My scores for these wines from my time at Wine Enthusiast are at the bottom of the article.

WeatherEye Estate Grenache Red Mountain 2019

“This is really a unique mesoclimate,” Johnson says of the spot these vines are planted. “It's a little, sandy basalt outcrop. The way that outcropping works is it almost acts as its own wind shelter. You have these screaming winds hit the upper slopes of Red Mountain, and it'll go right over the top of this block.”

The entire block, which is called ‘La Mesita,’ is 0.3 acres, planted at a high density of 3,200 vines per acre. The vines are planted using a goblet training system.

“The soils really thin out just to the north of [the block],” Johnson says. “That's why it's 0.3 acres. We certainly use every last little square foot.”

WeatherEye Estate Syrah Red Mountain 2019

The 2019 Syrah is a blend of two different blocks. One is composed of the highest vines planted on Red Mountain at an elevation of 1,230 feet. The other block is planted meter by meter sur echalas – on stakes.

“It's got the highest elevation vines but also the highest vine density,” Johnson says. “It’s just a match made in heaven.”

One of the blocks is on the northeast side, which is unusual for Washington. The other is southwest facing. The blocks are 0.5 and 0.4 acres in size.

“Those are picked separately and vinified separately, and then we put a blend together at the end,” Alexander says.

WeatherEye Estate Mourvèdre Red Mountain 2019

Mourvèdre is only planted in miniscule amounts on Red Mountain – eight total acres as of the 2017 state acreage survey, the most recent that was conducted. The block this wine came from won’t tip the scales, as it is only 0.9 acres.

The block is located along the ridgeline of Red Mountain at an elevation of 1,200 feet, where the soils are fractured basalt. The vines are planted as bush vines.

“The Mourvèdre has been a real eye opener,” Johnson says. “Our approach to viticulture is we want to express the savory notes, the non-fruit elements, and I think we hit it with [this wine].”

WeatherEye Estate Tempranillo Red Mountain 2019

The 2019 Tempranillo also comes from vines planted on the north side of the mountain. Johnson says he treats the Tempranillo viticulturally like he does Syrah.

“It’s sur echalas training, high density,” he says. Johnson gives a descriptive take on the inaugural vintage.

“The Tempranillo is like sucking on the Grim Reaper's cloak. It's dark, it's slightly dangerous, and it's mysterious. I opened that the other night, and it just grabbed hold of my psyche. It was really one of those intellectually stimulating wines because it's not what you think it would be.”

The final red wine from 2019 is the Hillfighter, a blend made from declassified barrels that will change from year to year. It’s one of those “If this is what the declassified stuff tastes like, I’ve got to try the other wines” bottles. Of note, all of the label images were taken by Ryan Johnson.

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“The number one objective for me [when I became general manager] was estate vineyard development,” says McDaniels, who joined the winery in 2014. The goal for Doubleback has been to include different pieces of terroir from across Walla Walla Valley. “This was kind of the missing piece,” McDaniels says.

Despite the large amount of new acreage, McDaniels says production will not expand dramatically. Rather, estate fruit will be used to replace existing contracts. Production will increase slowly over time. Doubleback is well on its way to being completely estate focused.

“To be able to be really, truly an estate grown Cabernet now with Doubleback and have completely different terroirs to go into that wine has been just really rewarding and gratifying and exciting,” McDaniels says.

With its increased property, the winery also now has its own dedicated vineyard crew. The crew is employed year-round, has full health insurance, and has full retirement benefits.

“I can't talk enough about how positive that's been for all of us, that cultural shift with our crew and our employees,” McDaniels says. “Our business is to create genuine happiness for ourselves and our customers. That's it. All of our employees are part of that. Wine happens to be the medium that we get to give that experience to people.”

The Schafer family established àMaurice Cellars in 2004. Over the years, guided by winemaker Anna Schafer Cohen, the winery became known in large part for its Viognier, Malbec, and Bordeaux-style blends. The àMaurice 2010 Boushey Vineyard Grenache remains one of the finest examples of this variety I’ve ever had from Washington.

àMaurice stopped making wine in the 2019 vintage. The Schafer family will retain the name àMaurice Cellars and current inventory. The family will continue to sell the wine it has.

“We are elated to be passing all our hard work and vision, which has been intensely emotional and personal, to another true family enterprise,” the family said in an email to its customers. “We will miss our sweet vineyard, yet we are grateful that the Bledsoe and McDaniels families will carry on our legacy.”

Image by Richard Duval. 

“Our focus for the future is on premiumization, like everyone else at the moment,” Dearie explains. “[When we looked at where to get growth from], we had a list of potential acquisitions that may or may not be available that fit into the profile, and A to Z/Rex Hill were right at the top of the list.”

A to Z/Rex Hill might have topped Ste Michelle’s wish list. However, they were not necessarily available.

“We were never interested in selling,” states Prosenjak. “We were interested in finding good partners.”

While Ste Michelle was looking for growth opportunities and A to Z/Rex Hill for a partner, the acquisition was ultimately kindled by one simple spark. Both companies have a relationship with lender Bank of the West.

“Our banker brought the two parties together and said, ‘You know, maybe something could happen here,’” Prosenjak recalls. “When we sat down and had the first conversation with David and the team, we could just see the synergies.”

Ste Michelle’s expansion in Oregon

Ste Michelle made its first foray into Oregon in 2006 when it purchased Erath, one of the state’s founding wineries. The company has since grown that brand from approximately 70,000 cases to 300,000 cases annually. While Dearie says Erath continues to have growth potential, A to Z – one of the largest wineries in the Oregon – gives the company much more. Additionally, the Erath and A to Z wines taste different.

“They're both from Oregon, but they're very different in the look and feel and their flavor profile,” Dearie says. “So we see them as complimentary even though they compete on the shelf.”

At an annual production of 7.3M cases across all its brands, SMWE has long been the largest winery in Washington, headlined by Chateau Ste Michelle, 14 Hands, and Columbia Crest. With the acquisition of A to Z and Rex Hill, SMWE now becomes the largest winery in Oregon as well according to the company. The combined production of Erath, A to Z, and Rex Hill will be 700,000 cases. Moreover, Dearie believes that wineries in both states are positioned to grow – and Ste Michelle along with that.

“We see tremendous growth opportunities from Washington, and we're very well positioned to be able to take advantage of those growth opportunities at various price points,” he says. “We see the growth of Oregon. We think there's a long-term potential. This acquisition gives us the opportunity to grow both.”

A year of change at Ste Michelle

The acquisition comes after a year of transition for SMWE. The company itself was purchased by Sycamore Partners, a New York based private equity firm, last year for $1.3B, with the deal completed in October.
At the time, some feared that Washington’s founding winery might be sold for parts and quick profit. However, Sycamore’s investment in Ste Michelle with the purchase of A to Z and Rex Hill would seem to indicate both companies are playing the long game.

“Obviously Sycamore is coming in as a private equity group. They will be looking to get growth,” Dearie says. “They're prepared to invest behind the portfolio and the brands to achieve that.”

Sycamore’s belief in the potential of the winery is due to the long-term strategy that Ste Michelle presented when it was looking for a buyer.

“We put a very simple strategy in place, which is fix, build, buy,” Dearie says. “Fix some of the challenges we’ve had; build on the core brands that we've got; buy where we see opportunities. Our intent is to grow and grow at the premium end. [The purchase of A to Z and Rex Hill] is just an extension of that strategy.”

Prior to Sycamore purchasing the company, Ste Michelle had made a number of acquisitions over the years. Most recently, the company purchased Sonoma’s Patz & Hall in 2016.

However, this is the company’s first acquisition since the Sycamore purchase and since Dearie became CEO in October of 2020. It is also the first since the winery hit a rough patch, with a decrease in production of 1.2M cases per year between 2016 and 2020. In 2020, former owner Altria announced a $292 million inventory write-off and $100 million in losses on non-cancellable grape purchases.

Since the purchase by Sycamore, Ste Michelle has made a number of changes. Some of those have come on the corporate personnel side, such as recently appointing Andy Feuerstein as senior vice president of national accounts on/off sale. Others have come in distribution, such as announcing a strategic partnership with Southern Glazer’s Wine & Spirits. The company also made several changes to its winemaking team last year and this year.

“Sycamore bought the business less than a year ago. We've done quite a bit in that year,” says Dearie. “We managed to close down Woodinville [wine production], and then we've got a distribution contract with Southern. We've now bought A to Z. So it's been a busy 12 months. Hopefully the intent is people see that we're in this for the growth and for the good of the Pacific Northwest wine region in general.”

Plans for the Woodinville property

While Ste Michelle’s purchase by Sycamore initially caused trepidation in some corners, those concerns were heightened when Ste Michelle put its Woodinville property up for sale in whole or part earlier this year. However, Dearie says any potential changes to the property would be both pragmatic and in the best interest of growing the brand.

“We're not in any need to move anywhere,” Dearie explains. “We're just looking to see what have we got and what can it be worth, and the intent is for us to invest behind our brand building efforts.”

Ste Michelle made the decision to list all or part of the property for sale after moving its white wine production to eastern Washington starting this vintage. Red wine production has long taken place there.

“We have got to be good stewards of the land, and we're focused on that,” Dearie says. “When we started to look at the amount of diesel that we were using to bring grapes backwards and forwards, it made much more sense to have those wines processed in eastern Washington where the grapes are grown.”

The exploration of whether it could sell part or all of its Woodinville property was a natural follow on to that decision.

“Like anything else, we’ll explore all of the options, but if we don't like any of the options for the site here in Woodinville, we won't take any of the options,” Dearie says. “You've got to look at where the best places to deploy capital are. We've got some assets, like part of the Woodinville site here, that is excess to our needs, and if we can redeploy the capital in there, we should.”

Dearie says he doesn’t expect moving production and potentially selling parts of the property that were used for that purpose to negatively impact consumer experience at the winery.

“The consumer is coming to the Woodinville site not to see the winemaking production facilities. They’re coming here for the consumer experience of tasting wine, sitting on the lawn, watching the concerts. What we want to do is give more wonderful experiences to consumers who come into the site.”

What’s next for the A to Z/Rex Hill team

While some recent winery acquisitions in Oregon have been influenced by the 2020 vintage where wildfire smoke drastically reduced production at many wineries, A to Z/Rex Hill’s Amy Prosenjak says that was not the case here.

“It was really about the future rather than anything that had happened in the past,” she says.

Prosenjak will join the Ste Michelle team as President of Oregon Brands. “When you take Erath and A to Z and Rex Hill, you have these three great brands that you can provide distinct flavor profiles, distinct wines, distinct price points, [and] distinct brand stories,” she says. “It gives you a lot of options out there to our great consumers.”

Founding partners Deb Hatcher, Cheryl Francis, and Sam Tannahill will join Ste. Michelle as consultants. Michael Davies will continue as executive winemaker. Bill Hatcher, another founding partner, is retiring as chairman of the board for A to Z. Otherwise, consumers should expect more of the same. All in a newly renovated tasting room. 

“A to Z’s premise has always been ‘Try Oregon for $20. Try it tonight. And if you like it, maybe you'll buy the next great $50 bottle that you come across from Oregon,’” Prosenjak says. “That’s what it was from the beginning and still is today.”

The power of Oregon Pinot

The acquisition of A to Z/Rex Hill makes SMWE the largest producer in Oregon. This also sets the winery up well for what many expect to be the two biggest growth categories of the next decade – Oregon and Washington. It also clearly shows the power of Pinot Noir in general at present, and Oregon Pinot Noir in particular.

“Pinot is a hot varietal right now,” Dearie says. “And we've got two core brands with A to Z and Erath which are very different styles and then a more premium one with Rex Hill. So we think we've got to the best of all worlds where we can we can speak Oregon from multiple different styles in flavor, profile, and processes. I think that's really quite exciting.”

As the company continues to grow these brands, it’s a message Ste Michelle can take not just around the country. With an international sales team, it’s a message that Ste Michelle can take around the world.

“I think Oregon is renowned for making fantastic quality, particularly Pinot Noir, Pinot Gris, Chardonnay, and sparkling [wines],” Dearie says. “And the consumer recognizes the quality that comes out of Oregon, and we see that as well.

“We’re hoping to be able to continue with that legacy and to make Oregon stronger, to take Oregon not only across the US but then ultimately into some selective international markets so folks can taste these great Oregon wines.”

 

Why was it so cold and wet?

What caused these conditions? The main culprit was a broad trough of low pressure that was anchored over the Northwest for much of April and parts of May. This pattern tends to steer wet and cold weather systems into Washington.

Also, we had La Niña conditions that persisted through the spring. Simply explained, La Niña is below normal sea surface temperature anomalies off the equatorial waters of South America. This pattern usually brings below normal temperatures and above normal precipitation for much of Washington.

The map below shows the cool waters off the coasts of South America and Western US (in blue, credit NOAA). In fact, La Niña strengthened this past April. Several meteorologists have suggested that this contributed to the cooler temperatures for Washington.

 

Impacts for Eastern Washington

Given the cold wet start to the growing season, it is no surprise that Growing Degree Days (GDD) in the Columbia Valley were below normal during the spring and early summer (GDD is a measure if heat accumulation; it is the average temperatures over 50 from April 1st to October 31st). You can see from this Washington State University GDD graph that 2022 started well below the long-term average before slowly moving up toward it.

 

Focusing on two regions with readily available data, Walla Walla and Prosser, we see similar trends. The GDD for 2022 is the green line shown below (charts below from Applied Climate Information System ACIS- NOAA). For both regions, you can see through mid-July, the line is close or equal to the red line, which represents the lowest GDD that occurred in 1955. As the season progressed, warmer temperatures moved Growing Degree Days closer to historical averages. Here, the long-term average is shown as the brown line.






The rainfall chart below for Walla Walla indicates that current precipitation (the green line) was close to the wettest period on record (the blue line) from April to July. Prosser has a similar trend. However it was wetter than the wettest period on record.






Warmer summer temperatures arrive

While the 2022 growing season started out cool and wet, warmer weather in July through mid-August moved Growing Degree Days closer toward the long-term average.

In July, Prosser’s average temperature was 3 degrees above normal. Through August 18th, it is 1.8 degrees above normal. For Walla Walla, July was 1.3 degrees above normal, and through August 18th it is 1.8 above normal.

Will the recent warm pattern continue for the rest of August? Several forecast models suggest well above normal temperatures for the remainder of the month. The map below shows expected temperatures from August 18th to September 1st will be 7.2F (4C) warmer than average (credit to Tropical Tidbits).

As noted recently, many growers currently report being approximately two weeks behind recent years in terms of development. It will be interesting to see during the rest of the growing season if this warming trend continues and if GDD can approach closer to the long-term average.

 

Looking ahead

Many are also wondering what September might look like. This is more difficult to say. The extended temperature forecast out to 14 days generally can be accurate. However forecast out to 30 days are less so.

For these extended 30 day outlooks, many meteorologists look at the Climate Forecast System (CFS), which is data from NOAA. At present, the outlook for much of September is temperatures will generally be above normal.

However, there are several cooler air masses that will briefly move for cooler temperatures. The map below indicates below normal temperatures for September 14th (from Pivotal Weather; 2 meter AGL is temperatures 6.6 feet above ground level).

In this case, temperature in dark blue is forecast to be 10 degrees below normal. However, according to the CFS forecast, this cooler system should be short lived.

In truth, only time will tell exactly what September holds.

Each year the Auction has recognized an honorary grower and vintner. This year the Auction expanded the award program and created an event to celebrate honorees, taking place on August 11th. 

Auction executive director Jamie Peha wrote “This evening we recognize individuals and organizations who have given the best of themselves to ensure the on-going success of the industry. From those who have put Washington state on the world stage to get us to where we are today, to the next generation who will build on these successes and lead us into the future.” Recipients were nominated and final selections were made by a judging committee of industry peers.

Congratulations to the other individuals who were recognized: Bob Betz (Lifetime Achievement Award); Dick Boushey (Award of Distinction); Kevin Corliss (Honorary Grower); John Bookwalter (Honorary Vintner); Chateau Ste Michelle (Auction of Washington Wines Star Award); Washington Winegrowers (Healthy Land, Healthy Communities); Senator Kurtis King and Representative Larry Springer (Martin Clubb Washington Wine Hero Award); Patrick Rawn (Vine to Wine); Lacey Lybecker, Sadie Drury, Andrew Januik, and Shae Frichette (Emerging Leaders); and honorary chairs Marchese Piero Antinori (Marchesi Antinori SpA), Renzo Cotarella (Marchesi Antinori SpA), and Marvin Shanken (Wine Spectator).

Below are the remarks that I prepared in accepting the award. To those in the industry who weren't at the event, these words are for you. What I said at the time varied slightly, but both came from the heart.

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It’s a long time ago now, but in the year 2000 I moved to Seattle from Boston, leaving behind a career in medicine and research. I can honestly say I had no idea what I was going to do next.

If you had told me then that pretty soon I would be spending all my time writing about Washington wine, I would never have believed it. I didn’t even know Washington made wine and didn’t know anything about wine other than I liked to drink it occasionally. If you told me that today I would be standing here in front of you all receiving an award for that work, I wouldn’t have believed that either.

But almost immediately after moving to the Northwest I began a love affair with Washington wine. I was captivated by the youth of the region and by the sense of possibility.

I was captivated by the quality of the wines I was tasting, yes. But most of all I was captivated by the people, their stories, and their passion for what they were doing.

So in 2004 I started writing about and reviewing wines under the name Washington Wine Report. Today, 18 years later, I continue to be driven by people growing, making, and marketing wine in this state. By the people who have made Washington’s industry what it is today and what it will be tomorrow.

And that is all of you. The truth is, I would not be up here today if it were not for each of you.

You inspired me when I first moved out here 22 years ago looking for a new direction in my life. You continue to inspire me today. Not just the wines you make but the people that you are.

You are truly the ones deserving recognition. I have merely been the messenger telling your stories. But telling those stories has been the greatest privilege of my life.

Thank you all for letting me into your cellars, for walking with me in your vineyards, and for sharing your stories and your passion.

Thank you for listening to me talk endlessly about cork taint, wine temperature, and smoke impact. Thank you for letting me ride along with you on the journey of Washington wine.

I want to thank my wife Annie for her love and support. I also want to thank my friend Patrick Skillings who unknowingly launched my wine writing career by sharing my reviews with some friends. Thank you to the people who nominated me for this award. I’m truly grateful.

Please, keep making the wines and I promise to keep telling your stories and keep championing Washington wine. Thank you so much!

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Pictured here from left to right: Curtis King (Senator, Washington), Shane Collins (Washington Winegrowers), David Dearie (Chateau Ste Michelle), Kevin Corliss (Ste Michelle Wine Estates), Lacey Lybecker (Cairdeas Winery), Andrew Januik (Januik, Andrew Januik), Larry Springer (Representative (Washington), Patrick Rawn (Two Mountain Winery), Bob Betz, MW, Dick Boushey (Boushey Vineyards), Shae Frichette (Frichette), Renzo Cotarella (Marchesi Antinor SpA), Vicky Scharlau (Washington Winegrowers), Sean Sullivan (Washington Wine Report), and John Bookwalter (J. Bookwalter). Picture by Annie Sullivan.