The Columbia Gorge, a Blossoming Wine Region

The Columbia Gorge, a Blossoming Wine Region

by Karla Castillo

May 6, 2016

Oregon is quickly gaining notoriety as a destination for fine adult beverages. Oregonians' consumption of alcoholic drinks has increased over the last few years increasing to around 39 gallons per capita in 2014 from 37 gallons in 2010. Oregonians are now seen as one of the top consumers of beer and wine.

According to the Wine Institute, Oregon was 13th in terms of the largest wine consumers in the country with approximately 4.35 gallons per capita a year, equivalent to 22 bottles, or around one and a half bottles of wine a month. The 2014 per capita consumption in Oregon was not only higher than the overall U.S. per capita of 3.41 gallons a year, but it also grew around 6 percent from the previous year. Production is not only driven by the local demand, Oregon's alcohol exports reached an all-time high in 2015.

Oregon, an Important Wine Grape Supplier

Local production of beer and wine represents an important share of total domestic consumption and it is a driver of the beverage manufacturing industry in Oregon. As reported by the Oregon Liquor Control Commission in 2014, local beer and local wine represented 20 percent and 22 percent of total taxable consumption, respectively. After two consecutive years with double-digit growth rates, locally produced beer continued to increase, adding 4.3 percent in 2015. Wine also had a favorable growth rate in 2015; after a couple of years of modest demand, sales of wine grew by 3.6 percent.

Oregon wine grape growers are now important national suppliers. In 2014, Oregon ranked among the top five largest producers of grapes in the United States. The wine industry's recent growth can be attributed to an increased awareness of the quality of Oregon grapes, an increase in popularity as a casual local drink, and an increase in acreage coupled with higher yields per acre. According to Southern Oregon University, acreage increased to 27,390 from 23,955 in 2013. Oregon grapes are now recognized both nationally and internationally, winning several best in class awards at the recent Los Angeles International Wine Competition. Specifically, the pinot noir variety has been ranked among the best wines in the world.

There are five traditional growing regions in Oregon. North Willamette Valley is the largest in the state, followed by the Rogue Valley, Columbia River, South Willamette Valley, and Umpqua Valley. The "Columbia River" region is defined by Southern Oregon University's Research Center to include the following areas: Columbia Gorge, Columbia Valley, Walla Walla Valley, and Snake River Valley.

The Columbia River region has expanded and diversified over the last couple of years. The acreage increased from 1,770 in 2011 to 2,209 in 2014. This region had a higher growth rate of production and yield per harvested acre than the state as a whole. The number of wineries has also increased from around 30 wineries in 2010 to 48 wineries in 2014. The number of vineyards also increased from 55 in 2010 to 107 in 2014. In 2014, the Columbia River grape production was around 8 percent of the state's total production, up 3 percentage points from 2004.
The Columbia Gorge, a Nascent Wine Industry

The Columbia Gorge American Viticultural Area consists of four counties: Hood River and Wasco on the Oregon side of the Columbia River and Skamania and Klickitat counties in Washington State. The Columbia Gorge region is of particular interest to wine growers for many reasons. The diverse topography of the region opens up microclimates within these regions that are highly suitable to world class wine production. The microclimates include vast differences between precipitation and temperature between regions, creating a beautifully unique setting for fine wine.

This topography not only helps produce fine wines, it also drives a large demand for tourism. In turn, the activities lend themselves to a young vibrant population that has a thirst for fine alcohol. Hood River and Wasco counties also have a higher percentage of younger consumers between the ages 21 and 24 years old. And as it has been showed in other studies, younger population has succeeded in replacing and surpassing the demand created by the baby boomer population.

Employment in the Gorge

By February 2014, the U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB) reported 27 permitted wineries in Hood River and Wasco counties. As with vineyard employment data, Oregon Employment Department (OED) records reflect only those businesses participating in the Unemployment Insurance (UI) program. In 2014, OED reported 14 wineries. The discrepancy in establishments reported is caused by the relatively large proportion of small and family-owned wineries and vineyards in Oregon and the use of contract labor.

According to the most current employment data, in 2015, the average annual number of jobs in wineries and vineyards in the Columbia Gorge region, including the Washington counties, was 526 with 187 of those jobs located in Hood River and Wasco counties.

The wine industry has seen a nearly threefold increase in jobs, from 74 jobs in 2010 to 187 jobs in 2015 in the Columbia Gorge alone. Employment in wineries and vineyards in the Columbia Gorge has changed from representing around 3 percent of the state's wine industry employment to 5 percent in 2014. Wineries and vineyards in this region accounted for $4 million in payroll in 2014, having grown by about 44 percent from 2012. Although not the largest employer in the region, the wine industry added 98 jobs from 2010 to 2014, with a much higher growth rate than the state.

Looking Ahead

Overall there is a lot of potential for vineyard growth and expansion in the Columbia Gorge area. The microclimate is suitable for cultivation and tourism. The young, vibrant population is driving up consumption, and there are strong links with other industries like tourism, leisure and hospitality. It is likely that the industry will continue to add wineries and new jobs in the future and continue to compliment other industries in the Columbia Gorge region, creating an overall stronger economy.