Willamette Valley Conjunctive Label Law Is a Mistake

According to a recent story by the Portland Oregonian’s wine writer Michael Alberty, winemakers and winergrowers in Oregon’s Willamette Valley, home to some of the best Pinot Noir produced anywhere in the world, are likely to support a bill that would require Conjunctive Labelling to support the larger Willamette Valley AVA. I think this is a mistake.

Conjunctive Labelling Laws require that a winery place the name of a larger recognized winegrowing region on their label even when the grapes they used to produce the wine come only from a smaller federally recognized wine growing region inside the larger region. For example, wines made exclusively with Howell Mountain grown grapes must carry the term “Napa Valley” on their front label because a law was passed requiring it.

Most recently a law was passed that requires that wines produced with grapes grown in a sub-AVA of Sonoma County and carrying the name of that sub-AVA on the label also carry the wording “Sonoma County” on the label. So, Pinot Noir made from grapes grown exclusively in the Russian River Valley must also name “Sonoma County” on the label if they want to use the term “Russian River Valley” on the front label.

Conjunctive Labelling can only be instituted in states if a law is passed by its state legislature.

According to Alberty:

A growing number of wineries are leaving the Willamette Valley name off their labels. Instead, they list the name of their sub-area, an area within the Willamette Valley designation where winery and vineyard owners decided their patch of land merited its own recognition. Willamette Valley sub-areas include Chehalem Mountains, Dundee Hills, Eola-Amity Hills, McMinnville, Ribbon Ridge and Yamhill-Carlton. 
….
“Consumers are very interested in the origin of the wine and the integrity of labeling,” Landon says. “The Willamette Valley is known for high-quality wine all over the world, and by omitting it from our labels, we aren’t giving the consumer the specific context of where the sub-AVAs are located.”
….
[David] Adelsheim proposes requiring wineries to list the words “Willamette Valley” on their label if they also include their sub-area. For example, a bottle of Dundee Hills pinot noir would have to have “Willamette Valley” listed somewhere on the front or back label.
….
The benefits of this “conjunctive labeling” were demonstrated in a recent study at Sonoma State University. After Sonoma County wineries were required to include “Sonoma County” on the label in addition to any Sonoma sub-area, the study’s authors found a significant increase in consumer awareness of both the Sonoma County area and its sub-areas. “In other words,” Landon says, “it’s a win-win for everyone.”

My problem with conjunctive labeling is that it amounts to theft. I’ll explain this below. But for the moment, I want to address the notion that a recent study cited in Alberty’s story by Erica Landon, Board President of the Willamette Valley Wineries Association, demonstrated that “After Sonoma County wineries were required to include “Sonoma County” on the label in addition to any Sonoma sub-area, the study’s authors found a significant increase in consumer awareness of both the Sonoma County area and its sub-areas.

I don’t think the study does this at all. Here’s why.

The study cited was carried out by the Sonoma State University’s Wine Business Institute. It sought to determine the Sonoma County Conjunctive Labeling law’s impact on consumer awareness of both the larger Sonoma County AVA and the County’s smaller sub-AVAs. The authors of the study concluded the following:

“The results show a higher awareness for both Sonoma County and its sub appellations (AVAs) after conjunctive labeling was introduced than before. This demonstrates the potential benefit of associating sub-regional appellations with larger wine regions.”

TIMING OF STUDY

There is a question as to whether or not Conjunctive labeling was in effect long enough for its impact, if any, to be felt by consumers. The requirement that “Sonoma County” be used on the front labels of all wines went into effect on January 1, 2014. By this date, all wines being sold had to have “Sonoma County” on the front label if the smaller Sonoma County AVA was also being used on the label. However, the survey of consumers that was at the heart of the study took place in  2016, giving consumers a mere two to two and a half years to absorb any impact of the conjunctive labeling law. Is this really enough time for the new law to have the impact the that the study’s authors suggest and that Landon enthusiastically cites?

AWARENESS OF “SONOMA” DOESNT MEAN “SONOMA COUNTY”

Among the questions the study asked of consumers was to name a wine region without any prompting. This would gauge the consumer’s overall awareness of wine regions. The authors of the study would then compare results with a previous survey taken in 2008 where the same question was answered.

“Sonoma” was the third most mentioned wine region in the 2016 study after Napa then California. However, it is highly unlikely in my experience that many of the consumers understand the difference between “Sonoma”, “Sonoma Valley” and “Sonoma Mountain”. In fact, in my experience, when the average consumer cites “Sonoma” in a wine context they most likely say “Sonoma Valley” for the simple reason that they believe “Sonoma” is a “valley” because the best known region to them, “Napa” also has a “Valley” attached to its name. My bet is that the vast majority of respondents in the 2016 survey that mentioned “Sonoma” probably mentioned “Sonoma Valley”. And the fact is, most of them probably could not identify the location of the actual Sonoma Valley” AVA on a map.

This is a flaw in the study.

Moreover, the term “Sonoma” was offered up by surveytakers less frequently in 2016, after the Sonoma County Conjunctive Labeling law was instituted, than it was in 2008, before the law was put into place. The whole point is to raise awareness of the Sonoma County brand.

INCREASE IN AWARENESS ISNT NECESSARILY ABOUT CONJUNCTIVE LABELING

In an attempt to gain more insight into consumers’ awareness of Sonoma County and its sub-AVAs, the authors of the study asked respondents to rank their awareness of various regions on a 1 (poor) to 5 (great) scale. The results were definitive. Consumers were more aware of all five regions named (Sonoma County, Russian River Valley, Dry Creek Valley, Carneros, Green Valley) in 2016 than they were in 2008, before the Conjunctive Labeling law went into effect.

However, we have no idea if this increase in awareness between 2008 and 2016 is due to the Conjunctive Labeling law or if it is, for example, just a continuing trend of greater awareness by consumers of American wine growing regions that was occurring even without the Conjunctive Labeling law.

Nevertheless, the study’s authors conclude:

“conjunctive labeling offers potential value as a marketing tool for use in other small regions, where positive connections can be made in the consumer’s mind to a larger region from which it is associated.”

The key word here is “potential”.

But here’s the important thing and the point that I think Willamette Valley winemakers and growers must consider. The awareness benefits of a Conjunctive Labeling law accrue to the larger region being forced on vintners. There is no good evidence however that wines and brands using only the sub-AVAs in the Willamette Valley, such as Dundee Hills, Chehalem Mountains, Eola-Amity Hills, McMinnville, Ribbon Ridge and Yamhill-Carlton, gain any value from placing “Willamette Valley” on their front labels.

CONJUNCTIVE LABELING LAWS AS THEFT AND UN-REWARDED TRANSFER OF VALUE

We know this much: Currently, wines from these sub-AVAs in the Willamette Valley demand a higher average price per bottle than wines labeled, simply, “Willamette Valley”. It’s noteworthy that it is currently possible for winemakers to place both the sub-AVA and the “Willamette Valley” AVA on their label if they choose too. When they don’t do this we are witnessing a marketing decision being made. The question that leads to that decision is this: Will the value of my wine be greater or lesser if I leave off the larger “Willamette Valley” AVA.

When forced, under a Conjunctive Labeling law, to place the larger “Willamette Valley” AVA on their front label alongside the sub-AVA, there is a legally-mandated transfer of value away from the winery to the larger “Willamette Valley” AVA. And without any compensation.

Even landowners whose property is requisitioned by a local government via eminent domain get a better bargain than this since they are paid fair value for the land the government wants. In the case of Conjunctive Labeling, there is no fair market value given to the winery forced to give up space on its label to another entity.

To this point, Alberty’s article quotes Landon and Ken Wright thusly:

“Consumers are very interested in the origin of the wine and the integrity of labeling,” Landon says. “The Willamette Valley is known for high-quality wine all over the world, and by omitting it from our labels, we aren’t giving the consumer the specific context of where the sub-AVAs are located.”

Wright concurs with this assessment, noting “people in China don’t know where Ribbon Ridge is, but they sure know where the Willamette Valley is located.”

Ken Wright, perhaps one of the most accomplished and celebrated vintners not merely in Oregon but the United States understands the value of Oregon’s sub-AVAs versus the “Willamette Valley” AVAs. That’s why on a collection of single vineyard wines he recently released from various sub-AVAs located within the Willamette Valley he does not place the words “Willamette Valley” anywhere on the front or back label. That was a decision of his based on marketing and brand value considerations.

My twenty-five years of helping wineries market and promote wines informs me that a winery having the choice to put a smaller or a more general or both AVAs on a label is an important marketing option to possess. This is particularly the case in a place like Oregon where wines tend to demand higher prices, where awareness of its smaller AVAs are now quickly increasing and where a far larger percentage of bottlings compete at a world class level.

Giving up this kind of real estate on a label in order to benefit the “Willamette Valley” brand comes with very little value to most Willamette Valley wineries UNLESS the winery in question is bottling large amounts of wines made with grapes grown in multiple sub-AVAs in the Willamette Valley. Put another way, a Willamette Valley Conjunctive Labeling law benefits the few larger Oregon wineries but harms the many more smaller, artisan wineries.

In expressing these opinions I don’t mean to suggest the Sonoma State Universtiy Wine Business study is poorly done or without value. The fact is that we don’t have any good information on the value or lack of value of conjunctive labelling. This study is a good start. What it is not is justification for imposing a Conjunctive Labeling law on Willamette Valley wineries and growers.

Posted In: Oregon, Wine Business

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14 Responses

  1. Rob McMillan - September 18, 2018

    Tom,
    We consistently see eye-to-eye on almost all things but this is where I will disagree. I don’t see this as theft between vintners in different AVAs. I see this as people within the Willamette trying to cooperate to gain greater recognition for the Willamette as a region – everyone rowing in the same direction. The producers all get an equal vote in this.

    Oregon unlike Napa and Sonoma is small and still an emerging wine region. (How many wine people even know how to correctly pronounce the Willamette name let alone Eola HIlls?) Napa doesn’t need this regulation because sub-AVAs are widely recognized by fine wine consumers already – though there was a day this was a topic in Napa too.

    The US consumers are just now discovering Oregon. So doing this better focuses limited resources and helps reinforce the message about the quality of wine being produced in the Willamette – not to the exclusion of the sub-AVAs, but as a starting space in understanding Oregon Wine. There will come a day when consumer will want to go deeper and will grasp the nuances of wine produced in the different sub-appellations.

    I’ve personally spoken with Ken Wright and David Adelsheim who are leading this initiative and without getting into specifics, I can assure you this is about trying to protect the quality and message for the small producers. In conjunction with this initiative, they are also trying to change current regulations that allow 15% of wine to be blended from outside the AVA, and still be called Willamette. They want to have 100% of the wine be produced from the Willamette to call it that. That’s something I wish Napa and Sonoma would take up too instead of allowing juice from Lodi, Mendocino, and Lake counties to be blended in and called Napa.

  2. Tom Wark - September 18, 2018

    Hi Rob…
    Yes, I saw the part about changing the regs on the percentage of wine. I get that and it makes sense. I’d be much more comfortable with the conjunctive labeling if it was voluntary. In that way, those vintners stay in command of the real estate represented by their labels. And that’s VERY important real estate that under this law is being co-opted.

    Now, if I were a larger winery that could only put “Willamette Valley” on my label, then I’d be all for this change as all the value flows to my wines.

    Also, I think you might be underestimating the visibility and awareness of the Willamette Valley.

    Finally, if the wineries are really interested in heightening the awareness of the Willamette Valley, I can think of a number of ways that they can do this by aggressively promoting the region and its wines and winemaker and growers without taking over real estate on the label.

    Love you when you take the time to comment.

  3. Mike McNally - September 18, 2018

    Tom – Thank you for your perspectives on the Willamette Valley Wineries Association’s (WVWA) initiatives on Conjunctive labeling and Exclusive Wine Content.
    It is helpful to note that you believe that changing the regulations on percentage of wine content makes sense.
    I believe you are interpreting the WVWA Conjunctive Labeling concept to be more limiting than currently proposed, The Concept for Conjunctive Labeling as stated in the Overview of Initiatives posted on the WVWA website states the following:
    “The reference to “Willamette Valley” would not need to be adjacent to the nested AVA name used in the appellation of origin, or in the same size or font.” In addition the words “Willamette Valley” could be on either the front label or back label. Hopefully this clarification mitigates your concern that the WVWA initiative on Conjunctive Labeling is a mandated transfer of value.
    Thank again for taking the time to reflect on these initiatives.

  4. Tom Wark - September 18, 2018

    MIke…First…Fairsing…Wow….GREAT wines.

    I usually wait to see legislation before assuming that’s how it will end up. Moreover, I wonder if allowing “Willamette Valley” to be smaller than the sub-AVA jibes with TTB regulations. That I’m not sure of. That said, if this legislation is approved as described, that is mitigation and surely welcome for those who prefer not to put Willamette Valley on their AVA.

    Thanks for weighing in!

  5. Cliff Anderson - September 18, 2018

    Here’s another angle on the mistake being made to require “Willamette Valley” on Oregon wines. In my 30 years doing national and international research on Oregon based brands (Nike, Blitz Weinhard beer, Tillamook Cheese, FlavrPak vegetables, etc.), we constantly examined the value of various place names (literally thousands of focus groups and hundreds of surveys). First, many consumers had no idea of where or what “Oregon” is (just north of California). However, if they could identify Oregon, the image was clean, green and positive.
    The Willamette Valley? Not a clue, but definitely hard to remember and extremely hard to pronounce – thus the “Willamette damnit” mnemonic device…never good to have to learn a trick to be able to create brand identity. Too many hurdles. The problem here may not be so much with the concept of conjunctive labeling but the execution. “Willamette” is a bad name choice: unpronounceable, hard to remember and lacking in positive associations. If we’re going to push an identity, at least leverage an existing association with established value. While still obscure to some “Oregon” has some cache and positive value. Forcing all our wineries to put the term “Willamette” on our label creates confusion and clutter. Why are we trying to exceed the already strict labeling requirements we have to meet? The only result is likely dilution of brand identity and increased confusion in an already crowded and cluttered market.

  6. Tom Wark - September 18, 2018

    Cliff,

    Is it really true that a large percentage of focus group people didn’t know where Oregon is? That’s hard to believe and if true…well…very depressing.

    Among a certain group of wine drinkers…the very high end…Willamette is known. My issue is that it’s the kind of intrusion onto someone’s branding platform (their label) that is so significant it better come with real, verifiable results. I’ve not seen any solid evidence of Conjunctive labeling is effective.

  7. doug wilder - September 18, 2018

    Tom, you wrote “Among a certain group of wine drinkers…the very high end…Willamette is known.” That may be true. But what percentage of ultimate consumers does that represent? Likely in the low single digits. Living in any major metro area, especially Northern California we have an enormous breadth of choice which inevitably leads to discernment and therefore an informed consumer who wants to learn and understands the differences. Even so, I still talk with people who make wide generalizations (ex. Russian River Valley is part of Napa Valley) We live in an oasis, relatively speaking while large swaths of the US amount to ‘wine deserts’ where little in the way of even examples with the largest AVA can be reliably found. Professionally I find the more information provided to the end consumer, the better. I will be in Portland for a week early next month and will be interested in hearing more about this from producers, hopefully David Adelsheim himself.

  8. Tom Wark - September 19, 2018

    Doug,

    You are, as always, a voice of reason and perspective. Yes, those of us that live in wine regions around the country (Nor Cal, Willamette Valley, etc) and in metro areas have access to a variety of wines that aren’t available in most other areas of the country. I guess my question is this: How much of my product’s label ought to be legally requisitioned in order to help a larger entity become better known? Moreover, where is the evidene that this requisitioning of space on my product label is effective in promoting a wider area?

    Conjunctive labeling is a fairly drastic action to take. It requires legislative action and it requires a brand owner to give up part of their producs label. Before doing so, we ought to know if it’s worth all that.

    Finally, if such a requisitioning of a brand owners product label is going to occur, then I agree with the plan to allow brand owners to bury the “Willamette Valley” wording somewhere on the “front label”/”back label” in smallish type.

  9. Michael E Harrell - September 19, 2018

    I conduct tastings and hand-sell wines in Minnesota wine stores. I completely agree with Cliff Anderson. Many, many, even well-educated and well-travelled Minnesotans have no idea where exactly Oregon wines come from. They know Oregon is somewhere out west, but often that’s where their knowledge ends. “Willamette” means nothing to them. They know Oregon wines are not from California, but that’s about it.

  10. Helene - September 20, 2018

    Well, it’s an interesting dilemma, but I agree with you, Tom, that it MIGHT detract from a well-recognised sub-region, if the wine is sold locally or possibly elsewhere in the USA/Canada. In a more global context, no sane (or even insane) consumer would have a clue what Chehalem Mountain means, but they might recognise the Willamette, since that AVA is publicised as an excellent source of New World Pinot Noir. Does anyone recognise Nelson (across the strait from Wellington in NZ)? Probably not, but they might recognise New Zealand!

    Second point, but many in the Willamette won’t like it, is that the styles of wines among the various sub-AVAs is not intuitively obvious to the most astute observer. When a certain Master of Wine was writing a dissertation on the subject, the most successful at identifying which sub-AVA by tasting was the esteemed Jancis, who managed to identify a mere 9 out of 20 (I was way down on 7 and missed one because I recognised the wine itself and believed it was from the producer’s own vineyard)! Producer style might be a better clue than a sub-AVA…

    I’m afraid that I’m in the camp of ‘Willamette is better recognised than the sub-AVAs.’ I also take the point that individual producers can (and should?) take the opportunity to include the larger AVA on the labels, especially for export markets.

  11. Jim Gullo - September 20, 2018

    Tom, there are larger issues at work here that may mitigate your point about precious label territory being forcibly wrested from the small producer. As we see from abominations like Copper Cane’s “Willametter Journal,” (see SF Chronicle piece published 9/20/18), the attacks and attempts to co-opt the good Willamette Valley name are just beginning. Putting the WV AVA name on the label reinforces the solidarity that WV producers have always shown, and signals to predatory Californians that we won’t be fractured into our sub-AVAs, allowing the broader Willamette Valley name to become generic to anyone who wants to grab it. I applaud Messrs. Wright and Adelsheim for taking one more stand at this juncture of their long, successful careers to protect the integrity of the region that they helped create and bring to worldwide attention.

  12. Ken Wright Cellars - September 21, 2018

    Hello Tom,

    I’m reaching out as Ken was just made aware of your article. He apologizes for his delayed response, but he has been out for a few days for a medical issue, so I am reaching out on his behalf. We really appreciate your kind words mentioned in the article. Ken has been instrumental in the creation of the sub-AVA’s of the Willamette Valley (being the author of the Yamhill-Carlton AVA) and as you stated, truly believe in the value of including them on each of our single vineyard Pinot Noir labels.

    However, Ken, David Adelsheim and Erica Landon have been a part of this conjunctive labeling initiative since the beginning. Going forward, Ken Wright Cellars, Adelsheim and Walter Scott will be modifying their labels to include both the sub-AVA and the Willamette Valley AVA.

    We appreciate you covering an important topic for our wine region and for your perspective.

    -Ken Wright Cellars Team

  13. Damien Wilson - September 25, 2018

    Tom, as we discussed on the phone, I believe that this issue certainly merits debate and consideration by all concerned. The fact that this discussion is generating not only publicity, but wine for thought, is very much appreciated. Academics like me, too often focused on publishing in scholarly journals, need to be better at generating discussion on important issues to our practising fraternity. Despite the fact that you and I disagree on the merits of conjunctive labelling, I commend your actions in helping to generate the publicity that this issue so richly deserves. Thank-you.

  14. Peter Ricci - September 29, 2018

    Everyone made very good points and counter points. In my 45+ years in the industry I have learned to listen more than speak. Learning from people who know much more than me. More importantly listening to the “man on the street”. The wine customer, their views are varied mainly due to levels of experience and opportunity. Many wine professionals are too busy working in the industry to listen to the “man on the street”. Professional’s views are shaped via their peers and other industry contacts, like this blog . We all need to reach outside of our normal information flow. Talk with people in small wine shops, grocery stores, and large chains; in the Midwest, Northeast, down South; in cities, burbs and rural areas. What you will learn will surprise you. The views different from what we think is common in our professional inner circle.


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