Napa vs Oregon Wine Country: Coppola Edition

Oregon v NapNews that the Coppola family of Napa and Sonoma winery fame purchased the Vista Hills Vineyard in Oregon’s Willamette Valley shouldn’t be a real surprise. While there isn’t an exodus to Oregon among California winemakers, there certainly is a turning north in winemakers’ investment view.

The Vista Hills Vineyard is a pretty prime spot. Located in the Dundee Hills AVA and situated next door to Domaine Drouhin and Domaine Serene, the 42 acres of vineyard and tasting room and winery place it right in the middle of what is the hottest winegrowing regions in America and the source of some of the most coveted Pinot Noir vineyards in the world.

The real key to this purchase, however, is the value, at least relative to what Napa growers and winemakers experience on a daily basis. The price of the sale to the Coppola family was not disclosed.

The Question of Value

Willamette Valley Pinot Noirs and Chardonnays sell at a premium price, well beyond the average for even California Chardonnay and Pinot Noir. Equally important is the location of the Willamette Valley, just an hour south of the major metropolitan area of Portland and its environs. This means that like Napa and Sonoma, the Willamette Valley is easily accessed by wine lovers from across the globe. This, in turn, means that Willamette Valley wineries can sell a larger percentage of their production direct from their tasting rooms and via wine clubs.

But back this question of value. Willamette Valley vineyards are still remarkably affordable compared to Napa and Sonoma.

Consider this Willamette Valley property: 83 acres with 13 planted located directly in the middle of Oregon vineyard for salethe Yamhill Carlton AVA for $2.9 million. The description reads:

Sweeping 86.45ac in Yamhill Carlton AVA! Endless agribusiness opportunities: 12.7ac of producing vines, 26’x35′ equipment barn, 40’x162′ barn w/bay doors, slab parking w/semi access, office & area for grape processing, distilling & cold storage. Develop your own label & make this stunning acreage the next wine tasting destination. Or build your dream home nestled among mature evergreens overlooking gorgeous vineyard & valley views.Napa land for sale

Now, consider what one can purchase in Napa Valley for a similar price: For $2.5 million you get 6.3 acres in the Coombsville District of Napa Valley, no vineyards, but with 3 acres of potential vineyard land. The description reads:

Idyllic country with privacy & seclusion – 6 1/3 acre parcel provides the perfect setting for your estate home with views of vineyards & the peaceful countryside. Includes County approved house plans for a contemporary ranch style home plus a detached 5 car garage – 3+ acres can be planted in Vineyard. There is an existing well and approval for a standard septic system. Close in location near Silverado Resort & Napa Valley CC. See Soil Report.

Oregon Looks Good To Us

I can’t speak to which is a better investment, the 83 acres of prime vineyard land in the Willamette Valley or the 6.3 acres in Napa Valley. Nor can I say what in particular drew the Coppola family to Oregon. But you don’t have to be Warren Buffett or Francis Ford Coppola to see the difference.

Kathy and I still have our eye on the Willamette Valley. We have been visiting the region looking for land and homes (not the kind spotlighted above, but something more modest). But we are looking in the Willamette Valley for many of the same reasons many vintners look north: value.


15 Responses

  1. Jeff Swanson - October 25, 2018

    Value and free irrigation via 45 inches of annual rainfall.

    And let’s face facts, climate change has guaranteed that we can get the fruit ripe every year now.

    But thanks to that weasel Joe Wagner, there seems to be a backlash against California companies buying up our mom and pop wineries.

  2. Tom Wark - October 25, 2018

    Jeff,
    Your point is well taken. In my experience, Napa winemakers and growers are outstanding stewards of the land. Fear not.

  3. Alissa Leenher - October 25, 2018

    I loved my visit to Vista Hills last year and wondered how more people were not talking about this divine spot making gorgeous wines. Guess the secret is out.

  4. Rob McMillan - October 25, 2018

    I’ve been espousing the opportunity in Oregon for over a decade. Wineries in CA used to say there was no way to produce good wine there because of the rain, but that’s proven wrong – even though there are rainy harvests at time.

    Economics win out relative to value. Both Chardonnay and Pinots are consistently excellent but land is ~$40k an acre versus ~$350k an acre in Napa. The one caveat is yields are significantly lower there … around 1.5 tons/ac versus something around 4 tons to the acre in the N Coast. Still – the value is clearly superior considering the wines that can be produced for the investment.

    And I should add that another important factor is you can still plant a vineyard in the Willamette Valley with reasonable permitting, while you can’t do that anymore in Napa/Sonoma.

  5. Tom Wark - October 25, 2018

    Rob,

    I am absolutely sick and tired of your common sense!

    Tom…

  6. Lee - October 25, 2018

    My family and I who run a (leased) winery and tasting room in Sonoma County, have been in decision mode about moving it all to or near McMinnville.
    We finally found a seriously run down property (house & barn & stables) on a couple acres in a Prime Location in the RRV / DCV area (near Healdsburg) for $1.3m. No Vineyards, but surrounded by them.
    We feel that location, location, location is the way we will be able to continue sell our products.

    Lord knows, ratings and articles in the wine journals have been of little help. And we’ve spent years & $$$ pouring at every major wine event all over the US, with little to show for it.

    What has worked is having a tasting room in a great location, so we are doubling down on that.

  7. Tom Elliot - October 25, 2018

    Interesting perspective for sure. One item to consider, RE: “Willamette Valley Pinot Noirs and Chardonnays sell at a premium price, well beyond the average for even California Chardonnay and Pinot Noir.” Ok, this might be correct if you include all the lowest priced CA versions, however, if you look at the $18 SRP and up category, which is where the Willamette Valley versions start, I believe you will find that average pricing for Willamette Valley PN and Chardonnay is closer to the same as CA, if not lower. This may change in the future but this is what I see currently when I look at the listings.

  8. Brent - October 25, 2018

    Rob –

    If you are correct with regard to yields up there, then the farming costs are going to drive people out of business, at least if they are only growing fruit. I can’t believe that they are not seeing the same labor issues we are here in Sonoma County.

    I do agree there are much easier places to do business – witness the Wilson project finally gaining approval in Sonoma County after 13 years this week. Very tough to start a new business here and forget about trying to get a winery unless you have very deep pockets and a location with no neighbors.

    The northwest have been blessed the last few years with some fairly dry weather too. Move the jet-stream a bit and all bets are off.

    I think I will stick to farming here in Sonoma County, where we run around like the sky is falling when there’s a threat of rain during harvest.

  9. Rob mcmillan - October 25, 2018

    Brent
    The quality vineyards get low yield so farming cost per ton is higher. But cost of grapes is lower because of land prices. The wines produced there are a better value versus Sonoma and Napa, and I say that as a life long bay area native.

    Also dont make the mistake thinking they cant have quality wine because of rain, or it’s a fluke because of weather patterns. While I acknowledge the weather is more favorable in the PNW than 30 years ago, the reality is they have learned which clones, rootstock, and practices work best. They still have more variability in weather but the best producer always make world-class wine.

    What Napa and Sonoma have over the Willamette is a better brand. But lower input costs and better value will have them close the gap on the North Coast. Napa and Sonoma have to compete and shouldnt ignore Oregon and Eastern Washington.

    Yes they have the same labor issues but 23% annual growth with average $30 wine is compelling. I’d like to say there is room for everyone, but overall growth rate in US wine consumption is slowing and bottles imports are climbing in share. So we really are looking at a region taking market share from the traditional North Coast wine region.

    Time.to get busy!

  10. Shane Moore - October 26, 2018

    In response to Rob –

    The economics make even more sense considering 1.5T/ac is almost an unheard of low yield off of modern healthy vineyards in the N. Willamette. A very conservative average yield over the last at least 7 vintages has been 2.5 T/ac (even at 5×8 spacing). At tighter spacing 3 T/ac is generally a easily achievable # to base conservative economic assumptions on.

    Shane

  11. ksenija kostic house - October 26, 2018

    Completely agree with Shane. Rob, I would love to see where did you get the information on 1.5 tons/acre average, that’s definitely not the case for the last three plus vintages.

  12. Rob McMillan - October 26, 2018

    Ksenija/Shane – Sorry. I know better and 2.5T is the number I normally use. Brain cramp or typo but it’s rare to find 1.5T yields. Thanks for the correction.

  13. Jeff - October 28, 2018

    Nearly the entire post prohibition Willamette Valley wine industry was started by people coming up from California. The only difference between those that arrived in the mid 1960’s – early 1980’s and those arriving now, is that this new crop are large corporations with much deeper pocket books.

  14. Tom Wark - October 28, 2018

    Jeff: Let’s not forget about Tony Soter and Ehren Jordan. Neither represents large corporations. But, your point is well taken. However, I’m not sure I’d say Coppola is a large corporation. It’s larger than your average Oregon winery, for sure, but it’s no Constellation or Gallo.

  15. Jeff - October 28, 2018

    Well, as of today, neither Constellation nor Gallo own any Oregon wineries, so not sure what you point is in bringing them up. Yes, there have been other Californian’s coming up to Oregon in the 1990’s, 2000’s, 2010’s as well. The list is a long one. However, special attention and respect should be shown to those that understood the disadvantages of growing certain wine grapes in California and the advantages of growing those same grapes in Oregon. They knew this in the 1960’s.


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