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The Oregon Grape and Wine Industry

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Title: The Oregon Grape and Wine Industry


1
The Oregon Grape and Wine Industry
  • AAWE Conference
  • 15 August, 2008

2
(No Transcript)
3
About Us
People Honest, collaborative, friendly,
accessible, authentic
4
Sources NASS, Dr. Greg Jones, Southern Oregon
University, 2008
Sources NASS, Dr. Greg Jones, Southern Oregon
University, 2008
5
Source Dr. Greg Jones, Southern Oregon
University, 2008
Sources NASS, Dr. Greg Jones, Southern Oregon
University, 2008
6
Sources NASS, Dr. Greg Jones, Southern Oregon
University, 2008
7
Sources NASS, Dr. Greg Jones, Southern Oregon
University, 2008
8
Sources NASS, Dr. Greg Jones, Southern Oregon
University, 2008
9
Economic Impact
  • Over 1.4B
  • 8,479 jobs
  • 203M in wine-related wages
  • 92M tourism revenue
  • 1.48M annual winery visits
  • Wine grapes rank in dollar value within Oregon
    agriculture 4th

Sources Full Glass Research, OWB, OWA (2005)
10
Ultra-Premium Focus
  • Successfully focused on the higher priced, higher
    quality segments
  • Highest average returns per ton
  • Highest average revenues per case
  • Despite producing a much smaller volume of wine,
    OR winery revenues per capita compare to NY and
    WA

11
Outlook generally positive
  • Demand for PN PG remains high
  • Production costs are reasonable for the quality
    obtained
  • Market outside NW underexploited, offering solid
    growth potential
  • Wine tourism underdeveloped compared to CA wine
    regions
  • 5 percent of overnight leisure trips involved
    winery visits
  • Far lower than Mendocino, San Luis Obispo and
    Amador counties (1025)
  • Tourism infrastructure not keeping up with
    industry growth
  • However, competition fierce, especially in a
    softening economy
  • Market will need to absorb significant increases
    in the supply of PN and some other varietals

12
Unique Business Challenges
  • No significant economies of scale no large
    vineyards possible
  • Not about cost minimization, but margin
    optimization
  • No extraordinarily large player, unlike CA and WA
  • Limited marketing budgets
  • Many second career owners not in it for the money
  • Not always a rational economic system
  • Securing effective distribution in 3 tier system
  • Emphasis on direct distribution margins vs.
    efficiency
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