How Wine Markets are Different From Beer Markets, and How They Aren't

Oregonian columnist Steve Duin had a fascinating piece in yesterday's paper about the Oregon wine market. Locally, wine and beer are regarded as pretty similar products: rapidly expanding, artisan-made, small-market products with a strong international reputation. This conceals the differences between the markets for these products, which are legion. And, based on Duin's article, the wineries are in for a big fall.

(Backgrounder. Oregon's western climate is cool, and the growing season is short. Most grapes don't do well here. The exception is pinot noir, which can be coaxed along to produce world-class wines the equal of those from Burgundy. Almost all of Oregon's acreage is devoted to pinot noir and pinot gris (92%). Because of the conditions, though, an acre will produce two tons of grapes, not the five that emerge from fecund California vineyards. Duin quotes one winemaker who observed that "it's phenomenally expensive to farm" in Oregon. As a consequence, you often spend $30 for a bottle of wine grown 30 miles away.)

The craft beer market has continued to enjoy robust growth, and even three or four years ago people began to wonder if it was sustainable. But craft breweries grow by the single digits each year in Oregon. Compare that to wine:

Between 2004 and 2008, Hatcher says, the number of Oregon wineries doubled, to 400, as hobby farmers and other opportunists sought to take advantage of the growing celebrity of Oregon’s pinot noir grape.

So here we have a region famous for a style of grape and capable of producing world-class examples. So what has the industry been focusing on?

But that campaign has been undercut by the sub-appellation movement, in which a small number of Oregon wineries want consumers to believe that acreage producing its second vintage is the next Heitz Martha’s Vineyard cab, eucalyptus leaves and all.

“When half of America can’t find Afghanistanon a map, how can we expect them to parse the difference between Chehalem Mountain and the Eola Hills?” Hatcher asks. “We’re making it more and more confusing.”

According to Duin, who believes half the wineries will be gone in ten years, this is a monumental blunder. Wineries should be cashing in on the mystique of Oregon, not the subtle distinctions that distinguish the terroir in the Willakenzie loam from Ribbon Ridge.

So much is different in the way wine and beer are produced. Wine is dependent on nature--it is a born beverage, not a made one. Beer is a matter of chemistry and recipe, closer to a restaurant meal than agricultural product. In some other ways, though, beer has some shared qualities.

I was recently talking to John Holl, the New Jersey beer writer. On the East Coast, they get just a couple Oregon beers. When I described the diversity of beer styles brewed locally, he was shocked. A brewery devoted to farmhouse ales? A barrel house that serves mainly sours? States or regions have not done a lot to articulate a sense of place in the beer world. Because the local market is so good, breweries haven't had to venture out into the national market to sell their products. As a consequence, breweries mainly try to figure out how to distinguish themselves from each other in this variety-rich landscape. For breweries, there's no reason to think of ways to present Oregon or Northwest beer as a kind of "appellation."

Anyway, it got me thinking. In Oregon, beer and wine are superficially similar in so many ways. But they're actually hardly alike at all.