Minimal Barrier to Entry
Are you a successful professional and serious wine enthusiast dreaming of owning your own winery in an established AVA, only to find the start-up costs in California are insane? Have you investigated California vineyard properties costing $75K per acre, or more? No one individual with business ownership experience would ever consider an opportunity with near zero ROI in the first five years and a 10-15 year payback. Well, hello AZ at $1-2K per acre!
Even still, an estate winery start-up is not cheap: $30K+ per acre to prep the soil, purchase and plant the vines, plus VSP trellising system and five year wait for mature vines, etc. Considering it normally requires a minimum of 1,500 cases of production output ($400-500K revenue) for the beginnings of a profitable winery business, add the major risk of variable climate/weather and you will have to bite-off a huge chunk of both savings and determination to go down this road… but if the countryside lifestyle, the great industry people, connection to fine wine & culinary culture and rubbing elbows with the rich & famous makes it worth it, AZ is your destination!
Higher Ed Degree Programs, Research and Incubators
There is a program accredited by Yavapai Community College offering a two-year Oenology degree located in the new Verde Valley AVA run by Michael Pierce (trained/experienced AZ winemaker) that has been in operation for a few years now. They currently have 15 acres of planted vineyard and are producing roughly 1,500 cases of student-made wine. The Agricultural Extension at University of AZ is also now getting serious with research surrounding climate and fruit production for the local wine growing industry. Maynard Keenan helped to start the custom crush and industry incubator facility “Four Eight Wineworks” in the Verde Valley AVA. A real place where winemakers can cut their teeth. By the way, if you have not seen Maynard’s wine movie “Blood into Wine”. Track it down. It is a fun intro to the AZ wine industry.
Continuing AZ Legislation to Encourage Wine Tourism
AZ now has a significant retail wine footprint in the Sedona-Grand Canyon tourist area, with many new projects for wine tasting rooms in planning. The recent legislation allowing licensed in-state wineries to have two satellite tasting rooms instead of only one, has caused a boom in planned tasting rooms for construction in the Sedona-Cottonwood area.
Crazy AZ Wineries and Distribution
I have been writing about California and Washington wineries for more than 10 years and I have not found one that decided to self-distribute without a major Direct-to-Consumer sales footprint via an established tasting room experience. Without a tasting room, or commercial distribution agreement, the wine business can be a pretty lonely affair. In AZ, I found two, both with high quality wines. Break-even with this scenario seems impossible, but you need to understand the special nature of the AZ wine industry. There are several contributing factors: 1) Current advantages from state statutes making it more difficult for out-of-state competition (licensing/tax barriers) and creating sales advantages for in-state grower/producer/local self-distributors, 2) The 3-tier distribution system bloating retail pricing by including two additional mark-ups, and 3) In-state wine demand exceeding supply. These two wineries load-up personal vehicles and deliver cases of wine to customers at their homes on periodic runs through the Phoenix and Tucson metro areas. It took me weeks to get my head around this wine business model.
AZ Wine Identity
The area is finally starting to find a wine identity and is slowly coming around to the realization: the best wines use what the terroir gives. Forced wine styles do not work consistently well and because of this the local industry has been experimenting with lesser-known warm climate varietals native to the Rhone, S. Italy and Spain. Some of these wines are fabulous, surprisingly enough – especially the whites. Don’t be scared by varietals you may not recognize, because the whites (Viognier, Malvasia Bianca, Petit Manseng, Picpoul Blanc) and reds (Tempranillo, Graziano, Syrah, Grenache, Aglianico) are tasting as good as many popular California wines. The blended wines are definitely the best expression of AZ terroir. When the wine industry began in AZ in the late 80’s, the few vineyards that were planted attempted to plant Bordeaux varietals and the results were of mixed success. Although, a friend of mine and trained wine judge Jay Bileti (yes, AZ has trained wine judges too!) and I were recently given a Sonoita Vineyards ’89 Bordeaux style blend from their library that we enjoyed with a wonderful meal of Ossobuco made by his wife Lynn and it was very good!
I interviewed several talented winemakers in the last few weeks. They are making wines of unique character and style. With fruit-forward, balanced profiles that would stand-up to any evaluation as “premium wines”, anywhere in the world. The last time I tasted through the state about eight years ago, it was difficult to find a winemaker able to make consistently good wine, although there were a few: Kent Callaghan, Maynard Keenan, Eric Glomski were examples. In my opinion, the strength of the AZ wine identity will be blended whites & reds. Leading you to the idea: fortune will smile on winemakers with classically trained palates, able to leverage that knowledge to deliver the best possible product from the local terroir. This was an absolute necessity to take AZ wine to the next level.
AZ has definitely reached the critical mass juncture. The local wine industry and it’s future is exceedingly bright. The resources are in place to support a vibrant and successful wine community. The past several weeks of AZ winery tours and interviews have generated a significant amount of material and brought many insights into the AZ wine industry. Many more articles to come!