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Why a Ste. Michelle-Owned Erath Winery Makes Sense

Photo by: David Yellen

Posted: Jun 1, 2006 11:00am ET

Ste. Michelle Wine Estates' surprise purchase of Erath Vineyards looks like a good deal all the way around. The Washington-based buyer has a long history of pursuing quality, especially in its marquee labels. And the Oregon winery, which makes more Pinot Noir than anyone else in Oregon, needs a lift.

Erath, the man, was an Oregon pioneer. He arrived in Dundee, Ore., from California in 1967 with the first wave of true believers who planted Pinot Noir in defiance of all the sage advice coming from university professors. They said it was too cold, too wet. It would never work. They were proved wrong.

Pinot Noir now is Oregon's claim to fame. The roster of hot-button producers is long. Erath, the winery, alas, is not among them. The Erath brand is strong in the market, but its inconsistency in winemaking has always puzzled me. Dick Erath is a fine grape grower. He knows his vineyards, has great relations with the growers he buys from, and knows what he wants in a wine. He's also a terrific guy, the kind of fellow who makes a great table companion.

But Erath's light, simple style has never captivated many wine-savvy followers. It's easy to drink, always pleasant, often a good value, but the extra facets that make Pinot Noir such a fascinating proposition seldom emerged in his wines.

In 2003 he hired a new winemaker, Gary Horner, who had been responsible for the wines at Benton-Lane and, earlier, at Witness Tree. He fit the Erath profile because both those wineries favor light, fragile styles. There was a noticeable uptick in the Erath 2003s. The vintage blend, a $15 wine, rates 85. I rated La Nuit Magique, a small-production bottling, at 90 points, and several others scored in the high 80s.

Addressing the winery's future, Ste. Michelle president and CEO Ted Baseler spoke diplomatically of providing better barrels, a better facility, and acquiring more vineyards. That's essentially what they did last year after they acquired Spring Valley Vineyards, a small, high-quality producer of red wines in Walla Walla. They left the winemaker in place and let him keep doing what he did before, only with the entire vineyard to work with, not just what was left after grape contracts were fulfilled.

On the other hand, Ste. Michelle's other out-of-state wineries, Villa Mt. Eden and Conn Creek in California, have become reliable commercial brands. Few of their wines turn heads.

Baseler's goal with Erath, the winery, is to challenge the best in Oregon. To do that, it needs more TLC than Spring Valley did, as that was already among the best in Washington. The question in my mind is, which model will Ste. Michelle follow with Erath, Walla Walla or California? It's a much bigger winery than Spring Valley, and it has the potential to grow quickly, maybe not to California standards, but big in Pacific Northwest terms.

In its own wineries in Washington, notably Chateau Ste. Michelle and Columbia Crest, the company has been very good at making reserve-level wines that can rate among the best in the state. Erath has a ways to go for that, but I wouldn't bet against Ste. Michelle doing it.

Greg Malcolm
St. Louis, Missouri —  June 1, 2006 2:08pm ET
I would love to see Erath improve and succeed. It was their Pinot Noirs that originally got me interested in wine. They are also a great group of people.
James Molesworth
June 2, 2006 11:50am ET
Yet if Dick Erath is staying on to oversee things, wouldn't that make the chance of a style change and/or quality improvement (which ever way you want to call it) low?
Harvey Steiman
San Francisco, CA —  June 2, 2006 12:09pm ET
James,Dick is staying to oversee the vineyards and help in the transition through the end of the year. I wouldn't want Ste. Michelle to come in and totally change the style, anyway. Delicacy in Pinot Noir is a good thing. Doing it more consistently is, too.
Ron Zimmerman
Woodinville, WA —  June 2, 2006 2:04pm ET
This seems like a good move on Dick's part. The winery gets a boost and his good name is preserved. Chateau Ste. Michelle hires excellent people, gives them leeway to succeed, and has deep pockets.Most people aren't aware that Dick has had a winter home in Arizona since the early '90s. He also has planted several hundred acres of Syrah, Tempranillo, Sangiovese, Grenache and Mourv¿e in Arizona with the intent of making high-altitude, high-quality Arizona wine. I would imagine a few extra shekels might be handy for that imaginative, late-life project, as well.
Harvey Steiman
San Francisco, CA —  June 2, 2006 2:48pm ET
Dick told me his project in Arizona was 14 acres. Maybe that's only up to now. The first vines are in the ground, but it will be a few years before we see the results. He's jazzed about the possibilities there. I think he's really a pioneer at heart.
Tom Brian
Portland, OR —  June 3, 2006 7:26pm ET
The Erath acquisition by wine powerhouse Ste. Michelle is an interesting move and probably good for the Oregon wine industry in general? In your view, what made Erath the choice over other large wineries such as King Estates or Willamette Valley Vineyards, or are they next to be acquired by the mega brands?
Harvey Steiman
San Francisco, CA —  June 5, 2006 12:51pm ET
I haven't heard any rumors about King Estate or WVV being sold. I don't think we'll see Oregon's other big wineries being picked off by bigger wine companies from outside the state. At least not right away.

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