When There's a Bigger Pie, Everyone Gets a Bigger Slice

    In early January 2004, Norm McKibben and his Pepper Bridge Winery in

Walla Walla,
Washington, were in a world of hurt.

     A nasty freeze had wiped out 90 percent of his crop on 400 acres in
Eastern Washington, and McKibben figured it was going to be a very bad year.

       Then, out of the blue, McKibben received a call from Ted Baseler, chief executive of Woodinville’s Ste. Michelle Wine Estates.

       “He said, ‘We have grapes and you are welcome to them.’ And he helped out other wineries,” McKibben said. “From his standpoint, it was a smart business move. From our standpoint, it was a savior.”

       Baseler, who runs the state’s largest winery, told Beverage World it doesn’t serve Ste. Michelle well if other

Washington wineries suffer.

  “We have always believed the growth of

Washington wineries was more important to us. As

Washington grows, we grow,” said Baseler, who took over as president and CEO in January 2001.

       While the comment is statesmanlike, it’s also factually correct.

       From 2000 to 2007, the number of wineries in

Washington more than tripled from 155 to 540; the growth rate was nearly identical to the profit increase for Ste. Michelle.

       In 2000, Ste. Michelle had an operating profit of $17.4 million and $175 million in revenue. Last year, the winery had nearly $60 million in profits and $354 million in revenue.

       During that stretch, Ste. Michelle’s profits increased 244 percent, while the number of

Washington wineries grew 248 percent.

       Baseler said 2007 “was really a special year” for Ste. Michelle, and it “exceeded our very most optimistic expectations.”



Posted in Wine Region Profiles
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