Peak BC Wine

Is this the end of an era for the Okanagan?

Things are changing with the wine industry in British Columbia, although it may be more likely in the interior wine regions than the coastal ones. As a wine lover living outside of the Okanagan, you might not be aware of it. Yet. You may notice it on your next visit to the Okanagan, or in the future when you have trouble finding a favourite wine. It might taste a little different somehow, or maybe it will have a slightly different look, if you can even find it.

This is happening in other Canadian wine regions too, but from what I’ve observed, the Okanagan is going through a lot of these changes.

Has wine in the Okanagan finally peaked?

Domaine Fermé

Kitsch in East Kelowna is closing down operations. They are doing it for a “a family sabbatical” and that “they may not be closing down completely” according to an article posted on Castanet. It’s been eight years for that winery, which was one of the most exciting new brands in Kelowna. Along with other wineries like Tantalus, Spearhead, and The View, they helped cast Riesling as a star grape variety for the region. Riesling will still be the draw for Kelowna, but now Kitsch is out of the picture.

Indigenous World Winery in West Kelowna announced on Facebook that they are shutting their wine shop. They are moving to tastings by appointment but did not say how long that would last in their post. Perhaps it’s just a way to close out the season and next year they’ll be back to normal. Hard to tell, but it doesn’t sound good. Likewise, Covert Farms in Oliver announced in an email that they are shutting down their tasting room and focusing on production only. No more tastings at one of the best farms in the south.

One could argue that not having a wine shop isn’t new, so perhaps this is more of a stabilizing trend than anything that spells disaster. JoieFarm operated for years without a proper tasting room and previously virtual wineries like One Faith and Winemaker’s Cut didn’t have tasting rooms until the District Wine Village made it feasbile.

A few wineries are currently listed for sale. One of them has a real estate sign hanging on the fence just past their main sign at the gate. This hardly makes it inspiring to want to visit. It’s as if to say, “Come enjoy our wines! It might be the last year you get to try them so if you really like them, you’ll probably never get them again.”

Small wineries have always come and gone over the years. The only real difference is that it seems like there is a lot of closures happening all at once. At least the big wineries are solid and not going anywhere. Right?

Well…

Sumac Ridge Estate Winery, the very first estate winery in Summerland, was shuttered completely in the spring by parent company Arterra Wines. Sumac Ridge will live on as a brand so it won’t be gone for good. Under the previous ownership of a multi-national wine corporation years ago, the once-venerable Sumac Ridge was slowly downgraded to occupy the budget basement of their lineup of brands. They didn’t directly label it as a “Not-So-Great Estate”, but they might as well have since they showed absolutely no respect for that brand’s important history nor their previously respectable brand position. They peeled off the best stuff (Black Sage Vineyards and Stellar’s Jay) and then priced the remaining wines at 2001 prices. Yes, the building was awkwardly shaped with no room to grow and I’m sure Arterra’s financial reasons were totally justifiable. But it’s still a sad end to an important winery.

Andrew Peller may ultimately do the same thing with Red Rooster, which has shut down production this year and closed the wine shop. Unlike Sumac’s closing, which was done quietly, the Rooster’s closing has made headlines. Both properties were located in excellent tourist areas (Sumac Ridge right off the highway in Summerland and Rooster at a busy intersection on Naramata Road not far from Penticton), so both locations were fantastic from a visitation point of view. Rooster wines will live on as a brand although it remains to be seen for how long.

Nothing to Do but Wait

On the tourism side, wine shop staff everywhere were let go early or had their hours reduced. Mid-September saw some pretty good weather and people did start to come back slowly but surely, but not at the same level, nor was it enough to salvage the tourist season.

Even though this year started out so promising (with lots of tourists, visitors from the US, great spring weather, etc.), this has turned into one tough tourist season for wineries in the interior, which has capped off a series of difficult vintages and tourist seasons.

In the fall, tourism organization for towns and regions flooded social media with messages to come and visit, and that we are open for business. More wine-centric accounts were urging people to support local wineries. There is a distinctive vibe of desperation embedded in some of these messages. I really don’t think it will affect a huge amount of change or inspire more loyalty to brand #BCwine than already exists for various reasons. I do agree that getting those messages out is important to raise awareness, but is it working?

Maybe. But I don’t remember a time when it has been such a struggle for the Okanagan wine industry to get people out. Though I wasn’t here at the time, I have heard that post-9-11 were tough times as people weren’t travelling anywhere and taking up the slack from online / club sales were not possible at that point (legally, but also technologically). The industry has also grown a lot in the past 22 years and there are more wineries now competing for the same tourist tasting glass. COVID made people plan less far in advance and smoke and wildfires have now made people consider other, more smoke-free destinations. (Sadly, those are getting fewer and few as well…)

Even if they choose the Okanagan, there is now no guarantee that their favourite winery will still be in business.

Hardships

Since 2020, the wine industry has been hit with all kinds of weird hardships and obstacles, one after the other. A global pandemic, wildfires, cold winters, travel restrictions, more wildfires, rising production costs, and landslides. Other than COVID, none of these things are new to wineries in BC. What makes any of this newsworthy?

The winters have been colder than normal and for longer. Some of the lesser-protected areas have been hard hit with vine-killing cold temperatures. Even if vines survive in any usable quantities, those vines may not even produce grapes for another year. The Okanagan has seen tough winters before. It’s part of the cycle of the weather in that region. Every 8 to 11 winters are cold. Winter 1969 was apparently a bitch. 1978-79 sunk a lot of aspiring vignerons’ dreams at a time when estate wineries were being seriously considered and a dedicated few were trying to prove that the Okanagan could produce wine that didn’t have to be sold in jugs. That winter was a major setback for that argument and quite literally a dream-killer for early small producers. There was another bad one in the mid-1990s. 2010-2011 wasn’t fantastic either as I recall. The Okanagan was due for another cold snap.

Wildfires are now a part of life in the summer here. Even if the actual flames are not close by, then smoke often dominates the sky. This is not new, but the frequency seems to have changed. It’s not “will there be a fire?” it is “where and when will the fire be this year?” The way fires are reported is also far more generalized as well. Even though the fire in Osoyoos was 45 minutes away by car from my house, my family in Ontario still texts me to see if I’m ok. From what they see on the news, they think that I am running for my life down the street with a wall of fire chasing me. It’s good of them to check in, so I do appreciate that, but I know that it looks lot worse to them than it does here.

What looks bad 100% of the time is smoke. Smoke is the threat for wineries throughout the region for two main reasons.

Smoke taint in the grapes is the obvious one, but it’s also one that has been abused to death by wine media. It’s always the first question that gets asked as soon as a fire makes the news. Even a small, early-season, localized fire will spawn those questions. Every time a winemaker gets asked that question, I can hear their eyes roll. Any response is going to be pure speculation and on a topic that has horrible potential consequences. It’s like asking, “So statistically speaking, you are going to be involved in a car crash at some point in your life. How do you think you will cope with the brain damage that is going to be a part of your future?” It’s sloppy and un-creative journalism that jumps the gun. There won’t be any way to test for smoke taint until much, much later. The wine won’t even be released until a year or two later, if it is ever released. Be creative and think of a better question next time. There must be better things to talk about.

The second blow from smoke is that it makes the region inhospitable. Smoke in the air is smoke in the lungs and nobody likes that. Visually, when it’s bad, the beautiful views across the lakes disappear. The sun, if you can see it, turns red. Nobody wants to visit when that is happening. I don’t even want to live here anymore when it’s like that. B&B bookings and tasting reservations gets cancelled at the last minute. Wine bottles on the shelves get dusty. Staff spend their days dusting wine bottles instead of hosting visitors.

Travel restrictions came back in the news late in the summer when an ill-advised statement from the provincial government told people to stay away from the whole region. It named specific towns like Osoyoos, Oliver, and Penticton (poor little Okanagan Falls didn’t seem to be worth mentioning!) which were all communities nowhere near fires. The restriction was repealed only a few days later, but the damage was done. People canceled their stays and left town. Did anyone think that they were going to come right back?

As if to remind everyone who is really in charge, nature fired one more salvo in the form of a landslide that blocked Highway 97, cutting the Okanagan Valley in half. Even if people visited Kelowna again, day trips to anywhere south of Peachland were out of the question. Highway 97 has been closed before over the years, but this was the 2^nd time this year, and it will certainly not be the last.

Chateau Plateau

What makes 2023 so darn special is that almost all of these things - fires, smoke, landslides, cold winters - have happened in rapid succession. Some of these things damage crops and others keep wine tourists away. They all affect the bottom line to help pay off those loans and mortgages that are now a lot more expensive than they were 3 years ago. That’s a lot for any region to take in. Wineries that are financially well organized, growing appropriate grapes in the right places, and growing them properly will probably all be ok in the long term. Unfortunately, even wineries that are well managed may still be affected.

I don’t make predictions often but this season could be the beginning of a plateau, or worse – a decline - for the wine industry in the Okanagan. Since the early 1990s, there has been amazing growth in vineyards, the numbers of wineries, and the amounts of amazing wines produced in the Okanagan and Similkameen Valleys. Is growth like that sustainable? I think we can all agree that it is not and it has to end somewhere.is it just levelling off? Probably. Are people now going to think twice about investing in starting a new winery or purchasing? Maybe.

If it has been difficult for you, as a wine lover and consumer, to keep up with all of the new wineries, I don’t blame you. I’ve had trouble following it myself. There were always new wineries popping up. In my career in the wine industry, I have been constantly amazed at how many new wineries entered the market each year. John Schreiner, the wine writer that has been following BC wine for the longest, used to post about the new wineries by classes, as in the Class of 2015 – to introduce new wineries that were just getting started each year. I’ve noticed that he doesn’t do that anymore. Many of his articles focus on news about wines from established wineries. The pace of new wineries appears to be slowing.

Consolidation is also a part of it. Larger companies have been purchasing smaller ones to gain land, expertise, and brands. That’s not new. The recent era of this started in 2005 when Andrew Peller purchased Red Rooster and Calona Wines. Arterra purchased Laughing Stock. Mission Hill bought out Road 13, Liquidity, Domaine Combret, and CedarCreek order over the 2010s. Peller went shopping again in 2017 and acquired Black Hills, Gray Monk, and Tinhorn Creek in the same week.

Smaller wineries are getting purchased by other smaller wineries. Shared owners are sometimes difficult to spot. Nichol Vineyards and Lock & Worth are sibling wineries under the same ownership, as are Stag’s Hollow and Bench 1775, and Wild Goose and Burrowing Owl. Most wine consumers who don’t follow the industry have no idea about winery ownership since it doesn’t make much difference to them, which is totally fair. There really isn’t much need to know that kind of information. Unless, of course, they are want to taste Red Rooster wines next summer.

So if wineries are growing by acquiring other wineries, that means that new ones are not being created from scratch. If more wineries are closing than opening, are we going to see a decline in the number of wineries in the Okanagan for the first time? Is BC wine a good investment anymore? Surely 33 years of rapid and often intense growth can’t last forever. There is only so much land to go around. Have we reached peak Okanagan wine? Ownership changes, mergers, and winery shut downs might be the new normal for a while until these natural events subside enough to have a few good seasons in a row. The question is, how often will rough seasons like this happen? One thing about farming, that is easy to predict, is that it is unpredictable.

Not all change is bad

Even if wine production in the Okanagan has reached its high water mark of quantity, there is still a lot of room to grow for increasing the quality. This is where I think the biggest changes will happen and will largely determine which wineries ultimately survive or not. Grape varieties that don’t survive will be replaced with better ones more suited to the land from a generation of trial and error, and not varieties that happen to make up the new owner’s favourite blend or based on a consultant’s educated guess. In the bigger picture, that’s how the industry learns what grows best in a particular place. Some results might even be surprising. Hopefully this may also cause wineries to start focusing on a smaller set of grape varieties instead of carpetbombing wine shops with every variety and style of wine in hopes that someone in every group finds a wine that they like.

If, as so much bad wine marketing often alludes, wineries actually do respect the land, and therefore nature, it will be interesting to see which of them actually listens to what nature tells them. “Hey, that Zinfandel that you planted on the valley floor? Yeah, not a good idea. It’s dead now. Good luck paying down that mortgage.”

The wineries that really listen are the ones that will still be around when the smoke finally clears. When it does, there should be some fantastic quality wines to drink to celebrate.