This story was published 8/10/2001
By Mike Lee
Herald staff writer
The Hogue Cellars -- a Prosser institution and Mid-Columbia landmark winery for nearly 20 years -- was sold to North America's fourth-largest wine producer in a purchase made public Thursday. The $36.4 million deal gives the home-grown family winery a potentially huge injection of capital and opens the door to Canadian wine markets through Vincor International of Toronto, Hogue's new parent company. It also highlights the increasingly competitive nature of Washington wineries, which are being acquired piecemeal by out-of-state investors. "We had everything going for us but we needed more marketing muscle," said Mike Hogue, who plans to continue to represent the winery along with his older brother Gary.
"We can be part of this new company that I think is going to continue to grow," he said. "When you drive by Hogue Cellars, you are not going to see changes until we start building ... to accommodate those grapes we are going to plant." The sale, which is subject to Vincor's ability to get financing, includes the winery and 100 acres of vineyards. Thursday afternoon, Prosser city officials already were scrambling to make room for anticipated growth at Hogue, the town's largest tourism draw and a major economic force in the lower Yakima Valley.
"It is our hope that they have some plans for major expansion, which means more grapes are going to be grown, which means more farmers can help do that," said Ken Carter, Prosser city administrator. "More production means more workers, job creation, sales tax, property tax, more tourism draw and name recognition." Washington's wine circles buzzed with news of the purchase. "It seems to be the trend -- the bigger ones gobble up the medium-sized ones," said Mike Wallace, owner of Hinzerling Winery in Prosser. "If a company wants to continue to grow and make that next jump, you need those resources."
Wallace doesn't like to see local vintners replaced by outsiders during takeovers as sometimes happens, but he expects interest in acquiring Washington wines will continue to increase. "I predicted maybe 15 or 20 years ago this is exactly what would happen because you can grow grapes cheaply here and you can make really good wine here," he said. At least some industry analysts are convinced Vincor's entry into Washington will enhance the state's reputation at a critical time in its growth. "(Vincor) should be welcomed with open arms," said Coke Roth, Tri-City lawyer and international wine judge. "I am very excited that a top-notch, multinational, very serious wine company is making an investment of quality in Washington state. It will be doing nothing other than adding to the excellence that we already have."
Vincor owns several wineries in British Columbia, California, Ontario and Quebec. The Hogue acquisition will immediately increase its annual U.S. sales volume to more than 1 million cases and U.S. revenue to more than $60 million annually. Last year, Vincor purchased British Columbia winery Sumac Ridge from Harry McWatters, who remains president of Sumac Ridge Estate Winery and one of the most influential wine experts in Canada. "There is always a degree of skepticism about things that might happen," McWatters said, noting Vincor gave his operation substantial expertise he couldn't afford. "I am thrilled with the way things are today." While Sumac Ridge stands to gain increased attention in Washington because of its association with Hogue, McWatters said Hogue will gain an immense advantage in the Canadian market given Vincor's well-established distribution network . Also, he said Washington wines in general will have increased recognition as the Hogue label spreads.
Like most Washington wineries, Hogue Cellars started humbly. In 1981, the start of the modern wine era in Washington, Mike Hogue made his first batch of Riesling in his daughter's playhouse. Mike soon pulled Gary into the operation despite Gary's misgivings about their lack of knowledge about the industry. "Before Gary could effectively launch any kind of protest, he realized Mike had already hired a seasoned winemaker," according to the winery's Web page. After stuffing $800 from sales into their shoe box at the 1982 Prosser Wine and Food Fair, the brothers were convinced they were onto something. That year, the Hogues sold 2,000 cases. Two years later, they were up to 10,000 cases.
Hogue's reputation grew exponentially as it pulled in award after award and continued to swell into its current 400,000-case operation. Mike Hogue said Thursday that he expects Vincor to nearly double production. The family just started talking with Vincor about five months ago, Mike Hogue said, noting his attraction to Vincor's entrepreneurial spirit. "I don't think I feel any different today than I did yesterday," he said, while driving around the farm Thursday. "I don't feel like I am giving up anything. The things I have always done they want me to continue."
New Appellation!
Washington State has a new appellation, Red MountainWashington's Newest Viticultural Appellation Read about it on Wines Northwest's site!
Did you know that:
Starting with the 2000 harvest, Washington wines will have to meet the following parameters in order to be called a "reserve" wine:
No more than 3,000 cases or 10% of all production from a winery can be used for a bottling a "reserve" wine.
For a Washington winery to become a member of the Washington Wine Quality Alliance, it must meet these guidelines:
This is a big step for Washington. It is time that Washington gained more press and popularity and only by improving the quality of the wine produced will this happen.
Syrah, Cab Franc and Sangiovese are three of the grapes that are being utilized in many new plantings and "site specific" experimentation.
