Wine Sales Stay Strong

Some winemakers worried at first, but sales have grown

Some winemakers and wine distributors were nervous about competing with hard liquor for grocery shelf space, but it all worked out.

By Ángel González

Seattle Times business reporter

RELATEDAt the onset of liquor privatization, winemakers and distributors fretted about competing for shelf space at grocery stores with the hard stuff. It turned out OK, however. 

“We all thought they were going to take the wine section and fill half of it with spirits,” said Greg Lill, head of DeLille Cellars in Woodinville. “Some wine shelving did go away. But it was never as traumatic or as bad as it was going to be.”

Some confusion came at the beginning as wine distributors figured out how to display items. “It just created chaos,” says Lill’s wife, Stacy, who created the O Wines brand in 2006 and later sold it to Ste. Michelle Wine Estates.

Now that things have settled down, sales have increased. “The change in the law has resulted in a wider availability of Washington state wines, both in breadth and depth,” says Michaela Baltasar, a spokeswoman for the Washington State Wine Commission. Sales are up 15 percent versus last year, she said.

Almudena de Llaguno, who heads Classical Wines, a Ballard-based importer of wines from Spain, says that on the eve of the transition a lot of distributors and grocers withheld some spending as they planned to steer more of it toward the newly authorized spirits. But “when the rush was over, everything came back to its normal course,” she said. “We only hope (spirits) are profitable to them, which benefits us all in the long run.”

Initiative 1183 also changed some rules that benefited wine consumers. It allowed winemakers to offer volume discounts, and retailers such as Costco to buy wine straight from the winery into their warehouses.

“Our wine pricing has come down quite a bit,” said John McKay, Costco’s northern-division chief operating officer.