Traverse City Record-Eagle

Business

August 12, 2012

Region's wine industry looking to expand market

Region's wine industry looking to expand market

TRAVERSE CITY — Sean O'Keefe's family launched the grape and wine industry on the Old Mission Peninsula almost four decades ago.

Their Chateau Grand Traverse winery along M-37 has grown into one of Michigan's largest winemaking operations; they bottle close to 100,000 cases a year. But O'Keefe is not ready to pop the cork on Michigan's wine industry just yet, and won't be until it can compete with the best such regions in the U.S. and around the world.

"The next step for us is to make sure Michigan's not just a footnote in the wine industry," O'Keefe said. "People need to get out of our island up here ... we have to expand."

O'Keefe recently shipped almost 100 bottles of Michigan wine from several vintners to noted wine author and critic Stuart Piggot, a British national who lives in Germany and specializes in European wine.

The two struck up a friendship 12 years ago, and O'Keefe wanted his feedback on Michigan products' quality.

It's a challenge for first-generation Michigan winemakers to compete with vineyards and wineries that have existed for hundreds of years, he said.

But it's the only way he knows to gauge Michigan's fledgling industry against some of the world's best wines.

"You have to go out there and be proactive," O'Keefe said.

Smaller northern Michigan wineries also are branching into new markets. Customers of the posh W Hotel Washington D.C. can buy sparkling wine from L. Mawby Vineyards in Suttons Bay, now available in eight states outside Michigan.

Owner Larry Mawby said he sells less than 10 percent of the winery's 16,000 cases a year outside Michigan, so it's not a big money-maker. But he wants it available to the region's summer residents who live in other Midwest states, and also seeks the prestige of having his product available in New York, Chicago and other major cities.

"We make world-class wines here — there's no question about that," Mawby said. "What we need to do is to get people to recognize that."

O'Keefe, a vice president and specialty winemaker at Chateau Grand Traverse, uses the region's Riesling wines to pour into outside markets. Riesling, a white wine that can be crafted dry or sweet, makes up about 60 percent of his winery's production, and it's the largest Riesling producer east of the Rocky Mountains.

Chateau Grand Traverse wines are available on both the East and West coasts and throughout the Midwest. O'Keefe's brother Ed is president of Wine America, a national association of U.S. wineries.

Michigan's cooler climate makes it a perfect match for growing Riesling grapes, O'Keefe said, and the region has the potential for producing Rieslings that can rival those from Europe and other cool climate wine regions.

O'Keefe helped create the International Riesling Foundation, an international organization to promote Riesling wine produced in several continents, including North America, Europe, Africa and Australia. The IRF does market research on consumer reaction to Riesling wines, participates in trade shows and developed a "taste profile" printed on millions of wine bottles to help buyers better understand the flavors of their purchase.

The group also launched a Summer of Riesling promotion across the U.S. in which more than 200 top restaurants featured Riesling wines. Trattoria Stella restaurant at The Village at Grand Traverse Commons is one participant, one of two Michigan restaurants that are involved in the national event.

Mawby said it's difficult for wineries to break into other regional markets. There are shipping overhead costs, regulatory rules that vary by state and creating relationships with distributors, all time-consuming steps for vintners that are mostly small operators.

"It's something that a lot of wineries just don't want to do," Mawby said. "I think it's important enough to our brand that we committed our resources to do it."

The Michigan Grape & Wine Industry Council also helps promote the state's wine sector. But Linda Jones, the council's program manager, said its resources are limited and said it's up to Michigan's wineries to spread the word about their products.

State winemakers face more competition from other wineries in New York, Pennsylvania and several Midwest states.

"They make wine in all 50 states now," Jones said. "If Michigan aspires to be a top 10 winemaking region, we need our products to be able to compete on a national and even international level."

Another key to growing Michigan's wine industry is expanding its wine grape production. Northern Michigan added significant grape acreage over the past five years, up nearly 40 percent since 2006. But other regions have not, as Michigan's total grape acreage increased less than 2 percent over the same period. More than 80 percent of Michigan's grape production are Concord and Niagara varieties that mostly are used to make grape juice.

"The next step is we need more premium quality wine grapes," she said. "It all has to fold in together."

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