The (relatively) tiny Oregon wine industry continues to lead the pack in innovation and marketing and is projected to enjoy double digit growth in the coming year. Citing increased consumption by newly-legal-to-drink Millenials, Oregon wineries find cost-effective ways to deliver wine to the masses in 64-oz reusable jugs called growlers. In an interview with Steve Thomson, executive vice president of King Estate Winery states “Wine on tap is a really, really hot project around the country right now,” Thomson said. “It’s exploding.”
And a bill passed last month by the state legislature allows customers to fill 64-oz. reusable jugs, called growlers, with wine in grocery stores, restaurants and wine shops licensed to sell alcohol.
The growler bill, which passed both houses unanimously and was signed into law on April 11, applies a common microbrew practice to the wine industry. Previous law allowed wineries to sell wine in growlers, but did not allow non-winery businesses to do so.
Now, wineries can distribute wine in kegs to restaurants and grocery outlets that opt to sell wine on tap for customers to fill up their growlers.
Businesses will receive the wine in 5-gallon stainless steel kegs rather than bottles. One keg is equivalent to about 26 bottles. A nontoxic gas called argon is used to pressurize the kegs and keep the wine fresh.
As a result, wineries will cut costs on glass, paper and corks, and will presumably sell more wine, Thomson said..
Already, Thomson said, King Estate sells about 600 kegs a month to restaurants across the country, including several in Eugene, Portland and Seattle. Selling wine in kegs is about 5 percent to 10 percent cheaper than selling it in bottles, he said.
Thomson said he expects the Millennials will fill up on wine growlers more than the Baby Boomers, who tend to buy bottled wine from grocery stores.
“It’s a great market,” said Jonathan Oberlander, owner and winemaker at J. Scott Cellars in west Eugene. Oberlander said his winery started selling wine on tap a few years ago and has doubled its sales in the past two years.
The kegs Oberlander sells to local restaurants cost anywhere from $260 to $390, depending on the type of wine.
Sundance Wine Cellars in Eugene, which sells wine from J. Scott Cellars, hopes to offer customers the option of filling up a reusable jug full of wine in the next few months, manager Randy Stokes said. Every business must be approved by both the federal Alcohol and Tobacco Tax and Trade Bureau and the state before it can begin selling wine in reusable containers of no more than two gallons. Stokes is in the process of having the federal bureau approve the change.
So far, Stokes said, customers are intrigued.
Thomson said the wine on tap and growler law is an example of local wineries adopting beer industry techniques to be competitive. Wineries need to think outside of the box to appeal to young drinkers, he said
“If you’re not pushing for creative ideas,” Thomson said, “you’re not going to stand out from the pack.”
To read the full article that appeared in the Register-Guard on May 19, 2013 please click here