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  • Pears, grapes provide economic punch

    Grapes join pears to give Jackson County a strong agricultural, and economic, punch
  • When John Weisinger planted a vineyard on the south end of Ashland 35 years ago, it was considered a novelty.
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  • When John Weisinger planted a vineyard on the south end of Ashland 35 years ago, it was considered a novelty.
    Folks shook their heads 10 years later, when he built a winery. The Rogue Valley was pear country. Grapes and wine were for the Napa and Willamette valleys.
    "A lot of people thought we wouldn't last more than five," Weisinger recalls. "A winery wasn't going to make it here."
    Weisinger knew longtime residents considered his efforts little more than a "build it and they will come" delusion.
    "But that's not how I looked at it," said Weisinger, who became a statewide industry leader. "I could see the tourism, the people who love to come here for other reasons and see the potential."
    At the time, there were a handful of wineries and about 300 acres of grapes in Southern Oregon. Today there are close to 80 commercial wineries and 3,000 planted acres.
    But wine-related business in Jackson County still trails pears' economic impact by a 4 to 1 ratio, say industry insiders.
    Pears and related food products account for about 15 percent of Jackson County's $13 billion to $14 billion economy, while wine's impact is creeping toward 5 percent, says Bruce Sorte, a community economist at Oregon State University.
    "We don't have a sufficient reporting system to make it real precise," Sorte says. "You have to consider tourism and how much of the tourism wine recruits."
    Mike Naumes, president of Naumes Inc., one of the West Coast's largest pear growers, admits he was among the skeptics when grapes were planted and wineries began popping up in the Rogue Valley.
    "I just didn't feel the grape thing was ever going to take off, and it was slow taking off," Naumes says. "But I'm kind of a convert now and think it will boom."
    What local pear growers overlooked was the successful transition from pears to grapes in an area adjacent to the Napa and Sonoma region north of the Bay Area, says Naumes, whose pear holdings span the interior valleys of California, Oregon and Washington.
    "There were a lot of pear growers in Lake County, California, who converted their acreage to wine grapes 20 or 25 years ago and they did very well. It took us a while to see that," Naumes says.
    Growers say it costs roughly the same to grow an acre of trees or vines; the difference comes after harvest. Fresh pears peddled through the commodity markets don't begin to produce the financial return of a well-priced bottle of pinot noir.
    Naumes has a new planting of pinot noir grapes on 15 hillside acres near his house off Carpenter Hill Road and is expecting an initial harvest in 2016. He's cleared another 25 acres nearby and likely will plant more grapes next year.
    "The first site was very difficult to plant," he says. "The challenging part was how to organize it. But it was a perfect site for pinot noir, because it was cooler. The next site is a little warmer, so we're in discussions about what to plant."
    Naumes says he's been approached by "different entities" wanting to buy the grapes.
    "We definitely have a saleable product," he says. "Down the road we may come up with someone to make wine, or go to a custom crush operation — it just depends on how large the grape industry gets."
    Climate and soil quality make the Rogue Valley a long-term pear haven, even with global competition undercutting prices.
    "My guess is that pear acreage will decline some, but wine acreage will increase substantially," Naumes says.
    "I've talked to large outfits who are looking for substantial acreage in the valley. The problem is that we don't have the large number of contiguous, flat acres that can be harvested with big machines; and that's what these outfits are interested in."
    Harry & David Holdings has diversified in several directions in recent decades, but its core product remains the Royal Riviera Comice pear grown on more than 1,600 acres in the Bear Creek drainage.
    Standing above the Coleman Creek Orchard west of Phoenix, Matt Borman, Harry & David's orchard director, peers toward the Table Rocks a dozen miles to the north, and sees plenty of potential for both pears and grapes.
    "Any agriculture here is great and there is a real synergy between the grapes and pears, because they are not necessarily competitive," Borman says. "There is timing overlap, so it means a more steady workforce potentially, which is great for the Rogue Valley and us. There is some overlapping in harvest time, so obviously if we were harvesting grapes right now we would have to make sure we had a separate group that was focused on that because the pears are obviously king for us. But that's just part of the planning process — where we put them in the valley, so they come on later — and varietal choices."
    Harry & David introduced its own wine label last year, but it neither grows grapes nor operates a winery. But that could change in the near future.
    Tom Forsythe, senior vice president for production and orchards at Harry & David, says the company has more than 600 acres available for planting, but what ultimately goes into the soil will be determined in an overall marketing plan.
    Forsythe says customer feedback and market surveys will play a role in the process.
    "It's really based on customer acceptance of our product," Forsythe says. "Our wine is being offered across the whole spectrum of gifts: club, towers and baskets. I believe we will be learning about wine for some time."
    Michael Donovan, president emeritus of the Oregon Winegrowers Association board, saw firsthand how pear orchards and grapes were compatible during his nearly 10 years as managing director at RoxyAnn Winery, before recently moving to Irvine Vineyards.
    "I believe the two forms of farming are very compatible," Donovan says. "Both produce quality fruit and the higher the quality, the better return we will see from consumers buying Rogue Valley pears or Rogue Valley wines."
    Hillcrest Orchard, part of the same family operation as RoxyAnn, was primarily a pear producer for decades, but has shifted much of its acreage and energy into grape growing.
    "I think pears remain very viable," Donovan says. "Harry & David continues to invest in its orchards and it's heartening to see them planting more acres."
    The economic impact of grapes comes to fruition when a winery sells a 2009 Cabernet Sauvignon for $32 or a 2010 Tempranillo for $34. Harry & David long ago found a way to make pears pay far better than 99 cents a pound in the produce section.
    "Harry & David does a wonderful job of selling pears for about three times as much as you expect in a can or jar," says OSU's Sorte. "If you look at the commodities sales price of a pear and Harry & David's price for a pear and compare it to the sales prices of grapes and what the wine price is, I would expect wine would have a great contribution in the local economy."
    Sorte thinks wineries have the advantage of distance from other commercial centers, creating incentives for locals to consume their products.
    "You should never ignore the fact a lot of consumption is local," Sorte says. "Restaurants, amusements, performances, wine events — whatever it is. In doing so, you plug a hole and it becomes import substitution. Instead of shipping in wine from Northern California, France or wherever, by having a good selection of wine, you plug a hole."
    The local wine industry passed one milestone when custom crush Pallet Wine Co. opened its doors four years ago. Yet another sign of the local industry's increasing maturity came this past week when Oregon Wine Services and Storage, a wine fulfillment, storage, transportation and compliance operation based in McMinnville, announced it would open a climate-controlled storage facility here in early 2014.
    Although the company has worked with some Southern Oregon wineries during its 12-year history, the demand got to the point that it made sense to open a third location, co-owner and general manager Jeff Meader said.
    While pear growers have seen increased global competition, most sell their fruit well beyond the Rogue Valley and will continue to in the future.
    "If you have a second commodity, you are somewhat insulated from the ups and downs of the primary economy," says Bart Eleveld, an agricultural economist at OSU. "The price and quality of grapes and pears don't move up and down at the same time."
    Reach reporter Greg Stiles at 541-776-4463 or business@mailtribune.com. Follow him on Twitter @GregMTBusiness.
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