Glass is half full: Wineries report robust sales

Nearly all northern Michigan wineries increased sales significantly last year, with the region's two largest – Leelanau Wine Cellars and Chateau Grand Traverse – both jumping more than 20 percent, solidifying their positions as the No. 1 and No. 3 Michigan wine sellers, respectively, within Michigan.

That's the big news from the Michigan Liquor Control Commission's 2007 tax-paid report, summarizing the sales of beer, wine and spirits in the state based on liquor taxes paid.

Leelanau Cellars turned heads last year when its Michigan sales surpassed longtime leader St. Julian of Paw Paw. The Omena-based winery built on that lead in 2007, selling more than 95,000 cases of wine in the state, up 25 percent from 2006. Meanwhile, St. Julian's Michigan sales stayed flat, at about 74,000 cases.

"We've been gearing for growth, and growth is occurring," said Bob Jacobson of Leelanau Cellars. The winery moved into a new production facility triple its previous size last year, marked its first whole season in a expanded, more prominent tasting room right on M-22 and hired a new winemaker. While no vines were planted this year, the winery's planted for the last five, Jacobson said.

St. Julian, which distributes in eight Midwestern states, remain Michigan's biggest wine producer, factoring in the out-of-state sales. President David Braganini said the winery expects to produce about 110,000 cases total this year. But he sees the day ahead when the winery that now bills itself as Michigan's oldest and largest will retire the latter term. And that's just fine, Braganini says.

"As far as matching in volume and total gallons, if we're surpassed, so be it," Braganini said.

With its facility at its limits, St. Julian's strategy now is to sell more of its more expensive wines, Braganini said. A new line, Braganini Reserve, which sells for between $15 and $30 per bottle, is an example.

"There's just no more room to grow here volume wise, so we're trying to grow dollar wise," he said. "It's working slowly."

Jacobson said Leelanau Wine Cellars doesn't aspire to be the biggest, either, though that may happen. He said they expect growth this year to taper to between 7 and 10 percent.

"It's nice, but it's not really a goal," he said. "It's just sort of a result of what we're doing."

Chateau Grand Traverse, which moved into the No. 3 spot last year, overtaking Tabor Hill of Buchanan, increased its sales by 22 percent to more than 63,000 cases. The trio of Leelanau Cellars, St. Julian and Chateau Grand Traverse account for 50 percent of the Michigan wine sold in Michigan.

Eddie O'Keefe, president at Chateau Grand Traverse, said the 2007 sales trend has held so far into 2008, too. The winery is in the midst of a multi-year expansion that aims to allow it to scale up to producing 100,000 cases. O'Keefe credits the winery's growth to its distribution efforts – including in California.

"We've been very, very aggressive and proactive in distribution," he said.

Overall, Michigan wine sales were up 13.4 percent, according to the report. Other highlights:

– Old Mission's Chateau Chantal moved into the No. 5 case sales spot,

overtaking another southwest producer, Fenn Valley.

– Suttons Bay- based Black Star Farms again led Michigan wineries in terms of direct shipping.

– After moving into a new facility in July 2007, Left Foot Charley grew the most, increasing sales from 160 cases in 2006 to almost 1,200 last year.

– The U.P.'s only winery, Mackinaw Trail, which will open its second

tasting room in Mackinaw City this summer, recorded the second biggest growth spurt, more than doubling sales from 761 cases in 206 to 1,800 last year.

The split between Mitten Wine Logistics partners Eddie Baur and Scott Fochtman in April means a choice lies ahead for many wineries. Baur left the company he founded in 2006 for Leone Imports, a smaller Detroit-area distributor. Fochtman continues to run Mitten. Both want the 16 winery clients they built at Mitten, which deals only in Michigan wines.

Mackinaw Trail owner Ralph Stabile is staying with Mitten.

"It remains to be a great concept that I will continue to back," he said.

Meanwhile, Chateau Fontaine, of Lake Leelanau, is following Baur to Leone.

"Mitten was created by Eddie, and we need a Michigan distribution run by someone that has a complete knowledge of Michigan wines like he does," said owner and winemaker Dan Matthies.

Gills Pier of Northport is interviewing to find its best partner.

"With Eddie's departure from Mitten, it has forced our company to take a step back and say 'Where are we going with our sales, and who is the best person/company to make that happen?'" said owner Kris Sterkenberg.

Cari Noga has covered Michigan's grape and wine industry since 1999. Read her blog at www.michgrapevine.com. Send news and column ideas to her at cari@michgrapevine.com.

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