Top-Notch Winemakers Struggle with Bottom Line Vintners in Washington state that are turning out award-winning wines are still having a tough time making ends meet. Dave Stephenson is one: His Syrah wins rave reviews, but he supplements his income as a consultant to other wineries.
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Top-Notch Winemakers Struggle with Bottom Line

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Top-Notch Winemakers Struggle with Bottom Line

Top-Notch Winemakers Struggle with Bottom Line

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From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.


And I'm Michele Norris.

The mention of fine wine may conjure up an elegant chateau in the country, perfectly tended vineyards, or beautifully appointed tasting rooms. The reality can often look quite different.

NPR's Wendy Kaufman reports from Walla Walla, Washington, where one winemaker does his work on a concrete slab at an abandoned Air Force base.

WENDY KAUFMAN: As a chemistry-loving college student in the 1980s, Dave Stephenson imagined himself making premium beer, but that didn't pan out. He settled for social work, technical writing and ran a small contracting firm. But he kept hearing about the quality of Washington wine and a place called Walla Walla in the far southeast corner of the state.

Mr. DAVE STEPHENSON (Winemaker): I came over and visited and looked around and saw the land prices and it just reminded of Napa Valley 30 years ago. And I tasted the wines that were coming out of here and the quality of winemaking and decided to move. So I did.

KAUFMAN: He sold his house, a small sailboat, and cashed in his retirement accounts. Armed with $150,000, he took a leap of faith and an $8-an-hour job at a local winery. He studied the UC Davis winemaking curriculum at night.

Mr. STEPHENSON: It was pretty fast. I mean I was very surprised at how fast things happened, and that sort of told me that I was in the right place at the right time.

(Soundbite of noise)

KAUFMAN: Today, the proud owner of Stephenson Cellars is cleaning out his wine barrels with a power washer; then he'll put the wine back into the barrels for further aging.

Mr. STEPHENSON: This is one of my stronger lots. This is a fantastic venue in the (unintelligible) hills, very young vines, but the last couple of years just gotten better and better every year, so I have very high hopes for this.

KAUFMAN: You won't find any gleaming stainless steel tanks at his winery. Those cost too much, nor is there high-tech automated equipment. Here it's just the basics - quality oak barrel but a huge mop bucket for capturing wine, and plastic pitchers for pouring it into barrels.

It's not exactly romantic at this abandoned Air Force base on the east side of town. Dave Stephenson pays a $1,000 a month rent for a small concrete slab and what looks like a standard-sized garage. Actually, it was the base barbershop.

Mr. STEPHENSON: I kept the doors. I couldn't throw those out, but I did take the stalls out to make room for barrels. I don't know how much artistry went into those haircuts, but I'm trying to bring it up a notch.

KAUFMAN: And bring it up he has. Last November, for example, the wine enthusiast gave his 2003 Serra(ph) a score of 94. Ordered at a restaurant, the bottle might cost $60 or $70. A high-and-wine(ph) shop might sell it for 32. Stephenson's profit on that bottle: two bucks.

Mr. STEPHENSON: For me, the goal is to not lose money - that's the big goal. And that's the thing; there's a misperception in the wine industry, to think that there's a lot of money being made. There's a lot of money changing hands. There's not necessarily a lot of money being made.

KAUFMAN: Consider the cost to make a single bottle of his premium wine: nearly $4 to acquire grapes from a vineyard; $3 goes toward the cost of aging in those expensive oak barrels; adding the bottle, cork, label and everything else, and it comes to about $14 a bottle. Stephenson sells about half of his bottles to distributors for $16. The rest he typically sells at the full retail price to winery visitors and those on his mailing list.

The trick to making money is to sell as much at full retail as you can. But developing the reputation to do that takes time, and he isn't quite there yet. Last year's profit from his winery: about $10,000.

Mr. STEPHENSON: That was a great year. I think I lost $30,000 a year before and maybe a 100, 150 the prior year. So…

KAUFMAN: That you lost?

Mr. STEPHENSON: Well, it just goes in the hole, and nothing comes out. And so it takes a while. You know, it'll be 10 years before I'm recovering the money that I invested at that point.

KAUFMAN: So for now, at least, there is no chateau, just a cute 1940s bungalow that Stephenson and his long-time girlfriend call home. As for health insurance, Stephenson says he got it only last year. Up until then, he needed that $200 a month to pay for grapes.

Looking back, he says, he didn't know it would be so tough financially. The cash flow was horrible. It takes two to three years from harvest to bottle and all that time the money is going out; very little is coming back in.

To combat that, Stephenson has turned to consulting. Last year, he made about $35,000 working with new wineries. One of them is Otis Kenyon, owned by Steve Kenyon and his wife, Deborah Dunbar. On a recent afternoon, winemaker Stephenson, his clients and invited guests head over to a storage facility. There, Stephenson will siphon the Kenyon wine out of the barrels for a final tasting.

Mr. STEPHENSON: Could you get a shower?

Unidentified Woman: I'm climbing up this blue ladder-like thing, with barrels stack, one, two, three, four high; doesn't look very safe, sort of perched up there…

KAUFMAN: Safely back at his client's apartment, Stephenson and the others crowd around the dining room table to taste the samples. It's a critical moment. They have to decide which wine will be put in bottles straight out of the barrels, which will be blended and is any good enough to be labeled reserve and carry a premium price.

Steve Kenyon has a clear favorite.

Mr. STEVE KENYON (Winemaker): This (unintelligible) which I have loved since birth, but I want anybody else's opinions about it too, because I think if there are any reservations, this is the time to decide not to do a reserve merlot.

KAUFMAN: Everyone loves it and Kenyon confesses to a bit of relief. Winemaker Stephenson is relieved too. If the wine isn't up to par, he doesn't get his full consulting fee. But for the winemaker, the trickiest part is still ahead. Everything has to go just right for a fine wine to be bottled and ready for sale.

Mr. STEPHENSON: It's great that it tastes good on the dinner table here, but if it doesn't make it in a bottle and if it doesn't last another six months before it goes to market, then it's been a big waste of time and money. It has to come together now or I'm a dead man. So…

Unidentified Man: Well, there's always '06.

Mr. STEPHENSON: Oh yeah. I suppose you can always look at the next year, but this has to go, just has to go.

KAUFMAN: Stephenson says there won't be much sleep for him till the bottling is finished and only after he's pulled the cork and loved the wine will he be able to celebrate.

Wendy Kaufman, NPR News.

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