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Thinking outside the bottle Rob Folin samples a wine at Folin Cellars on Friday. [Mail Tribune / Jamie Lusch] Sunday Jun 4, 2017 at 7:45 PM Jun 4, 2017 at 7:45 PM Greg Stiles Mail Tribune @GregMTBusiness In Rob Folin's dream world, he would grow just the right amount of grapes, produce just enough cases, and sell them all to wine club members. It would make life much simpler and maybe even get him a "how to" book contract. The reality for Folin and other Southern Oregon winery owners, however, is just as complex as the aromas and flavors wine judges encounter. Vintners will tell you it is relatively easy to grow grapes and make wine. Selling the wine and keeping the estate books in the black is another matter. "It's one thing to make wine and a completely different thing to sell it," Folin said. With dozens of acres planted and going into production each year, more grapes and wine mean more competition. If the region's vintners merely depended on wine sales, the market couldn't sustain its growth. Napa Valley didn't became a wine juggernaut on the quality of it vintages alone. It helps having close to 10 million people within a couple of hours driving distance. The Portland market is less than a third of that, but it has a similar economic impact on the Willamette Valley wineries. While Southern Oregon is elbowing its way into wine conversations, it lacks the population to sustain the wine industry by itself. That means events, weddings, clubs, bulk marketing, as well as crushing and bottling for other vineyards. Recently, a handful of local growers have mixed in marijuana plants in their vineyards. Kriselle Cellars owner and Southern Oregon Winery Association board member Scott Steingraber thinks developing alternative income streams is critical for most wineries. "When a customer rolls up to a winery, it looks like they're making a ton of money," Steingraber said. "But it's really a tough business without a lot of margin. When you look at the up-front capital costs, it takes years and years and years to turn things around and be profitable." Steingraber said 75 percent of his winery's revenue comes from club and tasting room purchases, while wholesale markets and restaurants account for the other 25 percent. Rather than rely on a distributor, Kriselle handles its own marketing to restaurants, he said. The ability to sell wine outside the state is critical for a winery's bottom line, said Kara Olmo, who operates Wooldridge Creek Winery with her husband Greg Paneitz in the Applegate Valley. A label producing 1,000 cases without a sales plan may be stuck with a lot of wine its warehouse. "It's very difficult to sell a bottle of wine to a consumer," Olmo said. "Whether you're bottling for yourself, a neighbor or to another state, if that bottle of wine doesn't have a way to be sold at a competitive price so the business can reinvest, then it makes it difficult to make the next vintage.  If you're making 1,000 cases one year and then 2,000 the next year, rather than talking about how much you make, you better be talking about how much you're selling. A warehouse of wine doesn't increase in value over time." When there's excess capacity, Folin said, the answer isn't necessarily crushing more juice. At the same time, it makes room to process someone else's fruit. "Very few wineries aren't doing this, at least on a small scale," Folin said. "If you're spending all this money on a winery, and you have vineyards coming on line, you have the capacity to do stuff." Folin said it's viable path for newcomers. "You can see how much work and how much money is involved," he said. "It takes a lot of capital up front to get going in this business. Not having money tied up in a building is a good way to see if your brand is viable." Folin gives high marks to the locals, who have embraced the expansion. "When we opened our winery in the fall of 2009, people didn't know how to swirl a glass," Folin said. "Now they come in and ask if they can see the cellar again. Now they are total connoisseurs. The knowledge growth curve is absolutely getting there." That puts the onus on growers and wineries. The ability to draw new buyers into the tasting room is important, Olmo said. But even more so is the ability to sell wine outside the region. Positive play in the wine press has lured more visitors to Southern Oregon, and Wooldridge Creek has boosted its traffic with an onsite creamery. "That's a great symbiosis for us," Olmo said. "It's helped us to be more competitive and increase our share of visitors." The real upside, she said, is in establishing partnerships with out-of-state labels. Wooldridge Creek, and Gold Hill-based Del Rio Vineyards ship bulk wine to New York-based subscription meal service Blue Apron, which includes paired wine as an option. Blue Apron purchases contracts for bulk wine, bottles it and applies the provider's label. "Blue Apron is sending Wooldridge and Del Rio wine all around the country with our story and informational sheets," Olmo said. "So people are instantly aware of the wine Southern Oregon has. That may be the one thing that pushes them over the edge to plan a wine-tasting trip to Oregon." — Reach reporter Greg Stiles at 541-776-4463 or [email protected]. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at www.facebook.com/greg.stiles.31.