Uncorking Opportunities: Investing in Washington's Columbia River Gorge Vineyards

Owning and operating a vineyard combines a unique mixture of romanticism, virtuous hard work, and an avant-garde vision. As a venture rooted in real estate, it has a built-in backstop against the loss one might experience investing in a dot-com, biotech, or e-commerce startup. Instead, with vineyards, the value of the real estate keeps appreciating, and with each passing year, the property increases in value while producing cash flow beyond its expenses.

This model has been demonstrated thousands of times throughout history. In the US, it can be seen in California. For good reason, California is the most well-known state for its vinicultural and viticultural success. According to World Population Review, California produces 680 million gallons of wine annually, which is 80% of the entire production of countries like France and Spain. Washington State ranks as the second most productive wine state, with New York, Pennsylvania, and Oregon rounding out the top five.

Comparing the cost of prime vineyard land in California to similar vineyard land in Washington is shocking. In recent markets, you'll find a promising unplanted site can sell for as much as $250,000 per acre in the Napa and Sonoma region, and there have even been reported sales of as much as $1,000,000 per acre in California. As for our European counterparts, established vineyards can fetch more than $3,000,000 per acre in France.

By stark contrast, elite unplanted vineyard land in Washington can be found for less than $30,000 per acre, a small fraction of the cost of starting a new vineyard in California. Is it any wonder that Washington State is experiencing growth in plantings by roughly ten percent each year?

Even more, Washington has not suffered the harmful climate conditions that have plagued California over the last decade, where California vineyards and wineries are reeling from several years of drought, another year with too much rain, years of devastating wildfires, and a year of vine-damaging frost. As a result, investors (and many California wineries) are naturally looking to Washington State for expansion and diversification.

In addition, Washington State's Columbia River Gorge region (often referred to as, simply, "The Gorge") offers longer growing days, more plentiful water, more predictable and favorable weather conditions, and land at nearly the identical latitude to the Bordeaux region of France.

One might wonder if a qualitative difference exists between California fruit and Washington fruit. If so, it skews toward Washington grapes being superior. A study by Cambridge shows that average critic scores for Washington's Cabernet Sauvignon and other Washington Bordeaux varietals are higher than California's ratings. Washington wineries often produce wines scoring 99 and 100 points from some of the most credible critics in the world. This would not be possible without outstanding grapes.

It takes truly special land to develop an elite vineyard. But not all vineyard land is the same. When choosing your site, there are important variables to consider, such as (1) heat units in your micro-climate, (2) wide disparity in daily and evening temperatures during the fruit ripening phase (called the "diurnal shift"), (3) soil composition, (4) quality and quantity of your source of water, (5) adequate and consistent wind flow, and (6) orientation. These are the vital components of "terroir," which vary from site to site.

Few vineyards enjoy top scores on three of these crucial components. Very rarely are vineyards ideal in all of these elements. It takes an experienced and discerning eye to find the correct vineyard site. If you have been considering owning a vineyard and you find a location like this, you want to move on it quickly.

There is unique land in the Columbia River Gorge between Washington and Oregon, known as Goodnoe Hills, that checks all these boxes. It provides each one of the elements of terroir necessary for a truly world-class vineyard. This property enjoys the benefits of ideal heat units, optimal diurnal shift, sandy loam soils with just enough rock to provoke beneficial stress on the vines, inexhaustible water from the Columbia River aquifer, desirable southwestern orientation, and dependable winds to move air across the vines to inhibit uneven pockets of weather plus reduce mildew and pest issues.

To date, just one vineyard has been established at this location, and the results are what one would expect. Wineries are raving about the resulting fruit. Indeed, winemakers with more than 30 years of experience making award-winning wines have called it the best fruit they have ever seen. These are the kinds of outcomes that are possible when you choose the correct site.

Land like this did not happen overnight. The soils in the Columbia River Gorge were left behind 20,000 years ago by cataclysmic glacial lake outburst floods that swept periodically across eastern Washington and down the Columbia River at the end of the last ice age. These floods resulted from periodic sudden ruptures of the ice dam on the Clark Fork River that created Glacial Lake Missoula. After each ice dam rupture, the waters of the lake would rush down the Clark Fork and the Columbia River, flooding much of eastern Washington and the Willamette Valley in western Oregon. The floods carried rock and sand downstream, carving the Columbia River Gorge and leaving behind ideal soils for vineyards in its wake. In fact, the new Columbia Hills American Viticultural Area (AVA) is organized around vineyard land where these cataclysmic floods deposited these unique soils. This new pending AVA has been perfected and is awaiting final approval by the Federal Tobacco Tax and Trade Bureau (TTB).

Growing wine grapes in the Columbia River Gorge was originally studied in the 1960s by Howard Willson, who was the Washington State County Extension Agent for Klickitat County, Washington. Howard planted the first wine grape clones in the Gorge, helping to validate the region as an ideal vineyard location. At 96 years old, Howard is now one of the owners of a vineyard in the Goodnoe Hills area, where he has participated in planting the vines, harvesting the grapes, and making wine from the fruit.

Goodnoe Hills has a rich history. Long after the dynamic Missoula floods gouged out the picturesque Gorge, we know that Lewis & Clark's Corp of Discovery expedition floated past the area on October 20, 1805, west on their way to the Pacific Ocean and traveled back across the land on their journey back home on April 22, 1806. It is land that the pioneers homesteaded in the 1800s and upon which their heirs have run cattle and grown wheat crops. Early Italian settlers later recognized this land because the growing conditions were similar to Sicily and screamed for orchard and vineyard development. Today, the people of Goodnoe Hills honor the area's historical traditions, both expressly and through their loyal stewardship and deep appreciation of the gifts of the land and river. In Klickitat County, rural values are respected and revered, where the Grange Hall is still a community center and potlucks are commonplace. As the locals like to say, "This is truly God's country."

Seeing such special property firsthand will take your breath away. I've watched countless people stand with their mouths agape at the natural beauty of the land, the river, and Oregon's Mt. Hood in the backdrop. There is a solemnity to it, a rightness in it.

Much more than a lucrative investment, land like this is magical. All the financial reasons that might draw one into establishing a world-class vineyard upon land such as this coalesce with the intangible correctness of it all. Seeing is believing. It all adds up to an investment opportunity in Washington's Columbia River Gorge with rewards far beyond the bottom line.