B.C. wine production grows beyond traditional areas

British Columbia's wine industry is making inroads into non-traditional growing areas.

The B.C. Wine Institute says the number of hectares devoted to wine grape production rose by 8.7 per cent to 3,946 over the three years to August 2011, according to the most recent statistics available.

And compared to the previous study, done in 2008, the number of vineyards rose by 21.7 per cent, to 864.

The report, by Mount Kobau Wine Services, counted 210 licensed grape wineries in B.C. and 24 additional growers who indicated they would start a winery in the future.

"The number of wineries almost seems to grow on a monthly basis," Miles Prodan, executive director of the B.C. Wine Institute, an industry association, told CBC News.

One reason for the expansion was the rapid rise in land costs in the more traditional areas of the Okanagan, Similkameen, and Lower Fraser valleys as well as the Gulf Islands and on Vancouver Island.

Although those prices have now come back down, the bump up was enough to prompt some entrepreneurs to try new areas back in 2008, and now those operations are producing.

"It's quite significant," Rolf de Bruin, proprietor of the Fort Berens Estate Winery, told CBC News.

Depending on assumptions about financing, the selling price required to cover the costs of buying the better land in currently producing regions "translates to about $3 to $4 a bottle," de Bruin said.

De Bruin and co-founder Heleen Pannekoek looked at Ontario and B.C.'s biggest producing area, the Okanagan, after they immigrated from the Netherlands in 2005.

Rolf de Bruin says land costs were a significant factor is his decision to become a pioneer in B.C.'s newest wine region. (Fort Berens)

But by 2008, when they were ready to take the plunge, competition for land, both for recreation and for agriculture, had led to soaring prices in the Okanagan, which were well beyond their comfort zone.

In the best areas, they were looking at about $40,000 per hectare.

"If you build that into your business model" said de Bruin, "then it becomes very hard in the long run to become profitable unless you start raising the selling prices of your wine to the point where you take the risk you'll outprice yourself versus the import market."

So, after running months of analyses on soil, climate and tourism traffic, they opted to establish themselves near Lillooet in the Fraser Canyon, where land costs were a tenth of what they were in the Okanagan, making them pioneers in the province's newest wine region.

"That obviously has a huge impact," says de Bruin, "It gives us a lot more flexibility when economic cycles hit, so we are able to absorb fluctuations in supply and demand."

In May 2009, they planted eight hectares with Riesling, Pinot Gris, Chardonnay, Pinot Noir, Cabernet Franc and Merlot.

Now in the middle of their second harvest, they are reassured by the fact that their crops are maturing early and the vineyard is prospering, although de Bruin says that's early days in the wine industry.

"It'll take another 25 years to determine whether or not we were bold and innovative or whether we were fools."

The trend to trying new areas has led to expansion not just in Lillooet, but also Creston, Kamloops, the North Shuswap, the Kootenays, Grand Forks, and Lytton.

And Prodan, of the B.C. Wine Institute, says there's also interest by potential investors in developing vineyards in the Arrow Lakes area in the east Kootenays.

The Baillie-Grohman Estate Winery in Creston grows Pinot Gris, Pinot Noir, Chardonnay, Schoenberger and Kerner grapes. (Baillie-Grohman )

The Baillie-Grohman Estate Winery is another pioneer in new areas, setting up in Creston, in the Kootenay district less than 10 kilometres from the U.S. border.

Proprietor Bob Johnson says the choice had less to do with land costs and more with family connections. Originally from Alberta, Johnson has had family there for 20 years.

He and co-owner Petra Flaa originally planted three hectares in cherries, but couldn't resist the urge to move into wine. Even though it meant selling their existing property and buying new land with the right microclimate and the right soil, they made the plunge and planted their first vines in 2007.

Johnson and Flaa grow Pinot Gris, Pinot Noir, Chardonnay, Schoenberger and Kerner and also buy Gewurztraminer grapes from a neighbour.

The growing scale of B.C.'s industry has also helped them.

Although their's is a cool-climate grape-growing area, they've been able to produce wine using grapes from a warmer climate area about 200 kilometres away.

"In the last year we went out to the Similkameen to purchase some Merlot and some Cabernet Sauvignon grapes," he says.

"We have them picked in the morning and by the evening they're in our winery and being crushed and it's worked out really well so far."

Bob Johnson says family connections led him to choose Creston as the place to establish his winery. (Baillie-Grohman)

Well enough that with only their fourth harvest now underway, Baillie-Grohman has won three silver medals and three bronze medals at the 2011 Wine Access Canadian Wine Awards.

"That goes to show the wines we are producing here can compete with any wines in Canada," Johnson says.

How sustainable the expansion is will depend on the weather. The province hasn't had a really harsh winter in years, and Prodan says that will tell whether the growth into new areas has staying power.

"It'll really be the test," he said. "And I suspect they will have to adjust on what they have planted and try to find that right varietal for those growing conditions."

The size of the B.C. industry has reached a nice equilibrium in the last eight years, de Bruin says: still small enough to be fraternal, with players within the industry and still willing to help each other with advice and knowledge, but with enough scale that its reputation is enough to give consumers confidence about trying wines from new producing areas in the province.

"In global terms, we're a very small wine region and we're competing with some very large players in California and Australia," says de Bruin. "So that support from other vintners and other winery owners to support us in our venture here in Lillooet has helped move us along to where we are today."

"I think what you'll see in the future is that B.C. will have different regions that are small and that each have their own identity, their own terroir," de Bruin said.

"Make no mistake," Prodan says. "These guys are pioneers in pushing the envelope in going out there but that's how it's done. You have to go out there and take the risk and hopefully reap the rewards."

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