The taste of success

Six years ago Craig and Vicki Leuthold decided to go for it.

They resigned from their jobs, sold some investments, moved from their comfortable countryside home and bet it all on a trend.

Today they can toast their good fortune.

As owners of the Maryhill Winery, the former Spokane residents are the envy of anyone who has ever sipped a glass of wine, gazed upon glacier-studded mountains and wondered “how could I do this for a living?”

The couple laughs at such business romance. Running a winery is hard work and high risk.

“We love it, but it hasn’t been easy,” said Craig Leuthold.

Among the most important variables of starting a business is timing and location, and the Leutholds nailed both.

The winery is perched on a bench above the Columbia River, where the water, hemmed in by a gorge of massive basalt cliffs, runs to the Pacific. Sun glistens off the glaciers and snowfields of Mt. Hood on clear days, providing a dramatic backdrop.

As for timing, wines made from grapes grown in Eastern Washington are attracting international attention for quality and value. Sales have soared and wine production has doubled during the past 10 years.

Vineyards now climb across 30,000 acres of Eastern Washington, where the soil, sun, temperatures and arid climate combine to make it among the best wine grape growing regions in the world.

Maryhill is part of this growth spurt, counting itself among the 300 wineries in the state. Just eight years ago there were about 80 wineries.

Most are small, family-owned businesses such as Maryhill that produce fewer than 30,000 cases of wine a year.

Now, outside investors have taken notice.

The Chalone Wine Group of Napa, Calif., owns the successful Canoe Ridge and Sagelands wineries.

And Canandaigua Wine Co., which is operated by the largest wine company in the world, Constellation Wines, owns the Washington wineries Covey Run, Columbia, and Paul Thomas. Other well-known wines owned by Constellation include Arbor Mist, Talus, and Alice White, for example.

Stacie Jacob, spokeswoman for the Washington Wine Commission, said such outside investment is among the big changes within the state’s wine industry as it continues to grow.

“There’s so much happening, but we think places like Maryhill know there’s a trend in creating what we call a ‘wine experience’ for people who are coming to Washington wineries for the lifestyle and music as well,” she said.

That’s exactly where Leuthold is taking Maryhill.

The winery grounds now have a large amphitheater that can host concert crowds of about 4,000 people. Willie Nelson played at the winery this summer. Last year’s headliner was Don Henley.

It’s part of the Maryhill plan to become a destination winery. A couple hours outside of Portland, Leuthold said the winery has had 75,000 visitors this year.

They come to taste the wines and perhaps buy a few bottles. They bring lunch and picnic on the terrace. They buy T-shirts, corkscrews, stemware, books, postcards and other retail items that attempt to remind people of the winery long after the last drop is drunk.

It’s been a winning business blend.

The Leutholds invested $5 million to start the winery, with the knowledge that in winemaking, there are no sales for at least the first two or three years. Their first wine release was in 2001. They had no reputation. No loyal customers. No awards to brag about.

“You have to be confident and able to withstand a couple of years of nothing coming in,” Leuthold said.

At first, the Leutholds tried to lease land from the adjacent Maryhill Museum, but the relationship didn’t work out, so they built next door instead.

They buy grapes from several nearby growers, including zinfandel grapes that have earned the winery applause for creating a wine usually thought of as a California specialty.

It took the Leutholds 20 years to turn their love of wine into a livelihood.

In 1984, a year after they moved to Spokane, the Leutholds found themselves in the tasting room of V. Sattui, the renowned California winemaker.

They were smitten and bought their first case of wine. Note: wine drinkers clutch your wallets now. The Leutholds remember paying $6.75 per bottle of V. Sattui’s 1980 Cabernet Sauvignon, which now would sell for many times that price.

In the years since, they have been wine enthusiasts.

Back in Spokane, Craig worked in sales for a plastics company. Vicki worked in her family’s business, Coffee Systems. They also became minority shareholders in the Fort Spokane Brewery in 1995 and learned a lot about marketing and advertising.

Ultimately, the brewery had a nice run but couldn’t sustain.

It was the first modern microbrewery in Spokane and the Leutholds thought it was poised for big things. They believed in the promise of downtown Spokane, but the city core at that time didn’t live up to their expectations. And the brewery’s long, skinny building on the corner of Washington and Spokane Falls Boulevard was ill-suited for such a business. It was razed earlier this year.

The Leutholds saved the stunning oak Brunswick bar from the brewery, though, and it now anchors their winery’s tasting room.

The Leutholds exited the microbrewery business at a time when consolidation and competition drastically cut the number of such enterprises. Across the country, beer drinkers were settling on favorite microbrews rather than continuing to experiment with all the new beers.

Craig Leuthold doesn’t think such problems will afflict the wine industry.

He points to the ongoing growth and said wineries are still trying to catch up with demand.

“There’s plenty of business for everyone,” he said. “There’s not really competition among the wineries in Washington yet.”

Indeed, Washington wineries sell only 20 percent of the wine consumed in the state.

Leuthold said opportunities are everywhere.

He points to a 2,500-case contract, beginning in the fall of 2005, signed recently with a Minneapolis restaurant called Azia.

So far, few wineries have closed in Washington state. The exception is Wyvern Cellars, formerly called Worden’s Washington Winery, in Spokane.

Instead, new businesses keep popping up in the unlikeliest of places.

At Boeing Co., for example, employees formed a wine club of amateur vintners. It wasn’t long before the best in the club started their own winery.

In Spokane, more than 120 miles from the prime grape-growing regions of Washington state, there are now nine wineries, including the successful Arbor Crest winery in the Spokane Valley, with its peaceful setting and critically acclaimed wines, and new boutique wineries such as Barrister Winery and Robert Karl Cellars. There’s also a winery in Coeur d’Alene and one in Sandpoint.

All are made with grapes grown in Eastern Washington, helping the crop achieve fourth place among fruits grown in an orchard-rich state known for its apples, cherries, pears and peaches.