Belle Vallee Cellars stresses burgeoning production rather than rustic traditions of wine

By BENNETT HALL

Gazette-Times business editor

Belle Vallee Cellars does not fit the mold of the typical Oregon winery. It has no vineyard, no retail sales room, no elaborate weekend tasting festivals at Memorial Day and Thanksgiving.

And it's precisely that stripped-down approach that has allowed Belle Vallee, after just five years in operation, to become one of the top-producing wineries in the state.

Rather than building a rustic retreat on a vine-covered hillside, the Corvallis winery set up shop in a former food-processing plant in an industrial park in the heart of town. And while it recently opened a tasting room for meetings and special events, there's no effort at this point to cater to the flocks of tourists who make the leisurely migration to Oregon's wine country each year, sampling the local vintages and picking up a bottle or a case at a time.

"What this facility was from Day One was a production facility," said co-founder Mike Magee, looking out at a gleaming row of stainless steel fermentation vats and a tractor-trailer's worth of inventory, stacked on pallets and ready for shipment.

"We like waving goodbye to truckloads of wine," Magee said. "Selling a glass at a time or a bottle at a time, that's a tough way to go about it."

Belle Vallee will never be confused with Willamette Valley Vineyards, King Estate or any of Oregon's other major vintners, which produce in the range of 100,000 cases or more a year. But with an annual production of 20,000 cases, it's in the state's top 25 or so.

Magee and his wife, Claire, started the business in 2002 with two partners - winemaker Joe Wright and lawyer Steve Allen, whose family owns the building that houses the winery.

With their urban-industrial location, they decided early on to diverge from the traditional Oregon model. Instead of sinking their capital into vineyards and tasting rooms, they would invest in production capacity while building Belle Vallee's reputation as a maker of quality pinot noirs and other Willamette Valley varietals.

"When we figured out how big we wanted to be when we grew up, (we realized) selling 20,000 cases of wine out of Corvallis would be too difficult," Magee said. "So we built a national distribution network."

In the wine business, that means lots of face-to-face meetings with restaurateurs, wine stewards and distributors, pouring samples and building relationships. Magee spends two to three weeks a month on the road, "building the brand," as he puts it. Wright and Gabe Magee, Mike and Claire's son, also make the circuit.

Their efforts have paid off. Belle Vallee now has distributors in 26 states, with three more - Vermont, Texas and Georgia - soon to join the club.

"They've been kind of a rocket ship, really, in how they've grown," said Jack Irvine of Irvine & Co., a Portland accounting firm that represents more than 100 wineries, including Belle Vallee.

Oregon has about 350 licensed wineries, most of them small, boutique operations producing fewer than 5,000 cases per year. Many are run by wine enthusiasts who may have an abundance of "passion for the grape," as Irvine puts it, but who may be somewhat lacking in business acumen. Magee, an entrepreneur with a background in electronics sales, has business acumen in spades.

"He's taken very much of a business approach to doing this," Irvine said.

One of the things Magee understood from the outset was the importance of quickly ramping up his production capacity while building the distribution channels to move his wine and the demand to sell it.

"If you've got a 20,000-case plant and you're only producing 1,000 cases, your overhead is huge - you're going to lose money, guaranteed," Irvine said. "He's going to produce his way to profitability, and he's going to do that really fast. Distribution is the fastest way to grow."

Demand, meanwhile, is getting even higher in the wake of glowing reviews in the wine press. Wine Spectator, a widely read industry publication, recently issued high ratings for Belle Vallee's 2005 pinot noir, reserve pinot noir and grand cuvee pinot noir.

Customer response was instantaneous, with a tenfold increase in online orders in the past few weeks.

"My phone was ringing before I even knew about the score," said Claire Magee.

Chris Sarles of Youngs Columbia, one of Belle Vallee's distributors, thinks the Corvallis winery is poised for even greater success.

"Can a nice Oregon winery like Belle Vallee be national in its scope? I believe so," he said.

Mike Magee thinks so, too, and he'll continue to work on opening new markets. Youngs, for instance, is currently distributing Belle Vallee in Oregon and Washington, but wants to expand the relationship throughout the West, he said.

But his current location is running at full capacity, Magee said, and he's in no hurry to expand production any further - at least for now.

"We're what we wanted to be when we grew up," he said.

Bennett Hall is the business editor for the Gazette-Times. He can be reached at 758-9529 or bennett.hall@lee.net.