The Okanagan Wine Region Is in Trouble—Can It Survive?

Last week, a deep freeze hit Canada’s Okanagan Valley. The temperature dropped to arctic numbers, hitting -16°F overnight and remaining around -4°F for almost five days.

The valley’s vines experienced widespread damage. A majority of Okanagan wineries lost both secondary buds (which most often emerge after the primary has been killed) as well as tertiary buds (the backup to the backup). Hopes are low for this year’s harvest and overall health of the vines.

“It was lethal,” says Val Tait, winemaker at Gold Hill in the Oliver Osoyoos region of the Okanagan. “I’m hearing 100% bud loss throughout the valley.”

But these frigid temperatures are just the latest in a series of hurdles facing the Okanagan. Last December, another cold front rocked the region, culling 54% of crops. Recent wildfires have devastated sections of the valley and deterred tourism, which, like many U.S. wine regions, was already depleted after the pandemic slowed visitors, who later gravitated toward ultra-exotic “revenge travel” destinations in favor of domestic trips. These factors—paired with a worsening economy and declining interest from young drinkers—has been weighing heavily on the region’s grapegrowers and winemakers.

As of January, 25% of the valley’s wineries are for sale—prompting many to wonder if the oft-cited “up and coming” wine region weather this series of recent storms?

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Icy Temperatures

Last week’s arctic blast delivered a particularly bad blow to the already struggling Okanagan Valley. Few grape varieties can survive when temperatures drop below -15°F. Between January 11th and 15th, temperatures in the northern section of the valley (between Vernon and Kelowna) lingered below -15°F for over ten hours. It’s still too early to tell the full extent of this year’s damage, but initial outlooks are grim.

When the temperatures drop this much there’s little that can be done to protect the plants. Survival depends on smart strategies—planting cold-hardy cultivars, clever vineyard management or setting up wind machines to raise temperatures.

According to Wine Growers British Columbia, after 2023’s cold snap, when temperatures dropped to a bitter -22°F with wind chills of -40°F, 45% of the total planted acreage in the valley suffered long-term irreparable damage.

Summergate Winery was one those producers that was badly affected—and this latest cold snap, which brought temps down to  -27°C [-17°F] in their pocket of the valley, will likely add insult to injury. “We were at 37% of our normal production last year, and probably less this year,” says owner Mike Stohler.

These losses haved pummeled the local economy, driven down grower and winery incomes and drastically impacted the livelihoods of winery professionals and agricultural workers. Wine Growers British Columbia predicted a job-loss of 381 full-time positions from last year’s frost and a direct revenue loss of $133 million. Industry members expect this year’s frost to further roil the local economy—which, up until this series of climate-related storms, had been experiencing astrononic growth.

The Rise of the Okanagan

While grape vines have been planted in the Okanagan Valley for over a century, the region entered a renaissance around ten years ago. Hundreds of new wineries popped up—the province grew from nine wineries in the 1980s to 348 in 2023.

With the popularity came the deep pockets. In 2017, the Vancouver-based Bai family spent $100 million building Phantom Creek Estates on the Black Sage Bench. Dating site Plenty of Fish founder Markus Frind spent almost $30 million on land in the northern section of the valley.

The weather was largely wonderful as these investors were swooping in. Excessive heat held off, as did the arctic blasts that have been showing up these past two years. The valley hadn’t had an extreme frost since the ‘90s. As a result, these new players planted a wide range of varieties—ones that can’t handle these increasingly frequent polar vortexes.

“Over the last ten years, people started planting varieties you could only get away with in warm temperatures,” says Justin Hall, the winemaker at Nk’ Mip Cellars, the first Indigenous-owned winery in North America. “They weren’t really suited to our climate.”

As the industry scaled up, overcropping—planting more vines than the land can sustain, leading to nutrient-deficient soil—became more common and vineyards started popping up in places poorly suited to grape cultivation. Many of these winemakers weren’t ready for the reality of farming in an extreme climate.

“We’re such a young region, so we had this meteoric rise without any obstacles to challenge us,” says Tait. Winemakers had the added bonus of a hugely supportive local market and a boom of tourists, quickly making the Okanagan wine a “super sexy industry,” adds Tait, which quickly “got saturated—then these challenges hit.”

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Fires, Frost and Loss in Tourism

These recent extreme cold snaps amplified other underlying issues in the Okanagan wine industry.

Production costs were already very high due, in part, to strict laws governing environmental protections, workers’ rights and health and safety requirements. The dollar value per ton shot up in the last few years. Mininum wage increased from what had been $9 an hour to over $16 in June 2023. And “no one is willing to pay for $25 to $50 bottles anymore,” says Paul Graydon, who owned Saxon Winery until he sold the project two years ago due to what he says is “an unfair playing field in British Columbia.”

Now, Graydon sells wineries through his brokerage OKWine Guys and helps other owners transition away from winemaking. He currently has 31 wineries listed for sale, ranging from small mom-and-pop places to more ambitious properties. Many are hoping to cash in on the rising prices of land. But the market is slow. “These businesses aren’t profitable on paper,” he says. “Banks aren’t willing to invest.”

Last year’s fires made things worse, when flames ripped through the west side of the valley. The West Kelowna fire chief Jason Brolund called it “100 years of firefighting all at once, in one night.”

The fires hit during August, when tourism numbers were at the time expected to rise after years of Covid-related declines. Wineries deeply impacted by yet another economic loss. “There were evacuations everywhere, and the government told visitors to leave the area during the high tourist seasons,” says Graydon. “They left and most visitors didn’t come back.”

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Facing the Future

The economic insults of fewer tourists and damages from recent climate-related catastrophes have growers and vintners wondering what’s to come. On the Okanagan Wine Industry’s Facebook group, some have considered whether they should adopt agrotextiles or change trellis practices. Others are watching what other growers in cold-climate winegrowing areas—like Ontario, the Finger Lakes and parts of Washington State—are doing. They’re considering shifting to own-rooted vines (like Washington’s Dr.Markus Keller recommends) or replanting with cold-hardy hybrids (like in Michigan and Quebec).

Of course, these regions are facing their own weather-related issues. A 2023 frost crumbled New York’s crop and farmers struggled to recover. After a decade of bad weather—hurricanes, tornadoes, oppressive heat, blizzards and droughts—Hudson Valley growers are now investing heavily in hybrid grapes. In Washington, growers and the state wine commission banded together last year to tackle the effects of climate change through a sustainability program. “These challenges are forcing everyone to turn inward and communicate and learn from each other,” says Tait. “We can’t just rely on past performance—everything is changing.”

Some industry professionals are calling for the British Columbia and Canadian governments step in with support. A group of winemakers want to be allowed to bring in grapes from Washington State or farther afield until the industry can get back on its feet. As the Silicon Valley Bank report noted, Washington State has an overstock of grapes. But nay-sayers note that the Okanagan has spent the last decade building its own name. Why dilute that brand now with out-of-province wine? And how will that impact local independent growers?

Tait, for one, believes that to survive, the Okanagan needs to solidify its identity with a signature type of wine, like Napa Valley has done with Cabernet Sauvignon or Riesling in the Finger Lakes. Currently, over 48 different varieties of grapes are grown in the region, ranging from aromatic alpine varieties to sunny southern Italian grapes. “If we want to be identified as a wine region globally, we need a signature,” says Tait. “We need to collectively move towards one type of wine.”

She advocates for Cabernet Franc, a hardy, resistant variety that ripens with beautiful dried fruit characteristics and concentration in the valley. Nk’Mip’s Hall is also excited about the Bordeaux varietal, though he’s had also had great success with Blaufrankisch.

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He points out that these sorts of growing pains are to be expected in a region that’s so young—and is optimistic that dedicated growers and winemakers will learn from recent setbacks and figure out how to better prepare for future storms.

“France has had 500 years to figure out what varieties to grow in which spots and why,” he says. “We just need to weather these speed bumps.”

Published: January 26, 2024