Initial Doubts Give Way to Respect : Texas Wineries Are Winning Over the Skeptics

LUBBOCK, Tex. — Skeptics at first laughingly dubbed it “Chateau Bubba” and “Cactus Blanc.” Indeed, some of the early stuff was so bad that one vintner recently hired a bulldozer to crush more than 1,500 cases of his early vintage stock.

“The brash, frontier image of Texas is not consistent with the production of fine wine,” concedes John Lowey, president and chief executive officer of Llano Estacado winery near Lubbock.

But a burgeoning number of Texas vintners are now producing wine to please even the most sophisticated of palates, although wine makers in Napa Valley and Bordeaux aren’t wringing their hands yet.

Texas wine production has skyrocketed from 50,000 gallons in 1982 to 750,000 in 1986, state Department of Agriculture figures indicate.

Due to a late spring freeze, 1987 production, still being tabulated, is projected at about 500,000 gallons. But 1988 should yield more than 1 million from the state’s 22 wineries.

Quality, too, is on the increase, but the state’s young industry has suffered its growing pains.

Oddly enough, the state’s wine making hotbed is in Lubbock, a dry city where residents have to drive five miles to get a six-pack of beer. One winery can’t even sell its wine on its premises due to the liquor laws in its precinct.

In the Lubbock area, two wineries with established reputations will be joined by two more in the next year or so. But wines also are flowing from Ft. Stockton, Tow, Driftwood, Ballinger, Bryan and other areas.

Llano Estacado, founded south of the city in 1975, has seen its sales increase almost tenfold in five years, last year notching its first year in the black--ahead of expectations.

Texas Market

Lowey credits the addition in 1986 of Walter Haimann, the retired president of Seagram Distillers Co., with more than doubling Llano Estacado’s sales in the past two years.

The winery, which produced 117,000 gallons in 1987, recently got a seven-figure capital infusion from its 52 investors and plans to expand its facilities space this year, Lowey said.

Llano Estacado, which makes 10 varieties, currently markets its wines primarily in Texas, but plans to push outward in the next few years as it is able to produce more of certain varieties.

Lowey predicted that the winery would have enough Cabernet Sauvignon, a red wine, and Chardonnay, a white, to begin marketing on the East and West coasts.

“And I think we’ll be well-received,” he added.

Keeping up with demand is also a problem at Lubbock’s Pheasant Ridge, but for different reasons.

Bobby Cox, Pheasant Ridge vice president and winegrower, recently tried to convince a top-flight customer to buy only 35 cases of his dwindling stock of Cabernet Sauvignon instead of 50.

Takes Funds, Patience

“It’s painful not to be able to sell when the market is there, but 45 will wipe us out,” Cox said.

He said his winery’s cash-flow problems and lack of sufficient financing won’t allow him to keep pace with demand, despite a stock offering held a year ago.

“But there are worse problems,” he said.

A winery is not for the impatient or cash-poor, wine makers say. Operating a winery requires large amounts of capital, and return on investments comes slowly. Bankers tend to look askance at a break-even period of more than a decade, vintners say.

“Wineries have a strange cash flow, not like cotton or grain,” said Lowey. “Nine of 10 bankers didn’t even want to talk about it.”

The obstacles have proved too much for several Texas wineries, which have been forced to retrench drastically or file for bankruptcy.

The assets of Ste. Genevieve winery in Ft. Stockton, formerly the state’s largest and long regarded as Texas’ wine leader, were repossessed in October, 1986, by the Bank of America. Squabbles among the former owners have spawned multimillion-dollar litigation.

Under new ownership and operation, the winery, now called Cordier Estates Inc., is struggling to regain its footing, last year producing about 100,000 gallons of its 1.2 million-gallon capacity.

“The last crop was very weak and small because of the late frost,” said John Collet, president of Cordier Estates.

Cypress Valley Vineyard in Round Mountain filed for Chapter 11 bankruptcy in fall 1986, owner Dale Bettis said. The winery continues to operate without additional financing, producing 27,000 gallons last year, he said.

Fueled the Market

“We’ve really had to tighten our belts,” Bettis said.

Texas Vineyards in Ivanhoe also filed for Chapter 11 bankruptcy earlier this year.

A key to the success of the state’s wine industry is the size of the home market. Texas is the nation’s third-largest wine market, according to industry estimates, so vintners can do a good business without ever crossing the state border.

In keeping with the Texas spirit, the label of Llano Estacado’s best-selling blush touts the wine’s suitability for “fajitas, fresh fruit, barbecue and chicken-fried steak.”