In Vino Veritas

Northern Michigan’s wine industry has come a long way in 35 years, and more growth is in the forecast — so long as property values and weather patterns don’t ruin the party
Black Star Farms’ Don Coe and Chris Lopez have 10,000 cases of wine in storage. Photograph by Nick Martines

When Don Coe ran up against a local ordinance limiting the size of wineries in northern Michigan, he didn’t try to fight city hall. Instead, he leased a 76-acre fruit farm on a neighboring peninsula and started planting more Riesling and Pinot Noir grapes. “The demand was there, but we had a supply problem,” says Coe, managing partner of Black Star Farms in Suttons Bay, on the Leelanau Peninsula.

Since 1999, when Coe and his partner, Kerm Campbell, first established a stake in northern Michigan, their business has grown exponentially. Consider: last year revenue was $3.5 million, up from $200,000 a decade ago. In addition to producing more than 30 wines and spirits, Black Star Farms has introduced a creamery, a bed-and-breakfast inn, riding stables, a distillery, and dining options.

“It’s not like we opened our doors and people came running in,” says Coe, from one of two cellars he built into a hillside to store and age wines and cheeses. “It wasn’t easy. First, the wines have to be first-rate because you’re going up against France, Spain, Chile, and California. You also need great distribution and plenty of cooperation from Mother Nature.”

Given that the Leelanau and Old Mission peninsulas are ideally suited for wine production — the bays of neighboring Lake Michigan keep grapevines from sprouting prematurely in the spring and stave off early frosts in the fall — weather may not seem like a big issue. But it is one of several variables — as well as ever-changing consumer tastes, labor and tax issues, and access to capital — that go into winemaking.

That Michigan’s $300-million wine industry is growing — sales volume rose, on average, 15 percent between 1995 and 2007 — is a testament to perseverance, luck, and dedication. And even as overall wine sales were flat last year, Michigan’s 65 commercial wineries still managed 5 percent growth, says Linda Jones, director of the Michigan Grape and Wine Industry Council in Lansing.

Northern Michigan’s wine country is anything but predictable. While the industry didn’t take root here until the 1970s, it has accelerated its quality and reach over the last decade. And although glaciers provided some excellent soil conditions, that may be the region’s only constant. Apart from weather, Michigan’s wineries must hold the line on cost hikes (the most popular price range is $10 to $15 a bottle), as there’s considerable competition from California — a glut of wine last summer saw lower prices at Costco and Whole Foods.

“Wine production is not for the faint of heart,” says Ed O’Keefe, founder and CEO of Chateau Grand Traverse on Old Mission Peninsula. “We’ve bucked the recession, but you have many other challenges. You really have to operate on all cylinders. You have to be an expert in agriculture, lobbying, retail, hospitality, manufacturing, distribution, legal matters, and expansion into other states.”

O’Keefe, whose two sons help him run the business, should know. After spending his early career as a federal narcotics agent, he developed and operated nursing homes all across metro Detroit. When he sold the business in 1973, he headed to Old Mission Peninsula and bought 55 acres of land overlooking East Grand Traverse Bay.

With a bay dominated by cherry farms, few people believed O’Keefe could make a go of it, especially after he spent a small fortune moving 1 million cubic feet of dirt to maximize the vineyard’s exposure to the southwestern horizon. Not only was Chateau Grand Traverse the first vineyard on the two peninsulas, it was arguably (and still is) one of the largest winegrowers in the Midwest, with 120 acres under ownership and another 50 acres under lease that, together, generated 80,000 cases of wine last year.

“No one knew what Michigan wine was in the late ’70s,” O’Keefe recalls. “So I went on the road to California — really, anywhere I could find an audience. My big break came in 1979 when I got into the London Chop House. From there, it was steady pressure evenly applied. You just keep working away at it. I can tell you [that] the last six years have been great, and we’re looking at different distribution models that could really [help] the entire industry.”

Just as every picture tells a story, winegrowers are often shaped by the industries they leave behind. For Robert and Nadine Begin, who married after serving the Archdiocese of Detroit as a pastor and a nun, the wine business almost seemed a spiritual calling. “I can’t tell you the pleasure we derive from producing wine,” says Robert, who was CEO of a construction-management company that served nine major cities from 1972 to 1983.

After production began in 1991 (it takes four to five years before vines are mature enough for winemaking), the Begins’ Chateau Chantal has grown into a year-round business. Last year, the vineyard produced 18,000 cases from 35 owned acres on Old Mission Peninsula, along with 32 leased acres from three neighboring farms.

The Begins’ only child, vineyard director of marketing Marie Chantal Dalese, believes that more people these days — especially men — are drinking wine. “[One of the] things that have helped the industry grow is mechanization, which hit northern Michigan five years ago with the assistance of state grants, which naturally improved our production cycles,” she says. “Wine used to be something you drank maybe once a week, but now people are drinking a glass or two with dinner every night.”

To help encourage patronage at their 11-room inn during the off-peak months between November and March, Dalese and her parents offer cooking classes and other interactive programs. “You learn to be flexible in this business,” Dalese says. “Our whites will be fantastic this year, given the cooler weather, but we may be picking the reds in late October, which is around two weeks later than normal.”

In addition, the winery purchased a small vineyard in Argentina in 2004 that grows Malbec grapes. Dalese says the move helped round out Chateau Chantal’s offering of red wines. “The land is cheaper, and the labor is cheaper,” she says, “so our customers are getting great value. It was a good move for us.”

Other wineries, meanwhile, afford some celebrity star power. While Silvio (Tony) Ciccone may be known for his Cabernet Franc and Pinot Noir, even he admits his famous daughter, Madonna, has brought his winery notoriety. “In general, the business has been good,” he says, “but we had an early freeze in 2003 and lost 80 percent of our fruit. We’ve done well with the whites, and we’re getting better at the reds, but when you consider France had a 500-year head start on us, we’re doing well.”

A former manager of flight-control systems at General Dynamics, where he worked for 20 years, Ciccone says he and his wife, Joan, moved to Suttons Bay from Rochester Hills more than a decade ago for a lifestyle change. “I grew up with wine, as my father had brought skills over from the old country (Italy),” he recalls. “I produce about 2,500 cases a year on 14 acres. We’re looking to add a Malbec grape shortly; I’m really looking forward to that.”

Apart from wine sales, land purchases and leases on the two peninsulas have picked up in recent years, which can be viewed as either a half-full or half-empty phenomenon. That prices are rising brings greater value, but if the land gets too expensive, it may keep investors and winemakers away.

“There’s a lot of room for growth, and you can see the activity as more cherry orchards are converted over to vineyards,” says Dan Matthies, who with his wife, Lucie, owns Chateau Fontaine in Lake Leelanau. “Apart from local investors, we’ve had interest from people in California, Italy, and the Midwest.”

A broker and former owner of two ski and golf shops in northern Michigan, Matthies says he just concluded a deal with investors from Tuscany who plan to grow Pinot Grigio grapes that will be made into wine and sold in Italy. “Outside investment is the next evolution in our industry,” he says. “We have great growing areas, rich soil, and a wonderful microclimate. People are starting to find that out.”

Other factors that have propelled wine sales, both in northern Michigan and around the state, are stiffer drinking laws, improved technology, and ingenuity. One of the latest trends finds winemakers covering their sweet grapes with plastic netting in late summer. “A swarm of birds can come in and eat your grapes within an hour,” says Eddie O’Keefe, Ed’s son and the president of Chateau Grand Traverse. “That can cost you a lot of money. [We’ve also] added small fences around the vineyards to keep out voles and mice.”

What’s more, the vineyard, in a toast to French growers, has planted rose bushes at the end of every row of vines. “Rose bushes are [affected] by a fungus or disease before a vine, but with modern technology, we don’t rely on them anymore,” Eddie says. “But it’s a nice tradition.”

In addition, Eddie contends that harsher penalties for drunk driving are encouraging more people to drink wine at home. “All the competition we have around here and across the country is great for consumers,” he says. “It keeps us on our toes. Right now, there’s too much supply, so if you can keep your wine priced between $10 and $15 a bottle, you’re going to do a lot of business because that’s where 90 percent of the sales fall.”

Winemakers have also increased their marketing efforts in recent years. Across the state, there are wine events for every season, such as the “Harvest Stompede” along the Leelanau Peninsula (which includes a seven-mile run), as well as wine and food festivals, art fairs, and judged competitions.

“It’s the sport of kings,” Eddie says. “Winemaking is a highly capitalized endeavor, and California is the 800-pound gorilla. I think a big thing for a lot of the growers here is that they’ve maintained their family ties to the business. If you get too big too fast, or you sell to someone else, you can really lose your way.”