Thursday, June 22, 2017
Four years ago, when Morgen McLaughlin left her role as head of the Finger Lakes vintners group in New York to become executive director of the Santa Barbara County Vintners Association, she found an organization in need of fresh-thinking and modernization. So she expanded outreach both regionally and internationally, spruced up the two annual festivals, grew the operating budget by about 20 percent, and commissioned an economic impact study to show that the wine industry contributes $1.7 billion to the county economy, employing 5,700 people directly and attracting nearly 900,000 annual tourists.
But McLaughlin, who also became a planning commissioner in the City of Buellton, quickly found herself playing more defense than offense, fighting against county planners and some in the community who wanted to increase regulations on the industry through an updated winery ordinance. McLaughlin spearheaded an impressive grassroots campaign against the ordinance, which, despite being in the works for five years, was shot down by the Board of Supervisors due largely to well organized wine country opposition.
Everyone was stunned by that victory, and many were also stunned last week when McLaughlin announced she was leaving her post on July 21 for a similar role in charge of Oregon’s Willamette Valley vintners association, which has almost twice as many members as Santa Barbara’s, a much bigger budget, and a full staff.
“I’m looking forward to 142 days of rain,” said McLaughlin with a laugh on Monday morning, when she spoke to me about why she’s leaving and what challenges remain for Santa Barbara wine country in the years to come.
Did you expect to leave after four years? Some of the timing for this was pushed forward because my youngest son is starting high school, so it was either this summer or another four years. This was just a good opportunity. It was maybe earlier than we anticipated, but my son loves to mountain bike and ski, so…
How did you find out about the job? Someone had told me that the position was available. The previous director had been there 20 years and was retiring. We had been to Oregon last year for the first time and just liked the culture and what was happening up there.
Tell me about the Willamette Valley Wineries Association. It’s twice as big as Santa Barbara County. They have 500 wineries total and 230 are members. We have 200 here and 130 members. So with the percentages, there’s more opportunity. You can do that math. What’s interesting is that both regions have the same number of planted acreage. So they have a lot more small producers who are looking to increase their DTC [direct-to-consumer sales] as well as bring more tourism to the area.
Are Santa Barbara’s challenges similar? Yes. We are trying to build the DTC side of the business and the tourism side. But we’re being hampered extensively with the land use regulations. That’s one of the main reasons why I’m leaving.
If you look at the pipeline, in terms of who’s the new Third District planning commissioner [Cerene St. John, a vocal opponent of winery development in Ballard Canyon], and you see what happened with short-term rentals, it’s going to be a very challenging environment for new winery projects and tourism growth.
You can’t market a region if you can’t do anything, if you don’t have new projects coming online, if you’re restricted on food, if you are limited on the number of events. It puts us at a very competitive disadvantage.
Were you surprised to learn that land use was so strict when you came four years ago? I had no idea.
Do you appreciate that there is some value to these regulations? I think there’s always a need for balance, but I don’t think that we are in a place of balance here. Where there is balance are in places like the Santa Maria Valley, which is very pro-ag and pro-tourism. That unfortunately gets handicapped by other parts of the county. So there should be some input and sensitivity to regional impacts, but I think in this area were we are now, it’s become too much, too restrictive.
Who are our primary competitors? In terms of destinations, obviously Paso Robles, and Sonoma, Napa, and Temecula, which has a very close proximity to our target market. Then there are also emerging wine regions like Valle de Guadalupe in Mexico. That is starting to pull a lot of our target market. You look at those and what they are offering in terms of a wine experience — it’s not forcing people to go taste wine in tasting rooms.
That’s what we have here: the majority of our wine experience is within a tasting room-only model. That’s a tough thing to compete with, when other regions have onsite restaurants and sprawling vineyards and estates to visit.
How could the county be more winery-friendly? My opinion is that there needs to be a more concerted effort to think about where new winery projects are going to be located. What the Board of Supervisors have created is a situation like Los Olivos, where you have this concentrated number of tasting rooms that create neighborhood impacts that become an anti-wine movement.
That’s instead of thinking, “Wow, there are probably 10 tasting rooms that could have and would have preferred to have their wine experience at their estate.” That’s what visitors want, that’s what producers want — to be able to go where the wine is grown.
I don’t understand why Santa Barbara County has this separation between consumers and visitors and farming. It’s not just wine. Why can’t all of the olive oil producers and other ag businesses thrive here? It doesn’t seem to make sense.
What are some internal challenges with our wine industry?
As an association and as a region, we are challenged to compete against other wine regions with overall marketing dollars, whether that money comes from events or from membership. We spend a lot of time trying to replace the revenue that used to get generated from the two annual festivals. But the days of generating $100,000 per festival net revenue are long gone.
Is that because the festival format is tired? That’s part of it. It’s also very competitive in the space. When the association started the Vintners Festival and Celebration of Harvest, there were some of the first wine festivals in the country. Now, on any given weekend, there are multiple festivals.
How have you tried to replace that revenue? We did raise the dues. We offered a lot more marketing programs that wineries paid additional fees to participate in. And we have been working on a new fundraising event that will be forthcoming under the new director. But I can’t give any more details on that.
Do you feel like you’re leaving the association in a stronger place? Well, we certainly have created a lot more opportunities for our members, and we definitely traveled both nationally and internationally promoting Santa Barbara County wines. But it’s a job that never ends.
There’s not just competition with the regions I mentioned, but look at what the international unions spend on wine marketing and promotions. Then you have regions like South Africa and Australia, where their annual budgets are in the millions.
It’s just becoming much more competitive, so domestic regions really need to understand the competition and decide where their regions want to be. Is it a region that wants to have a local focus, or is it a region that wants to be on the international stage? To be on the international stage requires significant financial investments and commitments.
What would you advise: local focus or international stage? You have to do both. That’s why this position and the association does so many different things. We work with the tourism offices, and try to get some cooperation on programming. We work with the California Wine Institute on international events. We try to educate our elected officials about the importance of the wine industry. We try to educate our members about the industry to make sure they’re staying competitive in the marketplace and staying abreast of changing regulations.
Do you think that the Santa Barbara wine industry has gotten their message out about financial impacts loud enough? That’s always an ongoing objective, even to acknowledge that it has an economic impact. For some people, it doesn’t matter. It doesn’t matter that wine generates X number of dollars. It doesn’t matter that tourism is bringing X number of people in. Some people don’t want change and don’t want growth. We’re seeing that in other parts of California and even places like Long Island. So it’s not really unique to Santa Barbara, but it is more extreme here.
Will Santa Barbara wine country be able to survive? I would hope so and think so. Santa Barbara County is well positioned, which is why I was excited to come here four years ago. You’ve got 10 million people living within two-and-a-half hours. You’ve got beauty all around. You’ve got recognition: People know Santa Barbara everywhere you go in the world, and it’s always a positive association.
But I remember talking to you almost four years ago to the day about the challenges of a diversity message. [Unlike Napa, Bordeaux, Tuscany, and other renowned regions where the focus is on a couple grape varieties or a particular style, Santa Barbara does a lot of different grapes well.] I do see there is a bubbling interest in consumers wanting to try different things, so I think the spotlight is going to return to Santa Barbara again. It’s just gonna take a little bit more time.
Any idea on who might replace you? The board is working on a job description and what the transition looks like for a replacement. I had a lot of people reach out to me individually, so I know the interest is going to be high.
From both near and far? From all around. I’ve actually been quite surprised.
What strategy would you suggest for your successor? That’s what I have given the board as homework: to really do some soul-searching of what the focus needs to be over the next five years. Because what I recommend is not necessarily what the rest of the board thinks.
But I would say that you’ve gotta have tough skin. You’re not gonna be able to please everybody. You always have to keep the region’s best interests first. It’s not about individuals, but it’s about the collection of stories coming together.
Did you feel supported by wine industry during your tenure? Yea. Again, the challenge comes back to when you have a message that’s about diversity, you’re always gonna have different opinions. So it’s telling everyone’s story, whether people like it or not.
What are some big hurdles for the industry in the future? There’s going to be a lot of bigger things that affect everyone in the industry, from labor to water to competition from other crops, like marijuana.
Did the board know you were leaving in advance? No, it was a surprise. You can never make everyone happy, so I’m sure that there are people who are cheering and are happy that I’m leaving. I have enjoyed my time here and accomplished a lot. Just the timing personally worked well. It’s just a long, slow fight here, so I’ve become a little tired.
What other advice do you have for the future? This industry and this position, whether it’s in Santa Barbara or anywhere, it’s a tough job. And I think what regions have to understand is that one association and one director doesn’t change or create the culture. The culture and the vision has to come from within. That’s what makes regions great.