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Wine Lovers Invest in Their Vines : Owners: Many of Willamette Valley Vineyards' 4,500 shareholders place fun over profit--but they get both.

September 20, 1993|From Associated Press

TURNER, Ore. — Jim Bernau's dream of running a winery came true with the help of about 1,200 partners--all of them fellow aficionados of the grape.

His Willamette Valley Vineyards is the nation's first consumer-owned winery.

Pride of ownership "boosts sales, and in turn increases profits," said Bernau, president and general manager of the 3-year-old venture, which has grown to 4,500 shareholders. "It's a self-fulfilling dream."

The unique ownership arrangement has given rise to some unusual corporate practices. The winery prints order forms on the back of its proxy ballots offering shareholders discounts on products, for example.

Shareholders donate a total of 6,000 to 7,000 hours of work each month. They run the tasting room, sell and deliver wine, help with bottling, and staff special events, such as the Sept. 25-26 Harvest Festival.

"People love the idea that they are a winery owner," said Bernau. "Over 300 of our shareholders suffered through an Oregon Liquor Control Commission class so they can pour wine. And they've done it at their own expense."

Bernau said his experience helping small businesses as an executive director of the National Federation of Independent Businesses gave him the know-how and the courage to launch "a new kind of company."

Bill Nelson, executive director of the Oregon Winegrowers Assn., said Willamette Valley's shareholders get involved less for investment purposes than for the fun. "I think it's more a romantic thing," he said.

The founding shareholders were recruited at wine tastings, through friends and newspaper ads, and invitations sent to wine shops.

"Being a wine enthusiast myself, I knew a lot of wine enthusiasts, and so many of these people are my friends," Bernau said.

Shareholder-volunteer Warren Orahood was easing into retirement in 1989 when he saw ads for the initial stock offering. Intrigued by the idea, Orahood and his wife drove to the winery to meet with Bernau and became quick converts.

The couple work every Friday in the wine-tasting room, where Warren explains the ins and outs of wine to tourists and chats about Oregon.

"I enjoy it immensely and so does she," he said.

Michelle Reeder, who works in the winery's office, says: "People really enjoy making it a regularly scheduled event each week . . . The involvement is tremendous."

About 1,200 original shareholders invested an average of $1,700 each to cover the winery's start-up costs in 1989. If the investors hadn't shown up, Bernau would have been stuck with $77,000 in debt just from the legal costs of the stock sale.

Two additional stock offerings have proved the romance of owning a winery was also a solid business investment.

Initially, the stock sold at $1.70 a share. Now it's selling between $5 and $6 a share. The stock trades privately by word of mouth, but Bernau said the company, which has $5 million in assets, will apply this fall to list on the Nasdaq exchange.

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