Here are two brief analogies to describe Willamette Valley Vineyards (WVVI):

• The Whole Foods for premium Willamette Valley wines.
• The Patagonia of Oregon wineries.

• Wine Production: Produces and sells a diverse portfolio of premium wines, specializing in Pinot Noir, Pinot Gris, and Chardonnay from the Willamette Valley.
• Wine Tasting Experiences: Offers guided and self-guided wine tastings, educational tours, and culinary pairings at its estate and other tasting room locations.
• Direct-to-Consumer Sales: Sells wine directly to consumers through its popular wine club, online store, and retail shops located at its various properties.

Willamette Valley Vineyards (symbol: WVVI) primarily sells its wines directly to individuals. According to its SEC filings (e.g., 2023 10-K), direct-to-consumer sales consistently represent the largest portion of its revenue, significantly outpacing wholesale and export channels.

The company serves the following three major categories of individual customers:

1. Winery Visitors/Tasting Room Patrons: These are individuals who visit Willamette Valley Vineyards' estates, tasting rooms, and other physical locations. They typically purchase wine on-site, enjoy guided tastings, and experience the winery's hospitality. This group includes tourists and local enthusiasts seeking an immersive wine experience.

2. Wine Club Members: A loyal segment of customers who subscribe to Willamette Valley Vineyards' wine club. These individuals receive regular, curated shipments of wine, often including exclusive or limited-release selections, and benefit from member perks such as discounts, special event access, and personalized service.

3. Online & Event Customers: This category includes individuals who purchase Willamette Valley Vineyards' wines through the company's e-commerce website, as well as those who buy wines at special events hosted or attended by the winery (e.g., festivals, private tastings, concerts). These customers seek convenience in purchasing or engage with the brand at specific promotional or social events.

Michael Osborn, Chief Executive Officer

Michael Osborn was appointed CEO of Willamette Valley Vineyards in May 2025, taking over from founder Jim Bernau. Osborn is a pioneering entrepreneur and respected leader in the American wine industry, best known as the founder of Wine.com in 1998, initially named eVineyard. He built Wine.com into the nation's leading online wine retailer over nearly three decades, revolutionizing how consumers discover and purchase wine. His career includes experience in the software industry, and he brings a wealth of knowledge in marketing, technology, and consumer engagement.

Jim Bernau, President and Chairperson of the Board of Directors

Jim Bernau founded Willamette Valley Vineyards in 1983 with the vision of creating world-class Pinot Noir. He established it as a sole proprietorship and co-founded the company in May 1988. Bernau served as CEO until May 2025, when he transitioned to his current roles of President and Chairperson of the Board. He pioneered a community ownership model, successfully conducting one of the earliest "crowdfunding" initiatives in the nation in 1988 to build the winery. Bernau has been instrumental in advocating for the Oregon wine industry, helping to pass legislation for wineries on farmland, direct wine shipments, and the establishment of the Oregon Wine Board. He also co-founded the Oregon Estate Vineyards division in 2015 to manage subsidiary vineyards.

John Ferry, Chief Financial Officer

John Ferry has served as the Chief Financial Officer of Willamette Valley Vineyards, Inc. since September 2019. Prior to joining Willamette Valley Vineyards, Mr. Ferry was the President of Contact Industries, a wood products based OEM supplier, from November 2014 until July 2019. He also previously served as the Chief Financial Officer of LifePort, Inc. from 2012 to 2014. Mr. Ferry has held senior financial leadership positions in various aerospace-related industries. He earned his Masters Business Administration degree from the University of Bath and his undergraduate degree from the University of Dundee.

Christine Collier Clair, Winery Director

Christine Collier Clair serves as the Winery Director at Willamette Valley Vineyards, Inc., where she leads winemaking and vineyard operations, as well as direct sales and marketing. Her connection to the winery began at a young age, selling friendship bracelets in the tasting room and later interning during college. In 2015, she co-founded Oregon Estate Vineyards, a new company division, with Jim Bernau. She also served as the Director of Troon Vineyard, where under her leadership, it was recognized as one of Wine Business Monthly's "Top 10 Hottest Small Brands." Clair is a graduate of Oregon State University and holds numerous wine certifications from the Wine & Spirits Educational Trust.

Terry Culton, Director of Winemaking & Vineyards

Terry Culton is the Director of Winemaking & Vineyards at Willamette Valley Vineyards, leading the winery and vineyard teams. His professional journey brought him back to Willamette Valley Vineyards, where he previously worked as Cellar Master in 1997. Culton has a 20-year career making acclaimed wines for several California wineries, including Calera, where he worked with Pinot Noir pioneer Josh Jensen, and Hoffman Mountain Ranch. His enthusiasm for winemaking led him to establish Culton Wines, producing Rhône varietals and blends. Before returning to Willamette, he worked at Le Vigne Winery in Paso Robles, California, where he achieved high recognition for his wines. Culton's approach to winemaking focuses on creating elegant, food-friendly wines that express their terroir.

Key Business Risks for Willamette Valley Vineyards (WVVI)

1. Debt and Financial Health: Willamette Valley Vineyards faces substantial debt pressures and a fragile capital structure, evidenced by rising interest expenses and significant debt obligations. In Q1 2025, the company reported a wider net loss, and its interest expenses increased by 29.8%. Total liabilities reached $1.88 billion as of Q1 2025, and its EBIT (earnings before interest and tax) only covers its interest expense by 0.15 times, indicating a heavy debt load.
2. Execution Challenges of Strategic Pivot and Market Headwinds: The company is undergoing a strategic shift towards direct-to-consumer sales, a pivot that carries considerable execution risks in a highly competitive wine market. Willamette Valley Vineyards experienced a 14.3% revenue decline in Q1 2025, with distributor sales collapsing, making the success of this strategic shift critical. The broader wine industry also faces challenges such as agricultural volatility, shifting consumer preferences, and market saturation.
3. Agricultural and Climate-Related Risks: As a winery, Willamette Valley Vineyards is susceptible to various agricultural risks. These include grapevine diseases like phylloxera, to which some of the company's older vines are not resistant. Additionally, the industry is increasingly affected by climate change, leading to unpredictable weather patterns such as unseasonably cool summers, wetter springs that can cause mildew and rot, and overall increased variability in conditions, which directly impacts grape quality and yield.

Clear emerging threats for Willamette Valley Vineyards (WVVI) include:

1. The rapid and sustained growth of alternative alcoholic beverage categories: This encompasses ready-to-drink (RTD) cocktails, premium hard seltzers, and innovative craft spirits. These categories are aggressively capturing market share, particularly among younger demographics who might otherwise be entering the traditional wine market. While not direct wine competitors, they vie for the same consumption occasions and discretionary spending, posing a significant threat by diverting new and existing consumers away from traditional wine products like those offered by WVVI.

2. Shifting consumer preferences towards moderation, reduced alcohol consumption, and the growing demand for low-alcohol or non-alcoholic alternatives: There is an observable trend, especially among younger generations, towards "mindful drinking" and healthier lifestyles that often involve cutting back on alcohol. If Willamette Valley Vineyards does not adapt by appealing to this evolving consumer mindset or by introducing relevant product lines, it risks a shrinking addressable market and decreased relevance over the long term.

Willamette Valley Vineyards' (WVVI) main products are various types of wine, primarily focusing on sustainably made Oregon wines, including Pinot Noir, Chardonnay, and sparkling wines. Given their national distribution, the addressable market can be considered the U.S. wine market.

The U.S. wine market was estimated at USD 75.3 billion in 2024 and is projected to reach USD 157.3 billion by 2033, growing at a Compound Annual Growth Rate (CAGR) of 8.8% from 2025 to 2033. Other estimates place the U.S. wine market at USD 79.8 billion in 2025, with a projection to reach USD 119.6 billion by 2034 at a CAGR of 4.59% from 2026-2034. Still wine dominates the U.S. market, holding over an 86.30% share in 2024, while the sparkling wine segment is expected to grow at the fastest CAGR of 9.9% from 2025 to 2033.

For additional context within their home region, the economic activity directly or indirectly related to Oregon's wine industry was estimated to be $8.169 billion in 2022. Oregon winery sales across all channels (wholesale, retail, direct-to-consumer, and export) generated approximately $956.4 million in revenue from over 5.7 million 9L cases sold in 2022.

• Expansion of Direct-to-Consumer (DTC) Sales Channels: Willamette Valley Vineyards aims to deepen relationships with wine enthusiasts by leveraging its shareholder base as "wine ambassadors" and wine club members. This strategy has historically allowed the company to grow its direct sales and expand its market footprint by attracting self-financing investment capital.
• Opening of New Retail Outlets and Innovative Tasting Room Experiences: The company is expanding its physical presence, including the development of new retail outlets. A notable example is the "prototype Willamette Wineworks," which features a unique consumer-operated wine blending system designed to engage customers and attract local interest.
• Improved National Distribution and Market Penetration: Recognizing recent challenges in national distribution through wholesalers, Willamette Valley Vineyards has appointed a new Chief Executive Officer, Mike Osborn, to specifically address these issues and enhance case sales to distributors. New distribution partnerships are also being pursued to strengthen market reach.
• Launch of Sustainable and Innovative Packaging Solutions: The introduction of reusable Revino glass bottles is a key initiative. This sustainable packaging approach is expected to reduce the company's carbon footprint and appeal to environmentally conscious consumers, offering a new, sustainable choice in its tasting rooms.

Share Issuance

• Willamette Valley Vineyards has continuously offered Preferred Stock to fund growth and make winery ownership accessible to wine enthusiasts.
• As of June 30, 2025, net proceeds of $3,558,807 have been received from these Preferred Stock offerings.
• The current Preferred Stock Offering, available in 2025, started at $3.35 per share with a 6.5% annual dividend or wine credit, with the share price increasing to $3.45 on August 1, 2025, and to $3.95 on November 1, 2025.

Capital Expenditures

• In the earlier part of the period, the company delayed some planned capital expenditures to preserve liquidity, which could impact business growth.
• Proceeds from Preferred Stock Offerings are intended to fund expansion projects, including the growth of its portfolio of vineyards, tasting rooms, restaurants, and production facilities.
• The company's production facilities are capable of producing up to 275,000 cases (654,000 gallons) of wine annually, with approximately 253,974 cases produced in 2024, indicating ongoing investment in maintaining and supporting this capacity.