What changed in this filing

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Item 1. Business

2023-03-28 compared with 2022-03-29 · 238 added, 270 removed, 334 unchanged (60% of the section changed)

Looking Statements

Annual Report on Form 10-K, including any information incorporated by reference, contains forward-looking statements within the

meaning of Section 27A of the Securities Act of 1933, as amended, referred to as the Securities Act, and Section 21E of

the Securities Exchange Act of 1934, as amended, referred to as the Exchange Act.

These forward-looking statements

involve risks and uncertainties that are based on current expectations, estimates and projections about the Companys business,

and beliefs and assumptions made by management.

Words such as expects, anticipates, intends,

plans, believes, seeks, estimates, predicts, potential,

should, or will or the negative thereof and variations of such words and similar expressions are intended to

identify such forward-looking statements.

Therefore, actual outcomes and results may differ materially from what is expressed or

forecasted in such forward-looking statements due to numerous factors, including, but not limited to:

availability of financing for

growth, availability of adequate supply of high quality grapes, successful performance of internal operations, impact of

competition, changes in wine broker or distributor relations or performance, impact of possible adverse weather conditions, impact

of reduction in grape quality or supply due to disease or smoke from forest fires, changes in consumer spending, the reduction in

consumer demand for premium wines, and the impact of the COVID-19 pandemic and the policies of United States federal, state and

local governments in response to such pandemic.

In addition, such statements could be affected by general industry and market

conditions and growth rates, and general domestic economic conditions.

Many of these risks as well as other risks that may have a

material adverse impact on our operations and business, are identified in Item 1A Risk Factors in this Annual Report on

We urge you to carefully review the disclosures we make concerning risks and other factors that may affect our business

and operations.

The forward-looking statements in this report are made as of the date hereof, and, except as otherwise required

by law, the Company disclaims any intention or obligation to update or revise any forward-looking statements or to update the

reasons why the actual results could differ materially from those projected in the forward-looking statements, whether as a result

of new information, future events or otherwise.

Annual Report on Form 10-K, including any information incorporated by reference, contains forward-looking statements within the meaning

of Section 27A of the Securities Act of 1933, as amended, referred to as the Securities Act, and Section 21E of the Securities

Exchange Act of 1934, as amended, referred to as the Exchange Act.

These forward-looking statements involve risks and uncertainties

that are based on current expectations, estimates and projections about the Companys business, and beliefs and assumptions made

by management.

Words such as expects, anticipates, intends, plans, believes,

seeks, estimates, predicts, potential, should, or will or the

negative thereof and variations of such words and similar expressions are intended to identify such forward-looking statements.

actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous

factors, including, but not limited to:

availability of financing for growth, availability of adequate supply of high quality grapes,

successful performance of internal operations, impact of competition, changes in wine broker or distributor relations or performance,

impact of possible adverse weather conditions, impact of reduction in grape quality or supply due to disease or smoke from forest fires,

changes in consumer spending.

In addition, such statements could be affected by general industry and market conditions and growth rates,

and general domestic economic conditions.

of these risks as well as other risks that may have a material adverse impact on our operations and business, are identified in Item

1A Risk Factors in this Annual Report on Form 10-K.

We urge you to carefully review the disclosures we make concerning risks

and other factors that may affect our business and operations.

The forward-looking statements in this report are made as of the date

hereof, and, except as otherwise required by law, the Company disclaims any intention or obligation to update or revise any forward-looking

statements or to update the reasons why the actual results could differ materially from those projected in the forward-looking statements,

whether as a result of new information, future events or otherwise.

– The Company was formed in May 1988 to produce and sell premium, super premium and ultra-premium varietals.

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The grapes are harvested, fermented and made into wine

primarily at the Companys winery in Turner, Oregon (the Estate Winery or Winery) and the wines are

sold principally under the Companys Willamette Valley Vineyards label, but also under the Griffin Creek, Tualatin Estate, Pambrun,

Maison Bleue, Natoma, Metis, Pere Ami and Elton labels.

The Company also owns the Tualatin Estate Vineyards and Winery, located near

Forest Grove, Oregon (the Tualatin Winery).

primarily at the Companys winery in Turner, Oregon (the Estate Winery or Winery) and the wines are sold

principally under the Companys Willamette Valley Vineyards label, but also under the Domaine Willamette, Griffin Creek, Tualatin

Estate, Pambrun, Maison Bleue, Natoma, Metis, Pere Ami and Elton labels.

The Company also owns the Tualatin Estate Vineyards and Winery,

located near Forest Grove, Oregon (the Tualatin Winery).

– The Company has identified two operating segments, direct sales and distributor sales, based upon their different distribution

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include all sales through a third party where prices are given at a wholesale rate.

– Under its Willamette Valley Vineyards label, the Company produces and sells the following

types of wine in 750 ml bottles:

– Under its Willamette Valley Vineyards label, the Company produces and sells the following types of wine in 750 ml bottles:

Pinot Noir, the brands flagship and its largest selling varietal in 2022, $24 to $100 per bottle;

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Gruner Veltliner, $28 per bottle;

Rose, $18 to $25 per bottle;

to $25 per bottle;

Brut, $50 to $65 per bottle;

Brut Rose, $65, and Riesling, $14 per bottle (all bottle prices included herein are the

suggested retail prices).

The Companys mission for this brand is to become the premier producer of Pinot Noir in the Pacific Northwest.

its Domaine Willamette label, the Company produces and sells the following types of wine in 750 ml bottles:

Brut, $75 per bottle;

Brut Rose, $75;

Blanc de Blancs, $85.

and Riesling, $14 per bottle (all bottle prices included herein are the suggested retail prices).

The Companys mission for this

brand is to become the premier producer of Pinot Noir in the Pacific Northwest.

This brands mission is to be the highest quality producer of Sparkling Wines in Oregon.

its Tualatin Estate Vineyards label, the Company currently produces and sells the following type of wine in 750 ml bottles:

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Grenache, $55 per bottle;

Franc, $50 per bottle;

Cabernet Franc, $55 per bottle;

Tempranillo, $55 per bottle;

Malbec, $55 per bottle;

The Griffin (a Bordeaux style blend), $65

The Griffin (a Bordeaux style blend), $65 per bottle;

and Viognier, $35 per bottle.

This brands mission is to be the highest quality producer of Bordeaux and Rhone

varietals in Southern Oregon.

This brands mission is to be the highest quality producer of Bordeaux and Rhone varietals in Southern Oregon.

its Elton label, the Company produces and sells the following types of wine in 750 ml bottles:

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per bottle and Lisette Rose, $30 per bottle.

its Made in Oregon Cellars label, the Company produces and sells the following type of wine in 750 ml bottles:

Oregon Blossom (off-dry

rosé), $14 per bottle.

Company holds U.S.

federal and/or Oregon state trademark registrations for the trademarks material to the business, including but not

limited to, the WILLAMETTE VALLEY VINEYARDS, DAEDALUS, OREGONS LANDMARK WINERY, TUALATIN, GRIFFIN CREEK, GRIFFIN, ELTON, WILLAMETTE,

WVV, SIP.SAVE, WHOLE CLUSTER, MADE IN OREGON CELLARS, OREGON BLOSSOM, INGRAM ESTATE, ITS WILLAMETTE, DAMMIT, FULLER, TUALATIN,

TUALATIN ESTATE, MAISON BLEUE WINERY, METIS, OBRIEN, WILLAMETTE WINEWORKS, COTE DU BLEUE, PERE AMI, KAYAK and NATOMA

Additionally, the Company has allowed use on PAMBRUN and PIERRE PAMBRUN and PINOT BLACK.

overview – The United States wine industry has seen a rapid increase in the number of wineries that are being established throughout

From 2009 to 2021, U.S.

wineries grew in number from 6,357 to 11,053, according to Statista.

and is one of the fastest growing

segments in agriculture.

wineries decreased production in 2020, the most recent year such data is available, by 9.7% compared to

2019 according to Statista.

The total retail value of wine sales has increased from $26.3 billion in 2000 to $66.8 billion in 2020 according

limited to, WILLAMETTE VALLEY VINEYARDS, DOMAINE WILLAMETTE, OREGONS LANDMARK WINERY, GRIFFIN CREEK, GRIFFIN, ELTON, WILLAMETTE,

SAVE, WHOLE CLUSTER, GIVE YOUR WHOLE HEART WITH WILLAMETTE WHOLE CLUSTER, OREGON BLOSSOM, NOG, OREGON NOG, INGRAM ESTATE, ITS

WILLAMETTE, DAMMIT, FULLER, TUALATIN, TUALATIN ESTATE, MAISON BLEUE WINERY, MÉTIS, OBRIEN, EAGLES CLUTCH, WILLAMETTE

WINEWORKS, JORY CLAIM, COTE DU BLEUE, PÈRE AMI, KAYAK, DAEDALUS and NATOMA marks.

Additionally, the Company has allowed use on

PAMBRUN and PIERRE PAMBRUN and PINOT BLACK.

overview – The United States wine industry has seen a rapid increase in wineries established nationwide.

The United States

wine industry added 400 new wineries in 2022, a 3% increase from 2021, according to Wine Analytics Report .

From 2009 to 2021,

wineries grew from 6,357 to 11,053, according to Statista, and consequently can be considered one of the fastest-growing segments

in agriculture.

The total retail value of wine sales has increased from $26.3 billion in 2000 to $78.4 billion in 2021, according to

According to the report, the U.S.

value of Direct to consumer wine shipments grew by 14.9 percent in 2020.

value of direct-to-consumer wine shipments grew by 13.4 percent during 2021.

Total wine consumption

in the United States has grown by 46 percent since 2005.

In 2020, one billion gallons of wine were consumed, up from 687 million in 2005.

Wine consumption has been increasing in the United States.

Since 2005, the average annual consumption per resident has increased by 33

percent to a high of 3.09 gallons in 2020.

to a Wine Analytics report at the end of 2021, the total U.S.

wine market was worth $78.3 billion, a 17% increase from the previous year,

which Wine Analytics believes were driven by the vaccinated and looser public health restrictions which gave consumers the confidence

and opportunities to return to on-premise venues.

in the United States has also grown 46 percent since 2005.

Additionally, 1.1 Billion gallons of wine were consumed in 2021, an increase

of 413 million from 2005 (Statista).

Wine consumption has been increasing in the United States, as since 2005, the average annual consumption

resident has increased by 33 percent to a high of 3.18 gallons in 2021.

to Statista revenue in the U.S.

wine market is worth $56.65 billion as of 2023, up 7.5% from the prior year, and is expected to grow

annually by 5.85% through 2027.

Wine Grand View Research in their report believes millennials and younger generations drive this increase

as wine consumption has become a sign of social status.

In addition, Wine Grand View Research believe innovations in flavors, color,

and packaging have also contributed to the growth.

to Wine Intelligence Ltd., the total wine-drinking population in the U.S.

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of 8 million people drinking wine at least once a year compared with 2015.

However, the number of consumers drinking wine at least once

a month declined by 11 million over that same time period.

Wine Intelligence reports this trend is driven by 21-34 year olds who

are moderating consumption and switching to other beverages yet Wine Intelligence found that Millennials who are remaining as regular

wine drinkers say they are more highly involved, adventurous and higher spending wine drinkers than more mature consumers.

According to the Wine Market Council, of U.S.

wine consumers in 2019, 56% were female and 44% male with 33% of consumers drinking wine

more than once a week.

Domestic wine accounted for 66.9%

sales in 2019 according to Wines & Vines Analytics Report.

The five most popular wines in 2019 were chardonnay, cabernet

sauvignon, red blends, pinot gris and pinot noir, according to Nielsen.

However, according to this same report the number of consumers

drinking wine at least once a month declined by 11 million over that same time.

Wine Intelligence reports in that this trend is driven

by 21-34 year olds who are moderating consumption and switching to other beverages.

Yet, Wine Intelligence found that Millennials

who remain regular wine drinkers, say they are more highly involved, adventurous and higher spending wine drinkers than more mature

consumers. According to the Wine Market Council of U.S.

wine consumers in 2022, 54% were female and 42% male, with 34% drinking

wine more than once a week.

Further, domestic wine accounted for 66.9% of U.S.

sales in 2019, according to a Wines & Vines Analytics.

Within the total wine market, the five most popular wines in 2022 were cabernet sauvignon, chardonnay, red blends, pinot gris, and pinot

noir, according to Nielsen.

2021, off-premise sales accounted for roughly 80% of the U.S.

market with an average bottle price of $10 according to Nielsen.

direct to consumer (DTC) sales continue to be a fast growing channel in the U.S.

market, increasing by 12% in 2018 from 2017 according

to Wines & Vines Analytics, DTC sales constituted only a small percentage of overall sales volume representing less than 2% of the

total sales volume in the United States in 2018.

a 2018 American Wine Consumer Preference Survey, by Sonoma State University and the Wine Business Institute, American wine consumers

from all 50 states were sampled regarding their wine consumption.

Of those sampled, 50% reported they consume wine daily or several times

per week making them High Frequency Wine Drinkers with 17% reporting that they drink wine once per week and the remaining

33% drinking wine less frequently.

Respondents demonstrated a preference for red wine, with 69% listing it as one of their favorites,

67% listing white wine as one of their favorites and 40% listing Rose.

Price and brand topped the list of decision-making reasons when

purchasing wine for home consumption at 80% and 69% respectively.

Of those surveyed 32% listed the most common purchase price being $11

to $15 however 46% indicated that they had paid $50 to $99 a bottle for a special occasion.

McMillan, EVP and founder of Silicon Valley Banks Wine Division, in his State of The Wine Industry Report 2020, explains that

the wine consumers who fueled the growth of super premium wines, Baby Boomers, are moving into retirement, declining in numbers and per

capita consumption.

While younger generations represent a substantial opportunity for wine producers, winemakers must make dramatic adjustments

in their strategies to reach and appeal to these younger consumer groups with different values or face declining sales and profits.

market, with an average bottle price of $12.05, according to Grand View

Research and Statista.

In addition, a Sovos ShipCompliant and Wines Vines Analytics report from 2022 shows direct-to-consumer wine shipments

remained consistent with 2021 at 12% of the total off-premise wine market in the U.S.

However, according to this report the average price

per bottle within these shipments increased by 9.7% in 2022 versus the prior year, up to $45.16.

Pinot Noir was the second most-shipped

varietal during the year.

summary, we believe the wine industry is on a solid trajectory and continues to grow.

Overall, we believe the industry is expected to

stabilize in 2023 at the current levels.

However, of concern, consumption growth is mainly amongst those over 60 years old, with

the most significant growth area among 70-80-year-olds.

Consequently, we believe future positive sales and growth will depend on the

industry targeting younger consumers.

According to the State of the Wine Industry 2023 by Rob McMillan, younger wine consumers are not

limited by cost;

instead, they seek something enticing to draw them in to learn more about wine, including but not limited to health,

sustainability, social values, and transparent labeling,

Companys Board of Directors and Management believe the winerys focus on integrity in winemaking, small scale, storied estate

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overall number of wineries increased from 995 to 1,058 with the biggest increases coming from the Willamette Valley, which added 45.

Planted acres of wine grape vineyards increased by 2,132 acres from 37,399 to 39,531, an increase of 5.7%, 33,320 acres of which were

Oregon wine grapes produced a 2020 crop with a total value of $158 million, a decrease of 33.6% from 2019 primarily due to

lower fruit set and wildfires preceding the 2020 harvest according to UOIPRE.

Pinot Noir leads all varieties accounting for 60% of planted

acreage and 49% of production.

According to UOIPRE, Oregon case sales in 2020 were 4.7 million, which was similar to 2019.

UOIPRE reported

case sales in dollars for 2020 were approximately $700 million, a 3.8% increase from 2019.

Planted acres of wine grape vineyards increased by 2,368 acres from 39,531 to 41,899, an increase of 6%, 39,083 acres of which

were harvested.

Oregon wine grapes produced a 2021 crop with a total value of $271 million, an increase of 72% from 2020 primarily due

to a more normal fruit set compared to the preceding 2020 harvest according to UOIPRE.

Pinot Noir leads all varieties accounting for

60% of planted acreage and 61% of production.

According to UOIPRE, Oregon case sales in 2021 were 5.3 million, which was a 13% increase

UOIPRE reported case sales in dollars for 2021 were approximately $844 million, a 21% increase from 2020.

of climate, soil and other growing conditions, we believe the Willamette Valley in western Oregon is ideally suited to growing superior

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industry will grow at a faster rate than the overall domestic wine industry, and that much of this growth will favor producers of premium,

super premium and ultra-premium wines such as the Companys Estate, Elton, Pambrun, Maison Bleue and Griffin Creek brands.

Oregon harvest – There is no official data available on the 2021 Oregon harvest as of the date of this report.

super premium and ultra-premium wines such as the Companys Estate, Elton, Domaine Willamette, Pambrun, Maison Bleue and Griffin

Creek brands.

Company, one of the largest wine producers in Oregon by volume, believes its success is dependent upon its ability to:

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and (5) continue to build on its base of direct to consumer sales.

The Companys goal is to continue to build on a

reputation for producing some of Oregons finest, most sought-after wines.

The Companys goal is to continue to build on a reputation

for producing some of Oregons finest, most sought-after wines.

upon several highly regarded surveys of the U.S.

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that supports high bottle prices for its high quality wines;

(iii) build brand recognition by emphasizing restaurant sales;

develop strong marketing advantages (such as a highly visible winery location, successful support of distribution, and life-long customer

service programs).

(iii) build brand recognition;

and (iv) develop strong marketing advantages

(such as a highly visible winery locations, successful support of distribution, and life-long customer service programs).

successfully execute this strategy, the Company has assembled a team of accomplished winemaking professionals and has constructed and

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Companys marketing and selling strategy is to sell its premium, super premium and ultra-premium cork-finished-wine through a combination

of direct sales at the Estate Winery, the McMinnville Tasting Room in McMinnville, Oregon, the Tualatin Estate Tasting Room in Forest

Grove, Oregon, the Maison Bleue Tasting Room in Walla Walla, Washington, the Tasting Room in Folsom, California and sales through independent

distributors and wine brokers who market the Companys wine in specific targeted areas.

Company believes the location of the Estate Winery next to Interstate 5, Oregons major north-south freeway, significantly increases

direct sales opportunities to consumers.

The Company believes this location provides high visibility for the Winery to passing motorists,

thus enhancing recognition of the Companys products in retail outlets and restaurants.

The Company also believe the remodeled

Hospitality Center, at the Estate Winery, has further increased the Companys direct sales and enhanced public recognition of its

remain competitive in the premium, super premium and ultra-premium market, the Company has embarked on a brand expansion project and

is in the process of developing a brand and future winery in the Walla Walla AVA under the names Pambrun, Maison Bleue and Metis.

future winery is expected to produce small vintages of Cabernet Sauvignon and other Bordeaux-varietals, under the Pambrun brand, and

Syrah and other Rhone-varietals, under the Maison Bleue brand, to compete in the ultra-premium wine market.

The Company has released

wines under the Pambrun label beginning with the 2015 vintage year and Maison Bleue label beginning with the 2016 vintage.

Additionally,

the Company has developed a single vineyard brand near Hopewell, Oregon adjacent to the current site of Elton Vineyards to produce wine

under the Elton label.

This brand produces primarily Pinot Noir and Chardonnay, also for sale in the ultra-premium space.

has released wines under the Elton label beginning with the 2015 vintage year.

In January 2017, the Company purchased 17 acres,

with 15 acres of Pinot Noir planted, south of Dundee, Oregon and alongside Highway 99W.

The Company added 3 acres to that property through

a lot line adjustment.

The Company is in the process of constructing a new sparkling wine facility and tasting room, called Domaine

Willamette, at the Bernau Estate Vineyard that will feature the Companys sparkling wines, as well as its other reserve wines,

and its biodynamic farming practices.

December 2016 the Company purchased approximately 40 acres in the Dundee, Oregon area for estate vineyard and winery expansion.

the Company opened a microwinery featuring wine tasting and a custom blending experience under the name Willamette Wineworks, in

historic Folsom, California, and began selling wine under the brand name Natoma.

of direct sales at the Companys wineries, tasting room and restaurant locations in Oregon, Washington and California and sales

through independent distributors and wine brokers who market the Companys wine in specific targeted areas.

remain competitive in the premium, super premium and ultra-premium market, the Company has embarked on a brand expansion project including

developing a brand and winery in the Walla Walla AVA under the names Pambrun, Maison Bleue and Metis.

This future winery is expected

to produce small vintages of Cabernet Sauvignon and other Bordeaux-varietals, under the Pambrun brand, and Syrah and other Rhone-varietals,

under the Maison Bleue brand, to compete in the ultra-premium wine market.

The Company has released wines under the Pambrun label beginning

with the 2015 vintage year and Maison Bleue label beginning with the 2016 vintage.

Additionally, the Company has developed a single vineyard

brand near Hopewell, Oregon adjacent to the current site of Elton Vineyards to produce wine under the Elton label.

This brand produces

primarily Pinot Noir and Chardonnay, also for sale in the ultra-premium space.

The Company has released wines under the Elton label beginning

with the 2015 vintage year.

In 2020, the Company opened a microwinery featuring wine tasting and a custom blending experience under the

name Willamette Wineworks, in historic Folsom, California, and began selling wine under the brand name Natoma.

In 2022, the Company has

opened a sparkling wine facility and tasting room called Domaine Willamette, at Bernau Estate that features the Companys sparkling

wines, as well as its other reserve wines, and its biodynamic farming practices.

Company owns and leases approximately 1,018 acres of land, of which 801 acres are currently planted as vineyards or is suitable for future

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Pre-Production

Non-Plantable

Owned Vineyards

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is suitable for growing ultra-premium Pinot Noir.

Bleue Vineyard – The Company purchased approximately 37 acres in the new Rocks District of Milton-Freewater appellation

near Milton-Freewater, Oregon in 2016.

Bleue Vineyard – The Company purchased approximately 37 acres in the new Rocks District of Milton-Freewater appellation near

Milton-Freewater, Oregon in 2016.

Grapes from this vineyard go to the Maison Bleue label.

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where winemakers believe the variety adapted to the warmer climate over the many years it was grown there.

new French clones are called Dijon clones after the University of Dijon in Burgundy, which assisted in their selection

and shipment to a U.S.

new French clones are called Dijon clones after the University of Dijon in Burgundy, which assisted in their selection and

shipment to a U.S.

government authorized quarantine site, and then two years later to Oregon winegrowers.

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and 777 clones have been grafted onto seven acres of self-rooted, non-phylloxera-resistant vines at the Companys Estate Vineyard.

clones of Chardonnay preceded Pinot Noir into Oregon and were planted at the Companys Estate Vineyard on phylloxera-resistant

2021, crop yields were below the 7-year average but higher than in 2020 and the Companys producing acres in the Estate Vineyard

and Tualatin Estate yielded approximately 242 tons and 184 tons of grapes, respectively.

Leased vineyards produced an aggregate of 816

tons of grapes in 2021.

Our Ingram Estate produced 172 tons of grapes in 2021.

Bernau Estate produced 35 tons of grapes in 2020.

Vineyard produced 28 tons of grapes in 2021.

Loeza Vineyard produced 43 tons of grapes in 2021.

Maison Bleue Vineyard produced 30 tons

of grapes in 2021.

2022, crop yields were above the 7-year average and the Companys producing acres in the Estate Vineyard and Tualatin Estate yielded

approximately 206 tons and 279 tons of grapes, respectively.

Company fulfills its remaining grape needs by purchasing grapes from other nearby vineyards at competitive prices.

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plant more acres and purchase properties for future vineyards.

believes that the grapes grown on the Companys vineyards establish a foundation of quality through the Companys farming

practices, upon which the quality of the Companys wines is built.

Wine produced from grapes grown in the Companys own vineyards

may be labeled as Estate Bottled wines.

believes that the grapes grown on the Companys vineyards establish a foundation of quality through the Companys farming practices,

upon which the quality of the Companys wines is built.

Wine produced from grapes grown in the Companys own vineyards may

be labeled as Estate Bottled wines.

These wines traditionally sell at a premium over non-estate bottled wines.

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in the United States for growing certain varieties of high-quality wine grapes.

The Estate Vineyards grape growing conditions

compare favorably to those found in some of the famous Viticultural regions of France.

The Estate Vineyards grape growing conditions compare

favorably to those found in some of the famous Viticultural regions of France.

Western Oregons latitude (42 o –46 o

North) and relationship to the eastern edge of a major ocean is very similar to certain centuries-old wine grape growing regions

Estate Vineyards soil type is Jory/Nekia, a dark, reddish-brown, silky clay loam over basalt bedrock, noted for being well drained,

acidic, of adequate depth, retentive of appropriate levels of moisture and particularly suited to growing high quality wine grapes.

Estate Vineyards elevation ranges from 533 feet to 800 feet above sea level with slopes from 2% to 30% (predominately 12-20%).

The Estate Vineyards slope is oriented to the south, southwest and west.

Average annual precipitation at the Estate Vineyard is

average annual air temperature is 52 to 54 degrees Fahrenheit, and the length of each years frost-free season averages

from 190 to 210 days.

These conditions compare favorably with conditions found throughout the Willamette Valley viticultural region and

other domestic and foreign viticultural regions, which produce high quality wine grapes.

the Willamette Valley, permanent vineyard irrigation generally is not required.

The average annual rainfall provides sufficient moisture

to avoid the need to irrigate the Estate Vineyard.

However, if the need should arise, the Companys Estate property contains one

water well which can sustain sufficient volume to meet the needs of the Winery and to provide auxiliary water to the Estate Vineyard

for new plantings and unusual drought conditions.

At the Tualatin Vineyard, the Company has water rights to a year-round spring that

feeds an irrigation pond.

The Company has water rights at the Pambrun Vineyard and Maison Bleue Vineyards and has no water rights at

Dayton Vineyard, Lafayette Vineyard and Jory Claim Vineyard.

to avoid the need to irrigate.

However, if the need should arise, the Companys Estate property contains one water well which can

sustain sufficient volume to meet the needs of the Winery and to provide auxiliary water to the WVV Estate Vineyard for new plantings

and unusual drought conditions.

At the Tualatin Vineyard, the Company has water rights to a year-round spring that feeds an irrigation

The Company also has water rights at the Pambrun Vineyard and Maison Bleue Vineyards.

Susceptibility

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to meet any anticipated future production needs.

facility – The Company has a renovated tasting and hospitality facility of 35,642 square feet (the Hospitality

Center) at the Estate Winery.

The main floor of the Hospitality Center includes retail sales space with the Estate Tasting Room,

dining area and mezzanine, which altogether are designed to accommodate approximately 300 persons for tastings, wine and food pairing

meals, public and private events and meetings.

An iconic observation tower and tiered decks around the Hospitality Center enable visitors

to enjoy the view of the Willamette Valley and the Companys Estate Vineyard.

The tiered decks funnel into an outdoor courtyard

that hosts many seasonal gatherings.

To the south side of the tiered decks the Company has two hospitality suites for overnight accommodations.

The Hospitality Center sits above the underground barrel cellar and tunnel that connects with the Winery.

The facility includes a basement

cellar, tunnel and barrel room of 11,090 square feet to store up to 1,800 barrels of wine for aging in the proper environment.

outside the Hospitality Center, the Company has a landscaped park setting consisting of terraced lawns for outdoor events.

The area between

the Winery and Hospitality Center form a 20,000 square foot quadrangle.

As designed, a removable fabric top can cover the quadrangle,

making it an all-weather outdoor facility to promote the sale of the Companys wines through festivals and social events.

the Companys working Winery is the Pinot Room and Founders Room, which can accommodate 40 persons and 111 persons, respectively,

for public and private events.

Company believes the Hospitality Center and surrounding areas make the Winery an attractive recreational and social destination for tourists

and residents, thereby enhancing the Companys ability to sell its wines.

The Company also stores and ages product at the Domaine Willamette Winery location in

Dundee, Oregon.

on properties – The Companys winery facilities at the Estate Winery are subject to two mortgages with an aggregate principal

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attention and dedication of the winemaking staff.

The Companys Winery is equipped with current technical innovations and uses

modern laboratory equipment and computers to monitor the progress of each wine through all stages of the winemaking process.

The Companys Winery is equipped with current technical innovations and uses modern

laboratory equipment and computers to monitor the progress of each wine through all stages of the winemaking process.

Companys recent annual grape harvest and wine production is as follows:

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and Distribution

strategy – The Company markets and sells its wines through a combination of direct sales at the Winery, directly through mailing

lists, and through distributors and wine brokers.

As the Company has increased production volumes and achieved greater brand recognition,

sales to out of state markets have increased, both in terms of absolute dollars and as a percentage of total Company sales.

strategy – The Company markets and sells its wines through a combination of direct sales at the retail locations, directly

through mailing lists, and through distributors and wine brokers.

As the Company has increased production volumes and achieved greater

brand recognition, sales to out of state markets have increased, both in terms of absolute dollars and as a percentage of total Company

Company uses a variety of marketing channels to generate interest in its wines.

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wines to competitions and state, regional and national media for editorials and ratings.

sales – The Companys Estate Winery is located on a visible hill adjacent to Oregons major north-south freeway

(Interstate 5), approximately 2 miles south of the states second-largest metropolitan area (Salem), and 50 miles in either direction

from the states first and third-largest metropolitan areas (Portland and Eugene).

We believe the unique location along Interstate

5 has resulted in generally greater amount of wines sold at the Estate Winery as compared to the Oregon industry standard.

from the Winery are a vital sales channel and an effective means of product promotion.

The Estate Winery Tasting Room is open daily and

offers wine tasting and education by trained personnel.

The Company offers by-appointment private tours offering a behind-the-scenes

look at the production process of the wines.

sales – The Estate Winery is located on a visible hill adjacent to Oregons major north-south freeway (Interstate 5),

approximately 2 miles south of the states second-largest metropolitan area (Salem), and 50 miles in either direction from the states

first and third-largest metropolitan areas (Portland and Eugene).

We believe the unique location along Interstate 5 has resulted in a greater amount of wines sold at the Estate Winery as compared to the Oregon industry standard.

Direct sales from the Winery

are a vital sales channel and an effective means of product promotion.

The Estate Winerys Tasting Room is open daily and offers

wine tasting and education by trained personnel.

The Company offers by-appointment private tours offering a behind-the-scenes look at

the production process of the wines.

The Company has one of the largest wine club memberships in Oregon.

September 2022, the Company opened a new sparkling winery, Domaine Willamette, located adjacent to Highway 99 in Dundee, Oregon (the

Domaine Willamette Winery, approximately 30 miles southwest of the states largest metropolitan area (Portland) and 25 miles

northwest of the states second-largest metropolitan area (Salem).

We believe the location of the Domaine Willamette Winery along

Highway 99 in Dundee provides an ideal location for direct wine sales and wine tourism.

Domaine Willamette Winerys Tasting Room

is open daily for wine tasting, restaurant service and education by trained personnel.

It features méthode traditionelle sparkling

wines and a wine club.

The Company offers by-appointment private tours giving a behind-the-scenes look at sparkling wine production.

Domaine Willamette Winerys biodynamic garden is another attraction for visitors.

2014, the Company launched daily food pairings to accompany its wines.

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community-style wine dinners hosted regularly throughout each month.

In 2019, the Company added a new experience offered throughout

the week called Pairings Exploration that features four wines paired with four small bites to educate guests on food and wine pairing.

In December 2021, the Company debuted a new Pinot Noir Clonal Blending experience giving guests the ability to be a winemaker for a day

be crafting their own custom blends from barrel.

In 2019, the Company added a new experience offered throughout the

week called Pairings Exploration that features four wines paired with four small bites to educate guests on food and wine pairing.

December 2021, the Company debuted a Pinot Noir Clonal Blending experience giving guests the ability to be a winemaker for a day by crafting

their own custom blends from barrel.

Winery has developed a Winery Ambassador program, which connects its Ambassadors with customers throughout the United States

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The Company sells its wine through its own e-commerce

website and direct ships were permissible.

Company also operates four additional tasting rooms;

one in historic downtown McMinnville, in the heart of Oregon Wine Country, one at

its Tualatin Vineyard (located 30 minutes west of Portland) one in downtown Walla Walla, Washington, and one in Folsom, California.

Company usually holds six major festivals at the Winery each year.

In addition, open houses are held at the Winery during major holiday

weekends such as Memorial Day and Thanksgiving.

Numerous private events, charitable and political events are also held at the Winery.

website and direct ships where permissible.

Company also operates seven additional tasting rooms at the following locations:

(i) historic downtown McMinnville, Oregon;

Tualatin Vineyard, Oregon;

(iii) Lake Oswego, Oregon;

(iv) Happy Valley, Oregon;

(v) downtown Walla Walla, Washington;

(vi) Vancouver,

Washington and (vii) Folsom, California.

Company holds various festivals and events at its locations throughout the year.

Numerous private events, charitable and political events

are also held at Company locations.

sales produce a higher profit margin because the Company can sell its wine directly to consumers at retail prices rather than to distributors

at free-on-board or FOB prices.

Sales made directly to consumers at retail prices result in an increased profit margin

equal to the difference between retail prices and distributor prices.

For 2021 and 2020, direct sales contributed approximately 41.8%

and 38.6% of the Companys net sales, respectively.

and wine brokers – The Company uses both independent distributors and wine brokers primarily to market the Companys

wines in specific targeted areas.

Only those distributors and wine brokers who have demonstrated knowledge of and a proven ability to

market premium, super premium, and ultra-premium wines are utilized.

The Companys products are distributed in 49 states and the

District of Columbia, and there are 3 non-domestic (export) customers.

For 2021 and 2020, sales to distributors and wine brokers contributed

approximately 58.2% and 61.4% of the Companys revenue from operations, respectively.

Sales made directly to consumers at retail prices result in an increased profit margin equal

to the difference between retail prices and distributor prices.

For 2022 and 2021, direct sales contributed approximately 46.4% and 41.8%

of the Companys net sales, respectively.

and wine brokers – The Company uses both independent distributors and wine brokers primarily to market the Companys wines

in specific targeted areas.

Only those distributors and wine brokers who have demonstrated knowledge of and a proven ability to market

premium, super premium, and ultra-premium wines are utilized.

The Companys products are distributed in 49 states and the District

of Columbia, and there are 3 non-domestic (export) customers.

For 2022 and 2021, sales to distributors and wine brokers contributed approximately

53.6% and 58.2% of the Companys revenue from operations, respectively.

– Oregon wineries are a popular tourist destination with many bed & breakfasts, motels and fine dining restaurants available.

The Willamette Valley, Oregons leading wine region has approximately 68% of the states wineries and vineyards, is home

to approximately 736 wineries and was selected by Wine Enthusiast Magazine as its 2016 Wine Region of the Year.

The Willamette Valley, Oregons leading wine region has approximately 74% of the states wineries and vineyards, is home to

approximately 781 wineries and was selected by Wine Enthusiast Magazine as its 2016 Wine Region of the Year.

An additional advantage

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From Portland, tourists can visit the Willamette Valley winery of their choice in anywhere from a 45 minute to a two-hour drive.

Company believes its convenient location, adjacent to Interstate 5, enables the Winery to attract a significant number of visitors.

Winery is approximately a 45-minute drive from Portland and less than one mile from The Enchanted Forest, an amusement park which operates

from April through September each year.

Company believes the location of the Estate Winery next to Interstate 5, and Domaine Willamette Winery next to Highway 99W, significantly

increases direct sales opportunities to consumers.

The Company believes these locations provide high visibility for the Company to passing

motorists, thus enhancing recognition of the Companys products in retail outlets and restaurants.

These wineries are also each

approximately a 45-minute drive from Portland.

on Major Customers

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these factors.

The Company has primarily received Excellent to Recommended reviews in tastings of its wines

and believes its prices are competitive with other Oregon wineries.

Larger scale production is necessary to satisfy retailers

and restaurants demand and the Company believes that additional production capacity will be needed to meet estimated future demand.

Furthermore, the Company believes that its estimated aggregate production capacity of 681,000 gallons (286,620 cases) per year at its

Estate Vineyards and Tualatin Vineyard locations give it significant competitive advantages over most Oregon wineries in areas such as

marketing, distribution arrangements, grape purchasing, and access to financing.

The current production level of most Oregon wineries

is generally much smaller than the estimated production capacity level of the Companys Wineries.

With respect to label recognition,

the Company believes that its unique structure as a publicly owned company will give it a significant advantage in gaining market share

in Oregon, as well as penetrating other wine markets.

The Company has primarily received Excellent to Recommended reviews in tastings of its wines and

believes its prices are competitive with other Oregon wineries.

Larger scale production is necessary to satisfy retailers and restaurants

demand and the Company believes that additional production capacity will be needed to meet estimated future demand.

Furthermore, the

Company believes that its estimated aggregate production capacity of 720,000 gallons (303,000 cases) per year at its Estate and Tualatin

locations give it significant competitive advantages over most Oregon wineries in areas such as marketing, distribution arrangements,

grape purchasing, and access to financing.

The current production level of most Oregon wineries is generally much smaller than the estimated

production capacity level of the Companys Wineries.

With respect to label recognition, the Company believes that its unique structure

as a publicly owned company will give it a significant advantage in gaining market share in Oregon, as well as penetrating other wine

Regulation of the Wine Industry

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Sale of the Companys wine is subject to federal alcohol tax, payable at the time wine is removed from the bonded area

of the Winery for shipment to customers or for sale in its tasting room.

of a winery for shipment to customers or for sale in its tasting room.

December 2017, the federal government passed comprehensive tax legislation which included the Craft Beverage Modernization and Tax Reform

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alternative processes or costs.

of December 31, 2021 the Company had approximately 177 full-time employees and 89 part-time, on call or seasonal employees.

the Company hires additional employees for seasonal work as required.

of December 31, 2022, the Company had approximately 169 full-time employees and 193 part-time, or on call employees.

In addition, the

Company hires additional employees for seasonal work as required.

The Companys employees are not represented by any collective

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may learn more about the Company by visiting the Companys website at www.wvv.com .

of the reports we file with the SEC are available from this website.

All websites referred to herein are inactive textual references

only, meaning that the information contained in such websites is not incorporated by reference herein.

All of the reports we file with the SEC

are available from this website.

All websites referred to herein are inactive textual references only, meaning that the information contained

in such websites is not incorporated by reference herein.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business