McMINNVILLE, Ore. -- An afternoon drive through Yamhill County's wine country was all it took to convince Jeff Meader that he needed to dramatically expand what, even then, was the state's largest wine storage and shipping company.

KING

"New vineyards were being planted everywhere," Meader recalled of that outing two years ago. "It was very clear that unless we increased our space, wineries wouldn't have room to store their wine."

That forecast was on the money: The rapid growth in the number of commercial wineries, from about 200 five years ago to more than 350 today, along with thousands of acres of newly planted vines in that time, have greatly boosted demand for Oregon Wine Services & Storage's temperature-controlled space.

To meet that need, Meader -- who co-owns the company with John Niemeyer and serves as its general manager -- embarked on a $3.5 million expansion to add 60,000 square feet of storage space to the firm's 110,000 square feet in McMinnville. The addition's pre-poured concrete walls recently started going up and the facility will be available in plenty of time for this fall's harvest.

Meader's decision to expand seems timely, despite the softening of the nation's economy as a whole. In a "state of the wine industry" report released by Silicon Valley Bank, wine division founder Rob McMillan predicted the next 12 months will be good ones for wineries.

The fine-wine segment -- which includes higher-end Oregon pinot noir -- grew by nearly 20 percent last year, according to the report, a figure topping every other price point.

Oregon Wine Services & Storage's combined 170,000 square feet, in a building that once flash-froze Pillsbury pies by the score, will make it the second-largest wine storage and shipping operation in the Northwest, behind Tiger Mountain Services in Kent, Wash.

The thousands of bottles from the 130 wineries the Oregon firm counts as clients make a tour of the warehouse tantamount to a walk through the best wine list in the world.

Wine storage alone, however, now occupies only the bottom rung on the company's task ladder.

Profits at Oregon Wine Services & Storage are made up of value-added services driven by an ever-growing demand for Oregon wines, the soaring popularity of wine clubs and legal changes allowing more and more consumers to order directly from their favorite winery

Although some states still bar outside shipments of wine, recent legal changes mean that 80 percent of the country's adult population can now receive direct shipments of Oregon wines, said Ted Farthing, executive director of the Oregon Wine Board.

"Direct sales are the profit lifeline for the small Oregon winery," he said. "Often, it's the only way millions of wine-lovers can get Oregon wines on their dinner tables."

By using its own newly purchased fleet of temperature-controlled trucks -- or independent delivery services -- OWS can now move a bottle of wine anywhere in the country in two days. Any one of the wineries storing wine at OWS has only to fire off a fax or e-mail stating an order's size and destination. Staffers pull the corresponding bottles from inventory, package it for shipping and load it onto a truck that day.

The company also is adding decidedly green-tinged features to its operations.

A 200-kilowatt solar panel system, which Meader said will be the largest in Yamhill County, will soon be installed on the warehouse's roof. A high efficiency motion-sensor lighting scheme, which shuts itself off anytime someone isn't in a particular room for more than a few minutes, is also in the works. In addition, a night-air cooling system, relying on natural rather than automated cooling, will keep storage area temperatures down.

Even Oregon's most successful wineries, such as Domaine Drouhin in Dayton, say that operations such as Oregon Wine Services & Storage are crucial to the industry. Services ranging from safely storing valuable wine to helping vintners wade through extremely complex legal-compliance issues are indispensable, they say.

"Our industry has grown tremendously in both size and sophistication," said David Millman, Domaine Drouhin's general manager. "OWS is a direct reflection of that growth."

The company isn't without competition.

Northwest Distribution & Storage in Salem, for instance, has been in business for 15 years and counts 70 Oregon wineries as clients. Our Lady of Guadalupe Trappist Abbey, five miles north of Lafayette, has operated a full-service wine warehouse since 1990.

"Our goal is to be the premier warehouse transportation facility in the United States," said Gary Parker, who runs Northwest Distribution with his father, Lloyd. "We move 3.5 million cases a year. That's a lot of wine moving through our system."

Combined, the three storage and shipping operations cater to an overwhelming majority of Oregon's $1.4 billion wine industry.

In years past, Oregon wines headed for the East Coast had to be shipped to Northern California, where they were consolidated with California wines to make a full truckload. Now, for the first time, Oregon is selling enough wine that full loads are just beginning to be put together and shipped from Yamhill County, Oregon Wine Services & Storage's Meader said.

"We've finally reached a tipping point," he said. "It's a pretty exciting thing to see and we're happy to be part of it."