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Positive signs of recovery for the wine industry in 2010. We can all breathe a sigh of relief that consumers are drinking again. Well, they never stopped drinking, just now they’re drinking the good stuff. Consumers are now buying $25-$50 bottles of wine whereas last year and the year before they were buying bottles under $15.
I got to thinking about what it costs to produce a bottle of wine. Things that factor into the price have a lot to do with the work done in the vineyard. Each time vineyard workers go through the rows and touch the vines, it costs money. In good vintages, a winery will get good fruit with less touching of vines, hence, less cost basis. In a bad year, a winery might have to do a significant amount more work just to get fruit to a good place by harvest. From vintage to vintage, these are unfixed costs that can’t be controlled. If a winery is buying fruit from another vineyards, there might also be a fluctuation of what the fruit costs per ton. In 2010, many vineyard in Northern California lost 20-30% of their crops because it was a cool summer. Grapes weren’t getting ripe, so vineyard managers cut leaves off the vines that normally act as shade from the sun. Mother nature, it seems, has a sick sense of humor. Shortly after leaves were cut off, there was a heat spike over 100 degrees for a few days. That turned 20-20% of grapes into raisins. Without the normal leaf shade, the grapes didn’t stand a chance.
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One (somewhat) fixed cost in wine is the cost of oak barrels. A brand-spanking new French oak barrel costs somewhere around $800-1200. A barrel can be used a few times before it becomes “neutral,” or doesn’t impart oaky flavor. American oak is an option, but French oak is the preferred choice. Wineries order pallets of oak barrels each year. Do the math with me. If a winery buys 500 new oak barrels at an average of $1000 per, that’s $500,000 in barrels.
Here’s where my brilliant idea for financial recovery comes into play: Use less oak. Simple, huh? In 2010 I tasted more overly oaked wines than I cared to. Why on God’s green earth are winemakers oaking the shit out of their wines? This is a debate that’s been around for years, but I’m really baffled. Cut the amount of oak down 25% on your next barrel order. Actually make wine that expresses the vineyard and don’t cover up flaws with an orgy of French oak. Not only could wineries save a few hundred grand, but they might actually make a better wine. Why has nobody done this?
Take for example the 2007 Quilceda Creek Red wine from Washington state. For years I’ve been a lover of QC wines, and have ordered from their mailing list. After drinking (or trying to drink) this wine, I decided to drop off the list. At 15.2% alcohol, the lower tier QC resembled Vodka and Robitussin rather than a world class wine. There was so much oak on this wine, my wife and I literally could not finish it. We ended up making a sauce instead.
In Napa and Sonoma I’ve experienced something similar. Dozens of overly oaked wines that really have no reason to be so oaky. Robert Parker isn’t helping any by giving these behemoth’s inflated scores, and essentially rewarding them for oak.
So there it is, use less oak. That reduces the carbon footprint for shipping. It saves more trees. Wineries save on costs and wine drinkers get a better wine. What do you think?
here freaking here. Save money. Make better wine. No need to use oak extract, wood chips or sawdust either
maybe the idea is TOO easy….or maybe consumers are wanting overly oaked wines?
If you ask me, this is partly what natural wine is about. Making a wine of terroir, a wine of a particular place, as opposed to a general wine with a common taste. Several natural wine makers will use the term “minimal intervention” to imply no use of chemicals or fertilizers in the vineyard, little or no oak, no buying of yeasts (using native yeasts instead). Incidentally, these are ways to slash costs as well.
At least, that’s part of our conclusions so far, in the course of our project to make a documentary about natural wine in California. If you are curious to know more, here is our website: http://winobrothers.com
Great article Rick. I hear you on the over-oaking phenomenon, but let’s not blame the oak itself. Let’s blame the winemakers for overdoing it. Oak is a wonderful thing when used correctly with wines that can handle it like Meursault, some Aussie Semillon and in top quality red Bordeaux. Picture those wines without oak. It’s just not the same. Let’s bring balance back to the forefront. No one is ever upset with a well balanced wine regardless of the elements involved.
Thanks, Jon. I also point a finger at wine consumers who either think they want overly oaked wines and/or keep buying them. Winemakers are just giving the public what they want.
Good point ~ makes sense ~ Personally, I love oaky Chardonnays, so as long as those are not affected by this, it’s all good ; )
Glad to see natural wine is trending upwards
I agree that winemakers need to stop over oaking their wines… a kiss of oak can be great but no more oak monsters (the fruit bombs I can deal with).nnFrom a cost perspective though, it’s more risk than added cost… if you sell through your inventory every year whether you buy 1 barrel or 500 barrels you would be looking at the same cost per bottle.nnEach barrel should produce 25 cases of wine, so you’re looking at approximately $3.33 per bottle in additional cost assuming the barrel isn’t reused by the winery or resold to another winery.nnThe $500,000 barrel buy really only becomes a major cost when you can’t sell through what you produced. So it definitely increases risk but for a popular winery that moves inventory the additional cost is mangeable if it helps sell more wine.
Thanks for that break down, Mike. Would you say a kiss of oak, but with no tongue?
Depends on how hot the wine is
Love the idea, Rick! Maybe winemakers are giving consumers what they want out of wine, though…but then again, maybe most consumers don’t know what they want out of wine. I like wine that is balanced in price, flavor, oak program, acid, etc. I’d love to see this idea take hold. It makes economical sense and it will present better wine. Anyone can look good dressed up in a $1200 suit.nnJosh
Love hearing your insights, Josh. Would be interesting to hear what visitors to your new tasting room think.
Love the idea, Rick! Maybe winemakers are giving consumers what they want out of wine, though…but then again, maybe most consumers don’t know what they want out of wine. I like wine that is balanced in price, flavor, oak program, acid, etc. I’d love to see this idea take hold. It makes economical sense and it will present better wine. Anyone can look good dressed up in a $1200 suit.nnJosh
Rick,nnFantastic post! As I’m sure you know by now, I am an Old-World wine girl. And the biggest deterrence to by becoming a fan of California wines is in one word (okay maybe two if you include malolactic) … OAK! Enough with the oak already, CA. I’m sick an tired of feeling like I am licking a 2-by-4 each time I sip on a chard. If I can’t taste all the subtle nuances of the actual grape varietal because there is too much char, vanilla or chocolate — that means the oak needs to be turned down a notch. And now, as a resident of CA, I totally agree with Rick — wineries who want to cut down on costs should look into how much they spend on oak and whether or not their wines really need it. nnGood read Rick, definitely something to ponder!nnCheers,nnWenchie
Thanks, Ashley. You are the $#@&! Beer Wench fo’ sho’
I have found that many wineries already choose to save money in this area but unfortunately they don’t forego the oak altogether, they employ “a chipping program” as one “winemaker” once informed me. feh.
I could NOT agree more – thank you for voicing what I have been thinking for years! I don’t drink CA whites – old world only for me, unless the CA white has been in stainless steel. And the reds – I’m tired of feeling like I just gnawed on toothpicks.nnIf you start a petition, count me in as a signatory!
Glad to hear it, Jen. Hopefully wineries will listen.