2017 Closure Survey Report (pages 20-30)

WINE BUSINESS MONTHLY July 2017 • $5.95

The Industry’s Leading Publication for Wineries and Growers

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WBM/SVB Tasting Room Survey:

Average Lifetime Value of Wine Club Members On the Rise

PLUS:

Three Successful Approaches to Customer Relationship Management Checklists: Preparing the Crush Pad

and Lab for Harvest Closure Survey Results, Trials and News The Long, Hard Truth About Producing Spirits

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When you’re close to Nature, you’re never far from innovative solutions.

The world’s fastest train is also the loudest. Japanese bullet trains make a huge racket when they emerge from tunnels.

To dampen the noise engineers took a cue from the kingfisher, which barely makes a ripple when it dives into the water.

The redesigned nose cone is quieter, faster and more efficient. Domo arigato, kingfisher.

Closer to Nature

month in review WINE BUSINESS MONTHLY July 2017 • Volume XXIV No. 7

JULY 2017

WINE BUSINESS MONTHLY July 2017 • $5.95

Average Lifetime Value of Wine Club Members On the Rise

SENIOR TECHNICAL EDITOR Curtis Phillips MANAGING EDITOR Rachel Nichols ASSISTANT EDITOR Erin Kirschenmann STAFF WRITER Bill Pregler

Tasting Room SURVEY • CLOSURE SURVEY

hard to believe that it’s July already. That means it’s almost time for harvest, which means it’s time to start preparing for it.

Fortunately, we have two extended checklists with tips and reminders about getting the crush pad and the lab ready for action. These checklists can be quite useful and they’re more than a bunch of bullet points. If you didn’t catch the checklist on bottling we published last month, by the way, check that one out too. That was the best checklist on getting ready for bottling that I’ve ever read and, no, it wasn’t the only checklist on getting ready for bottling that I’ve read.

The Best Wine-in-a-can Story I’ve Ever Read: We seem to be awash with articles about how cans are the next thing, then it seems like they never are but, finally, it seems as if cans have been emerging as mainstream during the past year or two. That’s because of growing consumer acceptance but it’s also because some major retailers and sizable wine producers are on board. We wrote about wine-in-cans gaining in popularity from a marketing perspective last month. This month, though, we dive way deep into the nuts and bolts of a new canning operation and look at what it takes to put a wine-inthe-can program together. It takes some planning.

Thinking About Diversifying by Getting Into Spirits: Craft spirits have been gaining appeal with consumers for some time and a number of wineries have decided to get into the game. Wine Business Monthly will be covering spirits from time to time—quarterly at least— with an emphasis on what wineries should consider if they’re thinking about moving into it. This month’s article looks at lessons learned by three wine companies that successfully ventured into spirits.

P E R S O N A L LY, I ’ M F I N D I N G I T

www.winebusiness.com

WBM/SVB Tasting Room Survey:

WINE BUSINESS MONTHLY

Ready, Set, Harvest

The Industry’s Leading Publication for Wineries and Growers

EDITOR Cyril Penn

COPY EDITOR Paula Whiteside

PLUS:

Three Successful Approaches to Customer Relationship Management Checklists: Preparing the Crush Pad and Lab for Harvest

Closure Survey Results, Trials and News The Long, Hard Truth About Producing Spirits

Managing the Tasting Room: The July issue includes results of the 2017 Tasting Room Survey produced in association with Silicon Valley Bank. The survey drew an amazing response rate—a testament to how important direct sales are to most wineries. The team at Silicon Valley bank did an incredible job crunching and analyzing data. Thank you to the wineries that took the time to respond.

Making Lemons into Lemonade: Most of us have heard the stories about how Jess Jackson’s stuck fermentation turned into Vintners Reserve Chardonnay, or about how an accidental experiment led Bob Trinchero to White Zinfandel. Lance Cutler interviews several winemakers about their winemaking horror stories this month. It’s cool that Lance was able to get these winemakers to be open and honest about these experiences. It’s even cooler that, in most cases, the winemakers came up with creative solutions for working their way through tough situations. Harvest can be fraught with unexpected challenges—even if you’ve prepared with the help of a WBM checklist.

Cyril Penn, editor

CONTRIBUTORS Jennifer L. Blanck Lance Cutler David Furer Mark Greenspan Neil Johnston Michael S. Lasky Jake Lorenzo Liza B. Zimmerman DESIGN & PRODUCTION Scott Summers PRESIDENT & PUBLISHER Eric Jorgensen ASSOCIATE PUBLISHER Tamara Leon ADVERTISING Business Development Manager Bob Iannetta Account Support Representative Mary Anne Stockus Classifieds Jacki Kardum ADMINISTRATION Vice President – Data Management Lynne Skinner Circulation Liesl Stevenson Operations Analyst/Customer Support Katie Kohfeld Office Manager/Customer Support Jacki Kardum Office Assistant Olivia Haywood CHAIRMAN Hugh Tietjen PUBLISHING CONSULTANT Ken Koppel For editorial or advertising inquiries, call 707-940-3920 or email info@winebusiness.com For subscriptions, call 800-895-9463.

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6 July 2017 WBM

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Sugarcane converts sunlight into sucrose.

And cynics into believers.

Used to be, engineered closures didn’t look as good as natural cork.

That was the trade-off you had to make to avoid natural cork’s shortcomings.

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Closer to Nature

contents

July 2017 • Volume XXIV No. 7 • The Industry’s Leading Publication for Wineries and Growers • www.winebusiness.com

winemaking

sales & marketing

2017 Closure Survey Report Natural Cork Remains Favored Closure Type at Small Wineries . . . . . . . . . . . . 20

2017 WBM/SVB Tasting Room Survey Report

Winemakers feel consumer acceptance of screw caps is increasing

Direct-to-Consumer Sales Account for 60 Percent of Winery Revenue, Volume and Value Gaining . . . . . . . . 70 Cyril Penn

Curtis Phillips

Perspectives on Tasting Room Staff Training . . 80

Winemaker Trials Comparing Composite Alternatives to Natural Cork Closures . . . . . . . . . . . . . . . . . . . 28

Study of Virginia wineries reveals commonalities, best practices

Scot Covington, like most winemakers, wondered just what sensory and aging comparisons would be found in 2014 Russian River Chardonnay bottles topped with natural and composite corks opened after a year in the bottle.

Michael S. Lasky

Closure News . . . . . . . . . . . . . . . . . . . . . . . . 30 Winemaker Roundtable: Horror Stories . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Winemakers tell the haunted tales of harvests gone wrong and their rather creative solutions to the problems.

Lance Cutler

Jennifer L. Blanck

Designer Sets Out to Simplify Packaging Purchases . . . . . . . . . . . . . . . . . . . . 84 New online marketplace allows winemakers to purchase bottles and closures on their own time—and receive their purchases in a timely manner.

Growth Continues in California-appellated Wines . . . . . . . . . . . . . . . . 86 More multi-region, California-branded wines are hitting the market than ever before Liza B. Zimmerman

Retail Sales Analysis Off-Premise Wine Sales Increase 6.1 Percent . . 88

Checklists: Getting the Crush Pad Ready to Receive Grapes . . . . . 40 Curtis Phillips

Getting a Winery Lab Ready for Harvest . . . . . . . . . . 44 The important lab analyses you should be conducting during harvest Curtis Phillips

What Wineries Need to Know Before Adding Distilled Spirits to Portfolios . . . . . . . . . 50 While producing distilled spirits can ultimately be a profitable addition to a winery’s portfolio, potential distillers might face high set-up costs and long, patience-demanding barrel-aging periods before any profits materialize.

Michael S. Lasky

departments month in review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 news In Case You Missed It. . . . . . . . . . . . . . . . . . . . . . 12 what’s cool: Canning Line Operations, Quality Control and Certification . . . . . . . . . . . . . . . . . 14

technology & business Wineries Reap Profitable Benefits with CRM Software . . . . . . . . . . . . . . . . . . . . . . 92 Michael S. Lasky

New York Winegrowers from East to West Ponder Decisions Made . . . . . . . . 96 Notables from Long Island and the Finger Lakes share the ups and downs.

David Furer

grape growing Necessity is the Mother of Technology . . . . . . . . . . . . . . . . . . . 56 Technology available to support vineyard management

Bill Pregler

people . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 advertiser index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 jake lorenzo Timing. . . . . . . . . . . . . . . . . . . . . . . . . 106 winemaker of the month. . . . . . . . . . . . . . . . . 105 Ashley Herzberg, winemaker, Amista Vineyards, Dry Creek Valley, California

Mark Greenspan

An Empirical Study: Freeze Damage’s Effect on Grape Development and Wine Quality . . . . . . . . . . . . . . . . . . . . . . . . 62 Research shows how the November 2014 freeze event in Walla Walla, Washington affected cluster morphology, juice chemistry, wine chemistry, phenolics and sensory perception of 2015 Walla Walla Valley Cabernet Sauvignon.

Neil Johnston

Cover Photo: Richard Duval Rusty Grape Vineyard in Battle Ground, WA Cover Design: Scott Summers

Wine Business Monthly (ISSN 1075-7058) is published monthly by Wine Communications Group, Inc., 35 Maple St., Sonoma, CA 95476. Subscription rates are $39 for domestic; US$49 for Canadian and US$89 for foreign subscribers. Periodicals Postage Paid at Sonoma, CA, and at additional mailing offices.

POSTMASTER: Send address changes to: Wine Business Monthly, PO Box 1649, Boulder, CO 80306-1649.

WBM

who’s talking in this issue

July 2017

Joan Kautz, co-owner, Ironstone Vineyards, “Growth in California-appellated Wines Continues,” page 86

“With the exception of Napa and some Sonoma wines, consumers do not necessarily know other AVAs; thus a California appellation can be advantageous and provide security to the consumer that they are buying a great wine at a great price.”

Zeke Neeley, winemaker, Kenwood Vineyards, “Winemaker Roundtable: Horror Stories,” page 32 “That is one of those stories that reminds me that you can never give up during harvest. There is always a way to make it work.”

Steve Fredericks, Turrentine Brokerage Market Update, “Growth in California-appellated Wines Continues,” page 86 “Bulk wine buyers across all price points and regions have [their] choice of lots due to more volume for sale, which has led to increased quality standards and offering prices that are generally lower than last year.”

Jeff Zappelli, general manager, WALT Wines, “Wineries Reap Profitable Benefits with CRM Software,” page 92 “The genius of CRM is it’s not perfect when it starts. If you have a good strategy for the data you want to put into the system, then it evolves over time as more and more data is entered in.”

Stephanie Friedman

, director of consumer sales and marketing, Seghesio Winery, “Wineries Reap Profitable Benefits with CRM Software,” page 92

“I think wineries often live with what they have because, let’s face it, technology can be scary. Learning new systems can be scary.”

10 July 2017 WBM

news

For daily news you can search or browse by region, visit winebusiness.com/news

In Case You Missed It – Top Stories from WINE BUSINESS.com Saintsbury Co-founder, Richard Ward, Passed Away Richard Ward, co-founder of Saintsbury Winery, advocate for the Napa Valley and champion of fine Pinot Noirs and Chardonnays from the Carneros region died on May 27, 2017. He was 67 years old. Ward and his business partner David Graves founded

Saintsbury in 1981, deciding to focus on Burgundian varieties in the cool southern parts of Napa Valley. “Dick was a wine person, through and through,” says wine writer, Tim Atkin. “But he wasn’t a wine bore or a geek. He just wanted more people to enjoy good wine, especially if it was Pinot Noir. Burgundy was a source of inspiration, but he didn’t revere it the way some vintners do.”

Jackson Family Wines Makes Moves in Central Coast Jackson Family Wines made its third Pinot Noir-focused winery purchase of the year with the acquisition of Brewer-Clifton

in the Sta. Rita Hills. With the purchase, JFW will take ownership of 60 acres of estate Pinot Noir and Chardonnay vineyards, second brand Diatom, and a long-term lease on the winery and tasting room, which is located in Lompoc, Calif. While terms of the sale were not disclosed, co-founders and partners Greg Brewer and Steve Clifton sold their shares to a group of investors, led by Ken Fredrickson back in 2015. Clifton took a step back, but Brewer remained with the winery and will continue on in a winemaking capacity. JFW, in turn, purchased from the group which, while it had plans for “strategic growth” was not expecting to sell again so soon.

Jeb Dunnuck Leaves Wine Advocate to Launch His Own Site Returning as an independent wine critic, Jeb Dunnuck announced he was stepping down from the Wine Advocate to launch JebDunnuck.com, which will offer comprehensive, consumer-focused coverage of wines and launch in July. Subscribers will have access to a bimonthly downloadable newsletter, integration with Eric LeVine’s Cellartracker.com website, and a searchable database of reviews, as well as special articles and videos from Dunnuck.

Champagne Jayne Wins Fight Against Comité Champagne After a nearly three-year battle with the Comité Champagne (CIVC), wine writer and educator Jayne Powell, better known as Champagne Jayne, won the right to keep her moniker. In December 2014, the CIVC pursued legal action against her, arguing her brand name had “damaged the goodwill of the Champagne sector” since she promoted and discussed sparkling wines other than those from the Champagne region. In addition, the CIVC asserted that the use of Champagne in her brand name had violated the terms of the Australian Grape and Wine Authority Act. Justice Jonathan Beach of the Melbourne Federal Court ruled that the CIVC had not provided enough compelling evidence to force Powell to cease using her business name or withdraw her trademark; however, he noted that she had engaged in misleading or deceptive conduct in her use, reference to and promotion of sparkling wines while also using the Champagne name in relation to some of her social media posts, the Australian Associated Press reported. Arguments over the appropriate actions in regards to social media accounts and use will soon be presented.

Moersch Family Acquires Tabor Hill; Largest Winery Purchase in Michigan History With the largest Michigan winery purchase in the state’s history, the Moersch family, operating under Entente Spirits, will more than double its annual wine production—Tabor Hill is currently Michigan’s fourth largest winery. Along with expanding production, this acquisition adds 25 acres of existing vineyards, Tabor Hill’s award-winning restaurant and three retail locations. Entente Spirits, LLC, the parent company of the Moersch family, includes a portfolio of complementary businesses including Round Barn Winery, Distillery and Brewery; Free Run Cellars and Round Barn Public House.

12 July 2017 WBM

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what’s cool Products that are smart, make your tasks easier and provide cost or labor savings Bill Pregler

Bill Pregler has worked in the winery equipment industry for many years and is a staff writer for Wine Business Monthly.

Canning Line Operations, Quality Control and Certification the benefits of aluminum cans, their history and how they are made. This month I focus on the individual components of a new canning line installed at Free Flow Wines and their protocol for maintaining strict quality control standards, the compliance certification of “can-to-product” as required by Ball Beverage Packaging (the makers of aluminum cans), and I’ll address the interior coating of cans and concerns people have about epoxy and BPA (Bisphenol-A).

When viewing the line at Free Flow Wines, my primary attention was on the similarities and differences between a canning line versus a bottling line.

What was really cool was that all of the individual vendor technicians for all of the different components were on hand in Napa that day and amenable to all my questions.

The system integrator for the project was Codi Manufacturing of Golden, Colorado, which has years of experience in both machinery design and fabrication. For an overview I spoke with the owner, Jared Jones.

LAST MONTH I DISCUSSED

can is far superior to a blast into a narrow-necked bottle—hence why many bottlers use rinsers.

Next is the Codi Model CCL-45 filler-monoblock, which reminds you of a traditional bottle filler except it seams a lid instead of driving a cork or spinning a screw cap. The precautions against O2 pickup are the same: sparging, filling, sparging again and sealing the package. It is a compact unit with all 304 stainless steel construction. As it normally processes beer, which is full of proteins, it has all the necessary sanitary precautions and protocol, utilizing fully enclosed CIP systems. Currently, they use 185° F water with the ability to run caustics. I suggested they start considering steam in the future.

The Canning Line The line begins with the Codi Model DPL-250 automatic depalletizer, the canning line’s version of a dump table for bottles. It is rated to set the pace at about 50 to 60 cans per minute.

In “can world,” there are no 12-pack boxes of empties (as in glass), and all cans arrive on slip sheets, separating multiple layers of cans stacked on a pallet. For the 250 ml can, the machine holds a pallet that accommodates 21 layers of 389 cans each. The unit will handle cans up to 500 ml in size. An automated sweep-arm pushes rows of cans onto a conveyor that leads to the filler. As the cans head to the filler, they are rotated 360 degrees in a corkscrew motion and blasted by an ionized air-rinser to remove any static charge in the can, which can hold dust. In contrast, a blast of air into an open-top

14 July 2017 WBM

BILL PREGLER

The largest machine in the canning line is the Codi Depalletizer, which immediately leads to the filler.

For at least a decade our full-time team of scientists have pioneered and fine-tuned a unique process they call “Barrel Profiling.”

Through a comprehensive and exhaustive series of trials and tastings, this method allows a winemaker to precisely recreate (and tweak, if need be) their wine aged in the exact barrel of their choice—using our alternative aging tools. We offer the widest spectrum of toast levels and techniques. Our cutting edge Barrel Head products combined with our Micro-Oxygenation component demonstrate StaVin’s twenty-eight rich years of experience, learning and understanding the fickle nuances of barrel flavors. And let winemakers play god.

StaVın Inc, Post Office Box 1693, Sausalito,CA 94966 Tel.(415) 331-7849 fax (415) 331-0516 stavin.com

© 2017 StaVin Inc.

®

Canning Line Operations, Quality Control and Certification

BILL PREGLER

After the Codi counter-pressure filler, the highly compact canning line quickly transits from seamer to rinser, labeler to heat tunnel.

After filling, a final dose of N2 is applied, and the lid is immediately secured. and uses highly refined 210 line resolution. Order turnaround is usually The cans exit the filler to a washer, which removes any residual wine on the weeks instead of months and, again, there are no minimum orders. outside. Next, they go through a series of air knives to dry the can and then, The sleeving machine was supplied by Pack Leader USA of Grandview, Missouri. I spoke with company owner Karl Lavender about the easy like a bottle, head toward the labeler.

When considering your can’s artwork, there are two options: direct printing onto the can by the can manufacturer or applying a 360-degree, pre-printed shrink sleeve over the can. Ink printing directly on the can is generally for larger quantities, into the hundreds of thousands and above, and the lead times from the manufacturer are often counted in months. Such is the business of cans.

For smaller quantities and quicker turnaround times, printed shrink sleeves are the alternative of choice. Sleeves are typically printed on the underside of the clear material, protecting your art from scuffing.

Because the cans are metallic silver, the sleeve imagery is either metallic, non-metallic or a combination of both.

Hands-down, sleeves are the best option when starting your can program. First, you do not need to worry about large minimum orders as with pre-printed labels, and you also get all the fantastic benefits of digital printing. At Free Flow, sleeves are printed on high-speed HP-Indigo presses at Multi-Color Corporation, under the direction of Dan Welty, digital print manager. By now, digital labeling is also mainstream. By far its major appeal is its flexibility and ease in BILL PREGLER making last-minute graphic adjustments. This is especially cool when The final stage is from pack-off to semi-automatic stretch-wrapping of introducing a new SKU, adjusting colors or fine-tuning a new design. cardboard trays. Wineries can specify package sizing with/without can handles.

Digital also has no color limitations, is not restricted by Pantone inks 16 July 2017 WBM

E N H A N C I N G

C R A F T S I N C E

etslabs.com

1 9 7 8

Canning Line Operations, Quality Control and Certification

Coatings, Wine Certification and BPA Probably one of the most important aspects of canning science is the liner inside the can. For obvious liability reasons, Ball is very particular about what people put into their cans, and every product must pass its package-product compatibility tests. I hear there are literally thousands of different coatings to accommodate the different corrosive levels of products, from tomatoes, fish, pickles and fruit drinks to sports drinks, beer and now wine.

An uncoated aluminum can full of cola will disintegrate in three days, for example—remember, you can also use it to clean your battery terminals.

Per directions from Free Flow, wineries will submit samples of their wines to the laboratories at Ball, and their chemists will determine the aggressiveness of the product.

According to Heather Clauss, VP of marketing at Free BILL PREGLER Part of the quality control protocol is to measure lid-to-can seaming as specified by the can Flow, they will be looking at total alcohol content, pH, free SO2, copper and DO, among others. Ball then issues manufacturer. Permanent records are stored for the winery and by Free Flow Wines. a certificate of compliance, which is a warranty on the structural integrity of the can. The winery presents this documentation to learning curve of the touch screen controls, which offers quick set-up with Free Flow prior to filling. That certifies the integrity of the can—but what job memory and quick trouble-shooting menus. Naturally, it is also built of about the integrity of the wine?

304 stainless steel as a nod to the cellar’s corrosive environment. Free Flow BPA, or Bisphenol-A, is a resin that is often a component of interior uses the Model SL-10, which will handle up to 200 CPM, depending on size coatings. In the past, people may have heard BPA is an endocrine-disrupter. of can. Like PS labels, shrink sleeves come on a roll but are cut with rotary I spoke with Melanie Virreira, director of marketing for Ball Packaging, who blades. Machine speed is based on length of sleeve, which is based on the has been developing the wine-in-can market for the last three years. Ball has height of the can. already dealt with the issue, and its proprietary coatings are now available Similar to bottling lines that use shrink foils, this line moves through a heat throughout its 40 plants around the world. tunnel to secure the sleeves. Interestingly, it uses steam and not electric heat.

I spoke with Ben Parsons, winemaker at the Infinite Monkey Theorem One nice thing about steam is that it creates an environment of constant Winery in Denver, Colorado, as one of the first wineries to successfully temperature. Often operating at much higher temperatures, electric tunnels market canned wine. He worked closely with Ball’s testing protocol. Together may result in hot spots, which can distort shrink labels. The cans pass through they conducted tasting panels for more than a year prior to the product’s very quickly, dispelling any concerns about heating the wine in the can. release. Currently, his SKUs include a red (Merlot) blend, a Chardonnay, The last link in the chain is the semi-automatic stretch wrapper/bundler Rosé, a cider and a soon-to-be-released carbonated white. from EDL Packaging in Green Bay, Wisconsin. I spoke with Matt Tresp, regional sales manager, who told me it requires hands-on operator loading of cans onto cardboard trays, which is followed by a wrap of plastic stretchwrap. The machine can be upgraded to accommodate growth, all the way to fully “lights-out automation”—an expression I like. There are a variety of packing configurations available, from four-packs to 24-packs, all specified by the winery.

Quality Control Testing Throughout canning day, the Free Flow laboratory folks are constantly checking the quality of cans after the filler. Using specialized lab equipment, the can integrity and wine inside are checked, and records are stored permanently in computer files for both Free Flow and the winery. Naturally, the physical parameters of the cans’ integrity are determined by Ball.

The lids are checked for consistency of depth and alignment. Thereafter a special tool slits the can to check for the thickness and integrity of the seam between the outer can surface and the applied lid. This is photographed for documentation.

The wine is also checked for both DO and SO2, and Free Flow again works directly with the winemaker to establish the limits of both.

18 July 2017 WBM

Canning Goes Mobile I suggest wineries start by giving cans an exploratory try. To make it even easier, there are mobile canners on the road. They started a few years back for the small craft breweries and are already moving toward wine. My last stop when writing this article was to visit with Eric Holthouse, supervisor of operations at Foley Family Wines (Sebastiani, Guenoc, Firestone, etc.) in Sonoma. I had received an invitation to visit Lindsey Herrema, owner and “can wrangler” of mobile company The Can Van. I hope to have a follow-up What’s Cool article on mobile canning within the next few months. By now Foley Family Wines is comfortable with cans and will soon be putting their Guenoc wines in cans using the new canning line at Free Flow.

What’s Cool:

As to be expected while writing this article, I heard lots of chatter about cans replacing glass. That is ridiculous. Please remember that aluminum cans, like stainless steel kegs in restaurants, are nothing more than an opportunity for wineries to diversify and get their product into the hands of more customers. That is totally cool.

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The opportunity to sell wine in glass-free environments, like public spaces, from pools to NASCAR races and concert arenas, is one of the advantages of packaging wine in cans.

Successful packaging is when form (design) and function (ease) are perfectly aligned to accommodate a specific application. For example, a 19.6-liter keg of premium wine is perfect for large venues, like country clubs hosting weddings or fine restaurants with wine-by-the-glass programs. At 58 pounds and 24 inches tall, a keg probably will not work inside your home refrigerator.

Bottles are great in dinner settings where one might want the “pop” of the cork and the romance, but probably not important while backpacking, where weight matters. Meantime, the can is great for venues that don’t allow glass.

If I were a winery and knew the next annual wave of wine was headed my way post-crush, I would make certain to offer my customers any and all alternatives to help deplete my inventories: by selling them a bottle from the tasting room AND a four-pack of cans with the same wine for their next fishing trip.

In the words of Oregon-based Union Wine Company, “We believe the contents are more important than the container; that a good wine should be able to go anywhere.” As a spoof to many in the wine world, a line on their can states, “We love our wine, we just don’t drink it with our pinkies in the air.” WBM

WBM July 2017 19

winemaking

2017 Closure Survey Report

Natural Cork Remains Favored Closure Type at Small Wineries Winemakers feel consumer acceptance of screw caps is increasing Curtis Phillips Curtis Phillips, an editor for Wine Business Monthly since 2000, is a graduate of UC Davis, and has been a winemaker since 1984 and an agricultural consultant since 1979.

natural cork continues to be the most popular and most frequently used closure type, according to Wine Business Monthly’s 2017 Closure Survey Report. More than a third (36 percent) of the wineries surveyed are using screw caps to close at least some of the bottles they produce.

AS IN PREVIOUS YEARS,

Other highlights from the 2017 Closure Survey Report include: • Most wineries are using more than one closure type.

• Winemakers think that consumer acceptance of screw caps is increasing.

• Winemakers from large and mid-sized wineries are much more likely to use technical cork closures than those from small wineries.

Size Matters: A Tale of Two Wine Industries WBM has been asking winemakers about closures since 2004. One of the advantages of having that much historical data is that it’s pretty easy to see if a suspected trend is real or is merely an artifact of a given year’s survey.

One of the more noticeable pieces of information we see in the accumulated surveys has less to do with the actual questions asked than the difference between the responses given by winemakers according to the size of the winery for which they are working. Size matters. No matter the survey we take, winemakers from large wineries usually tend to answer differently than those from small wineries.

As one might suspect, the boundary between large and small wineries is fairly fuzzy, and the respondents from mid-sized wineries form a spectrum between the two extremes.

CHART 1

CHART 2

Please indicate what type of closures your winery currently uses on 750 ml bottles.

Natural Corks

Technical Corks

Synthetic Closures

Screw Caps

100% 90%

By Winery Size

80% 70% 60% 50% 40% 30% 20% 10% 0% 2004 SOURCE:

2005

2006

2017 WBM Closure Survey

20 July 2017 WBM

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

SMALL

MID to LARGE 2017

2017 Closure Survey Report: Natural Cork Remains Favored Closure Type at Small Wineries

Closure Usage The responses for overall closure usage for wineries that produce fewer than 50,000 cases per year are shown in C H A R T 1 . The responses from larger wineries are included in these data, but they are obscured by the much larger number of small wineries, both in the United States wine industry and participating in the 2017 WBM Closure Survey.

Except for technical corks, it appears that the usage of all other closure types has dropped. Mostly, this is an artifact of the way this survey measures usage. Respondents are asked which closures they use and to include all closure types in use at their facility. As one can see from the chart, the sum of the categories is well over 100 percent. Any decrease in a given closure type

INSIDE

“

is most likely to be indicative of a trend toward the use of fewer different closure types among smaller wineries.

C H A R T 2 shows the 2017 data, but with the responses from small wineries, those wineries that produce fewer than 50,000 cases of wine per year, separated from mid-sized and large wineries. We see that across the board, the larger wineries are more likely to be using any particular closure type. Just over three-quarters (77 percent) of the respondents from mid-sized and large wineries indicated they are using natural cork closures while more than half (68 percent) are using screw caps. Sixty-eight percent of small wineries are also using natural cork closures, but only a third (35 percent) stated that they are using screw caps. Technical and synthetic closures show similar differences between small wineries and wineries that produce more than 50,000 cases per year, with technical corks having the most extreme differential. Mid-sized and large wineries are almost twice as likely to use technical corks as small wineries.

NATURAL

TECHNICAL

SYNTHETIC

SCREW CAP

I’ve used STELVIN® closures for over a decade and I am impressed by the reliability, aromatics preservation and consistency from a bottle to another. I especially rely on STELVIN® Inside to keep my wines at their highest quality for years.

FLO MERLIER

“

HEAD WINEMAKER, VAN DUZER VINEYARDS

For descriptions of each closure type, see page 24.

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22 July 2017 WBM

STELVIN® is a trademark of the AMCOR Group

Readers should also note that the results of the 2017 WBM Closure Survey are not weighted by the number of bottles closed by a given closure. This means that if a winery sells 100 cases closed by screw caps, 1,000 closed by technical corks, 100,000 closed by synthetic closures and 1 million closed with natural cork, the winery should have checked each closure type for their response.

We dare you Not here.

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Or in here.

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Nope.

find the TCA It’s always been hard to find TCA in our corks. In a onebyonetm tested cork, it’s impossible. And we'll guarantee that.* onebyonetm means just what it says: Each individual cork is tested, using gas phase spectroscopy, the same technology used to verify the purity of pharmaceuticals. Any cork with a detectable level of TCA is rejected—period.

* The fine print: releasable TCA content below the 0.5 ng/L quantification limit

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707.636.2530

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Natural Cork Remains Favored Closure Type at Small Wineries

CHART 3

Please provide an overall rating for each of the closures listed. (1-Very Negative and 5-Very Positive) 5

4

3

2

Natural Corks SOURCE:

Technical Corks

Synthetic Closures

2017

2015

2013

2011

2009

2007

2005

2004

2017

2015

2013

2011

2009

2007

2005

2004

2017

2015

2013

2011

2009

2007

2005

2004

2017

2015

2013

2011

2009

2007

2005

2004

1

Screw Caps

2017 WBM Closure Survey

Overall Ratings The overall ratings for closures are shown in C H A R T 3 . Natural corks, technical corks and screw caps have all seen slight increases in their overall ratings over the past 13 years. The winemaker overall ratings for synthetic closures have been more or less flat since 2007.

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Although not captured by this chart, and with the exception of natural corks, which were given a uniformly high rating, winemakers from mid-sized and large wineries rated all closure types slightly more highly than their counterparts from smaller wineries.

WINE CLOSURES Natural cork is the most frequently used closure by winemakers due to its ability to compress and expand to form a tight seal, as well as allow the wine to breathe over long periods. Natural cork is regarded as environmentally friendly since corks are easy to recycle and cork is sustainably produced (the same trees are stripped about every nine years). historically, the main drawback of natural cork is the possibility of wine developing cork taint (“corked”) brought on by TCA (2,4,6-trichloroanisole) in the wine, which in most cases is said to be imparted by the cork itself due to natural occurrences in the cork or to how it is processed. Over the past couple decades, the cork industry has changed or improved their production processes to the point where there is much less of a chance of TCA contamination. Several vendors now are also guaranteeing their closures have below the detection-threshold levels of TCA. Technical corks include any closure made from cork granules. Often they are made to resemble natural corks and are manufactured using a combination of agglomerated natural cork granules, a binding agent, with other optional parts.

Four our purposes, this category includes highly-engineered closures like the DIAM that include non-cork ‘microspheres’ as well as cork granules and binding agents.

Sometimes with natural cork disks glued to the ends (in contact with the wine).

These types of corks are also know as “1+1” corks (there are also 2+0: two disks on one end, and 2+2: two disks on each end) and have a low incidences of cork taint compared to natural corks. Technical corks are efficient at preserving sulfur dioxide concentrations within the bottle, and are most commonly used with wines that are meant to be consumed within the short-term (two to three years).

The “Twin Top” is the most well-known technical cork developed.

Synthetic closures mimic natural cork closures in how they look and function, for the most part, but are made of plastic (injection-molded or extruded), thus do not present the risk of TCA contamination. The most commonly cited drawbacks of synthetic closures include: difficult to remove from the wine bottle (as well as re-seal) and higher risks of oxygen permeation than natural cork, although this latter aspect has seen improvement. Historically, synthetic closures had drawback that has created some opposition to synthetics is their environmental impact, as they are oil-based and are not biodegradable like a natural cork. However, some synthetic closures on the market are made from plant-derived ethanol rather than petroleum.

Screw caps, also knows as “Stelvin caps,” ROTE caps (Roll On Tamper

24 July 2017 WBM

Evident), or ROPP caps (Roll On Pilfer Proof), are made from aluminum and seal onto a wine bottle’s neck in a threaded fashion, as opposed to being pushed into the bottle’s opening like a natural cork closure. Screw caps are said to offer a tighter seal, thereby protecting against cork taint and keeping unwanted oxygen at bay, serving to preserve aromas and improve a wine’s overall quality.

Conversely, some have accused screw caps of suppressing wine aroma and quality too much (reduction). Screw caps, the predominant closure choice in New Zealand, continue to rise in usage by U.S. wineries as U.S. consumers become more comfortable with them.

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Natural Cork Remains Favored Closure Type at Small Wineries

CHART 4

Please rate each of the closures in terms of consumer acceptance/perception. (1-Very Negative and 5-Very Positive) 5

4

3

2

Natural Corks SOURCE:

Technical Corks

Synthetic Closures

2017

2011

2009

2007

2005

2004

2003

2017

2011

2009

2007

2005

2004

2003

2017

2011

2009

2007

2005

2004

2003

2017

2011

2009

2007

2005

2004

2003

1

Screw Caps

2017 WBM Closure Survey

Perceived Consumer Acceptance

Bottling Line Performance

captures winemakers’ perception of the consumer preference since 2003. As such, this chart does not capture actual consumer preference but rather what winemakers think the consumer prefers.

This chart is interesting in a number of ways. Perhaps most notable is that natural corks have been held at a uniformly high level of perceived acceptance since WBM started asking this question. Similarly, technical corks have been given a uniformly high rating although they have not been as highly rated as natural corks. The only significant movement we see has been for synthetic closures and screw caps.

When C H A R T 3 and C H A R T 4 are compared with one another, we see that winemakers think that the consumer view of a given closure type more or less follows their own with the exception that winemakers are a bit less favorably disposed toward natural corks than consumers themselves are. The respondents to the survey took the opposite tack with screw caps and noted that they liked screw caps more than they thought the consumer did.

CHART 4

shows the average bottling line performance ratings given for the major closure types over a span of 14 years. The ratings for natural and technical corks have not changed significantly and probably indicate that these closure types are known quantities against which the bottling line performance of any other closure is judged.

For the most part, while winemakers are in agreement as to the bottling line performance for most closure types, the respondents from large wineries rated technical corks more favorably than did their counterparts from smaller wineries.

CHART 5

SCOTT SUMMERS

CHART 5

Please rate each of the closures in terms of bottling line performance. (1-Very Negative and 5-Very Positive) 5

4

3

2

Natural Corks SOURCE:

2017 WBM Closure Survey

26 July 2017 WBM

Technical Corks

Synthetic Closures

Screw Caps

2017

2011

2009

2007

2005

2004

2003

2017

2011

2009

2007

2005

2004

2003

2017

2011

2009

2007

2005

2004

2003

2017

2011

2009

2007

2005

2004

2003

1

The Wine Industry is in the Eye of the Beholder The WBM Closure Survey Report for 2017 shows that when it comes to closures, winemakers in the U.S. wine industry respond differently, according to the size of their wineries. Respondents from large wineries are more likely to use any given closure type. While most wineries are using multiple closure types, respondents from large wineries are more likely to be using three or more than are the respondents from small wineries.

Respondents from large and mid-sized wineries are nearly twice as likely to be using technical corks and synthetic closures than their counterparts from smaller facilities. WBM

Methodology This year’s Closure Survey received a total of 276 responses from across North America.

Eighty-two percent of survey respondents reported their job as being in winemaking, 62 percent as president/owner/GM, 44 percent in cellaring/production, 41 percent in sales/marketing and 39 percent in purchasing/finance (respondents were able to choose more than one function).

The purpose of the survey was to determine trends in wine bottle closure usage and perceptions within the U.S. wine industry. Please note that the findings of this survey are meant to offer a general look at trends and practices; it is not a scientific study and should be used only as a tool and a point of reference for further inquiry.

Caveats and Clarifications The WBM Closure Survey tracks the number of wineries that use a particular closure and does not track relative amounts or total cases bottled under a particular closure. Neither does the WBM Closure Survey capture closure usage in terms of numbers of units sold.

In terms of the total volume of wine produced, and therefore the total number of bottles produced, the U.S. wine industry is heavily weighted toward a very small handful of companies that produce about 80 percent of the wine bottled in the U.S. Their closure choices dictate which closures are in most of the bottles of wine consumed.

The total number of a particular closure type used on the high-speed bottling lines in Fresno, Modesto, Stockton and Madera is a nice point of trivia and is certainly important to the companies that supply the packaging materials used on these bottling lines, but it isn’t really relevant to the particular closure choices that a small or mid-sized winery on the Niagara Escarpment, the Michigan Upper Peninsula, Upstate New York, Washington, Oregon or even Napa Valley may use. The WBM Closure Survey should be interpreted as giving insight into the closure choices of individual wineries, not as a measure of which wine closure types have the largest shelf presence in U.S. grocery stores.

The WBM Closure Survey reflects the U.S. wine industry as a whole. The largest half-dozen wine companies account for more than 80 percent of domestic wine sold in the U.S. market. By contrast, the wine produced by more than 8,000 wineries makes up that remaining 20 or so percent. The survey is focused on individual winery operations and doesn’t capture closure usage in terms of numbers of units sold.

Synthetic closures are a good illustration of this phenomenon; for several years now the WBM survey has been showing a slight but steady decrease in the number of wineries that use synthetic closures. At the same time, it appears that more wines are bottled under synthetics than ever. We may be well past the point where more than half the wine bottles in the U.S. are closed by synthetic closures but only 10 percent of wineries use them.

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WBM July 2017 27

winemaking INNOVATION+QUALITY

Winemaker Trials

Comparing Composite Alternatives to Natural Cork Closures Scot Covington, like most winemakers, wondered just what sensory and aging comparisons would be found in 2014 Russian River Chardonnay bottles topped with natural and composite corks opened after a year in the bottle.

Michael S. Lasky Michael S. Lasky is the former editor of AppellationAmerica.com and is the author of hundreds of articles for national magazines and newspapers.

a more in-depth examination of a winemaker’s trial poured at a recent Innovation + Quality (IQ) conference, examining what led to the creation of the experiment and the knowledge the winemakers took away from the end results.

For more information on IQ and the trials poured at the event, visit www.winebusinessiq.com.

E AC H MON T H , W BM F E AT U R E S

Winery: Trione Vineyards & Winery Winemaker: Scot Covington Trial Objective: To evaluate the differences in using composite cork versus natural cork after one year in bottle, looking particularly at mechanic properties of the closures and the organoleptic comparisons.

Summary: After one year in the bottle, slight, if any, differences were found in sensory comparisons by professionals and consumers.

How the trial was conducted: We bottled 2014 Russian River Chardonnay on a standard mobile bottling line using a total of 1,000 corks distributed in varying quantities of natural corks, Diam 5 closures and Ganau UNIQ closures. When we were running the bottling line, I would stop the line and put a bag of one lot’s corks on and keep those separate. Then I ran the other corks, again keeping them separate, and continued the process the same way with the third lot.

Lot 1: Xiberta I-cork Flor 49mm x 24mm (Natural) Lot 2: Diam 5 47mm x 23.5mm Lot 3: Ganau UNIQ 49mm x 24 mm After one year in bottle, the trial set of three lots were opened, and we performed a sensory analysis in-house and in an informal test with attendees at Wine Business Monthly’s 2017 Innovation + Quality trials tasting.

Conclusion: I didn’t think consumers were going to detect differences among the lots, and IQ attendees were all over the map. Some thought one lot was a little bit more open while others thought the same lot was a little tighter. As a winemaker, this did not change my position. I think the technical corks have a part in the overall wine production. Natural cork has its part too. I think there are going to be winemakers who will use both of them in their wine production. Price is going to drive which cork is ultimately chosen. That’s going to be competitive. There’s going to be people that still love a natural cork and will pay more for them. If we were just going by cost, I wouldn’t use natural cork. As a winemaker in the business for a long time, I like natural cork in its practice, in the way people perceive it. There will always be a place for it but, in the end, it’s going to be driven by price.

ANALYSIS NAME

LOT 1

LOT 2

LOT 3

UNITS

total sulfur dioxide

77

85

81

mg/L

titratable acidity

6.2

6.2

6.2

g/L

pH

3.4

3.4

3.41

molecular sulfur dioxide

0.33

0.45

0.37

mg/L

free sulfur dioxide

13

18

15

mg/L

ethanol at 60° F

14.38

14.38

14.37

% vol

ethanol at 20° C

14.43

14.43

14.42

% vol

volatile acidity(acetic)

0.45

0.45

0.45

g/L

ETS LABORATORIES

28 July 2017 WBM

Submit a wine trial to winetrials@winebusiness.com

Winemaker’s Postmortem: Why this trial?

I have been using a couple of different manufacturers of natural cork since I first started as winemaker at Trione in 2005. But previous to Trione, I did a lot of work with natural cork at other wineries. It’s always a thing that’s on your mind as a winemaker. I like natural cork myself and am familiar with the creation of the Cork Quality Council but still have always looked at natural cork alternatives. I have used Diam, Versa and Ganau for different wines, but when Ganau came to me and said, “Hey, we’ve got this alternative, a technical cork that is similar to Diam,” I said, “Okay. I’ll try it,” and that led to this trial.

What were the sensory results after each lot was one year in bottle?

®

There was a slight difference, with the natural cork being a little bit more open in both instances. But I don’t think consumers are going to even notice.

Superior protection against oxidation

From the results, what have you learned and how will you use this knowledge in future wine blending?

I’m going to use the Ganau technical cork more going forward. I like their technical cork, and at its price point it’s going to fit my budget. Of course, I like natural cork too, and it serves a purpose, particularly with our higher-end wines. For me, it comes down to the price point of the cork I will use for most of my bottling. So, let me phrase this not as any sort of brand promotion but as my experience and preference as a winemaker: My experience with Ganau corks has been good. Corks are a competitive business; so if I am satisfied with their performance, my choice comes down to price point. The Ganau corks don’t perform any better than Diam’s.

What, if anything, would you do differently after this trial?

I wouldn’t change my winemaking regimen. I did open my eyes a little bit to the perception of natural cork with consumers. It’s such a small characteristic that I think I would use natural cork for our top-tier wine, and I would use technical cork for anything else. I have confidence that it would age properly, or it would maintain the varietal characteristics after it has left the winery moving forward.

The trial was also duplicated simultaneously with 2014 Russian River Valley Pinot Noir opened after one year of bottle-aging. Sensory results are, so far, the same with the three Pinot lots as they were with the Chardonnay. WBM

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WBM July 2017 29

winemaking

Closure News: S I N C E T H E B E G I N N I N G O F the year, a number of closure companies have released new products or announced changes to their processes. What follows is a review of some of the developments from these suppliers.

Nomacorc Switching Global Production to Plant-based Polymers NO LONGER A “PETROLEUM-BASED” PRODUCT Nomacorc, which first introduced closures made with biopolymers

derived from sugarcane as a line extension back in 2013, is in the process of switching all of its production of synthetic closures to plant-based polymers and expects to complete the switch-over in about a year.

The closures are still made from a polyethylene but are now derived from alcohol that is fermented from sugar cane. The bio-based polymer has a lower carbon footprint. The Green Line is produced using renewable energy and is fully recyclable. The manufacturing process hasn’t changed much but the raw material has. The ‘Green Line’ includes chamfered edges and embossed ends that are now standard.

“We made a conscious strategic decision to convert all of our petroleum-based closures to plant-based closures derived from sugar cane,” business development manager Mark Coleman told Wine Business Monthly.

“We want to change the narrative from ‘synthetic cork’ to ‘PlantCorc’. We want to change it from, ‘These are entry-level closures,” to ‘Technology has changed and these are suited for premium wines.’”

30 July 2017 WBM

Nomacorc sells roughly 850 million closures each year in the U.S. market and has delivered about 200 million of the new plant-based closures thus far.

Coleman said 80 percent of Nomacorc’s U.S. customers have already changed over, with a couple of large volume accounts still in the process of evaluating the new closures. He said Nomacorc has been upgrading key accounts cost neutrally, though the new closures cost more to produce.

Cork Supply Group Introduces VINC, a New Line of Micro-Agglomerated Corks

Cork Supply Group (CSG) launched VINC, a new line of TCA-taint free

(releasable TCA less than or equal to 0.5 ng/L), micro-agglomerated corks with a range of very low oxygen transfer rates. Every VINC cork is evaluated for TCA not by lot, but on an individual basis, cork by cork.

This is a result of the VAPEX process, created by the Cork Supply research and development team. It is a batch cleaning process that reduces TCA on cork granules through effective mass and heat transfer.

VINC is the first new product line to be launched from the company’s dedicated technical cork facility, Cork Supply Portugal 4 (CSP4), which is operated by executive director, Antonio Bastos and production supervisor, Manuel Antonio Ferreira. It offers three closures with varying OTRs: VINC with granules sized 0.5 to 2 mm and an oxygen transfer rate of 0.002 cc per day; VINC + with granules sized 0.5 to 1 mm and an oxygen transfer rate of 0.0017 cc per day; and VINC Cuvée for sparkling wines with granules from 0.5 to 2 mm.

“The VINC product line is the result of the work of our focused research and development team,” says Jochen Michalski, CSG’s founder. “We opened CSP4 last year to be able to offer taint free, best-in-class micro-agglomerated corks produced from 100 percent of our own high quality raw cork materials.

As Cork Supply integrates rigorous quality controls during harvesting and production of our natural corks, all remaining cork materials from that production are of very high quality.”

Diam Bouchage Launches Entirely Plant-based Origine As part of its efforts to become a more sustainable company with environmentally friendly products, Diam launched Origine, an agglomerated cork closure made from natural cork, beeswax emulsion and 100 percent organic vegetable polyols. Rather than use a traditional polyurethane binder, the combination of bee by-product and vegetable polyols ensures that the closure is entirely plant-based. This new technology is the result of research combining permeability and natural ingredients, and it responds to the demand from premium customers to create more open permeability closures that maintain the long life needed for aging wines.

“The use of beeswax reflects our company’s commitment to green practices and products,” said Francois Margot, sales manager for Diam North America, Japan and China.

He added, “It is also reflected in the name we chose, Origine by Diam.

Pollination performed by honeybees is the basis of the biodiversity of our planet. With oxygen, it is the origin(e) of the life cycle of our cork oaks, and thus, our closures. This is why Diam Bouchage is also contributing money to support critical habitats for bees by sponsoring hives in different French wine regions to help build and sustain bee populations.”

The oxygen transmission rates and length of time closures are guaranteed for will not be affected by the new products. Origine is currently available for the Diam 10 and Diam 30 lines, though it will be extended to other products in the future. All corks are guaranteed TCA-taint free (less than the limit of quantification of 0.3 ng/l). WBM

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WBM July 2017 31

winemaking

Winemaker Roundtable:

Horror Stories

Winemakers tell the haunted tales of harvests gone wrong and their rather creative solutions to the problems.

Lance Cutler

Lance Cutler has been a working winemaker in Sonoma Valley for 40 years. He has been a contributing editor for Wine Business Monthly for more than 13 years. His unique perspective on winemaking has led to our Industry Roundtable series and our Varietal Focus series. Lance is also the author of six books including The Tequila Lover’s Guide to Mexico and Mezcal.

make wine know that the work is difficult and that it takes planning to do the job right. Still, it doesn’t matter how much experience you have or how conscientious you are about planning—some things will likely go wrong. It is how we deal with things when they go horribly wrong that helps define us as winemakers. Wine Business Monthly thought the time was overdue to ask winemakers for their “horror stories.” Here is a batch to which any winemaker can relate.

Jerry Seps from Storybook Mountain Vineyards was brief, “Not much here, aside from the year I cut my finger off in the stemmer/crusher. Great body that year.”

ALL OF US WHO

Car Troubles Sometimes things can go wrong even before you start. Steve Edmunds remembers his very first Edmunds St. John harvest in 1985. “I was buying 9 tons of Syrah grapes from Estrella River Vineyards in Paso Robles. I’d made wine as a home winemaker for a number of years but never more than about a half-ton of grapes, so I didn’t even know what 9 tons looked like. We rented a couple of trucks and drove down to Paso on a Saturday. We left Berkeley at 8 a.m. with my stepson driving one truck and me and my wife in the other.

32 July 2017 WBM

Steve Edmunds

“We exited the off-ramp in Paso, and my stepson pushed the clutch pedal down to the floor, and it never came back up. We pulled over to the side of the road and saw that the cotter pin that held the clutch pedal in place had sheared off. I was able to reach the rental agency, but we were stuck there for hours waiting for someone to come fix the truck. We didn’t get to the vineyard until 4 p.m. We picked up the grapes and gassed up the truck at the vineyard because they had a gas pump.

“We started back to the winery, but my truck started acting up and wouldn’t go much faster than 40 mph. I figured that it was loaded with 4 to 5 tons of grapes so that might have been the issue. Once I got to the highway, it started to sputter, and I had to pull over. I waited a bit and tried again. It started right up but just wouldn’t go above 45 mph. In the meantime my stepson took off because he wanted to go out that night, so he headed up to Berkeley in the other truck. This thing kept happening. The truck would go for a little ways; then it would sputter and stop.

“After the third time, I figured I needed to get ahold of someone to find out what was wrong. It was getting dark, but my wife stayed in the truck, and I tried to hitchhike to a truck stop we had passed. Someone came by, and it was someone who had purchased grapes from the same vineyard. He drove me up to the truck stop. Fortunately, the people at the truck stop said they had a guy who would come look at the truck for $150. I waited a while, and this guy showed up in a pick-up truck.

“He was a really nice guy, and he took me back to the truck but had to drive carefully because he didn’t have a driver’s license. When I asked why he didn’t have a license, he told me it had been taken away for drunk driving. We finally made it back to the truck. He tried starting the truck, but it wouldn’t start. He asked if we had filled the tank, and I said, ‘Yeah.’

[The] first flat-bed, loaded with 10 tons of grapes, rolled down the slight incline, smashed into the front of the truck and pushed the second flatbed about 4 feet.

It slammed into the crusher, ripped it right out of the ground and made a mess out of all the transfer pipes.

“He asked, ‘Did you ventilate it?’ I didn’t even know what that was.

“He went over, unscrewed the gas cap, relieved the pressure, and once that was done, the truck started right up. We drove off and didn’t get home until 1:00 or 1:30 in the morning. I woke up the guy who lived at the winery. He got the forklift, and we put the bins in the winery. I went home and got about four hours of sleep. Then we came back down and started crushing grapes.

That was my initial foray into owning a winery.”

Late one harvest evening Jim Bundschu, owner of Gundlach Bundschu Winery, returned from delivering grapes only to discover he had a flat tire. After a long harvest day, he dragged himself from the truck and changed the tire.

He flipped the flat tire up into the empty grape gondola and figured he’d drop it off to get fixed the next morning.

The next morning came early, and Bundschu was out supervising his picking crew as they Jim Bundschu harvested Chardonnay for Sebastiani Vineyards and Winery. After another long, exhausting day, he drove the truck to Sebastiani and sat in line with the other growers, waiting for his turn at the crusher. It was mostly local growers in those days, so they would stand together, watching the grapes be crushed and talk about harvest, growing up in the valley as kids and discussing where they could go for a beer when they were done. Finally it was Bundschu’s turn. They tipped the 4-ton gondola.

The grapes spilled out, and there on top sat the flat tire, rim and all. Bundschu says he was teased about that for years.

The late Tracy Toovey was working as cellar master for Grand Cru Vineyards. They were receiving grapes in 2-ton gondolas anchored five to each flat-bed truck. A driver showed up with a set of doubles. He parked the first set on the pavement just above the crush pad, disconnected and backed the second set down to be crushed.

Evidently, the driver forgot to set the brakes on the first flat-bed. While Toovey ran the crusher, that first flat-bed, loaded with 10 tons of grapes, rolled down the slight incline, smashed into the front of the truck and pushed the second flatbed about 4 feet. It slammed into the crusher, ripped it right out of the ground and made a mess out of all the transfer pipes. It took three days to repair the damage before they could again accept grapes.

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WBM July 2017 33

Winemaker Roundtable: Horror Stories

Chuy Ordaz TOMSANDERSPHOTO.COM

Grower Relations Gone Wrong Chuy Ordaz, who owns Palo Alto Vineyard Management, was in charge of all the picking crews for Kenwood Vineyards. In 1973, a grower needed

some help picking grapes, and it turned into a dangerous situation. Chuy explained what happened: “This grower needed help for harvest, so he called Mike Lee and asked if we could help him. Mike asked me to take a crew over and help him out.

My crew had some small guys from Oaxaca. One guy left a couple bunches of grapes on a vine. The grower, who was big and tall, got really mad, and he came up and picked up this little guy by the shirt and carried him back to show him the grape bunches left on the vine. When he did that, he really got my crew angry, and they told me they didn’t want to pick grapes for this guy.

And they stopped picking.

“When they stopped picking, it really made the grower mad, and he started yelling. I told him, ‘You can’t treat my guys like that. You’re going to get yourself in trouble. Do you realize how many people I’ve got working here?’

That made him even more angry, and he stormed into his house.

“I went up and talked to him again. I told him if he wasn’t careful, these guys could kill him. Every one of my pickers had a knife, and the grower was big, but to do something like that pissed everyone off. I tried to control the guys. I think I had 16 guys, and they were really mad at what he did. The grower finally cooled down and came over and apologized. He really didn’t have a choice. What he did was pretty bad.

“I was kind of in the middle. This grower didn’t realize that what he had done was a big insult. I mean, it was just a couple bunches of grapes, less than 1 pound. I don’t know why he was so pissed off, but my guys were really mad.

Since then, that grower really changed. Whenever he saw me, he’d come up and say hi, and he was always friendly after that.”

34 July 2017 WBM

John Batto’s Cabernet Sauvignon vineyard out by the Sonoma County

airport was always one of the last vineyards picked. Slow-ripening, it was usually picked below 24° Brix and made lovely, well-balanced wines, winning the sweepstakes award at the Sonoma County Harvest Fair in 1983. Because the grapes were harvested so late in the season, getting pickers always posed a problem. One year Batto hired some guy to round up a crew. They showed up, buckets in hand, and set about picking the crop.

They finished up, and Batto brought them the traditional case of beer for the end of harvest. He tallied up the number of buckets from each picker and paid them accordingly. He took off to deliver his grapes to the winery. Since it was the end of harvest, the pickers left the buckets since they no longer needed them. It wasn’t until all the beer had been drunk and all of the pickers had left that Batto, upon his return, realized that the top 2 inches of each bucket had been cut off. He figured he had overpaid almost 10 percent to the pickers because each bucket, while full, carried fewer grapes than normal.

Some Rather Creative Solutions Zeke Neeley, currently winemaker for Kenwood Vineyards, recalled an incident that proves a good mechanic is worth his weight in gold: “I think it was in 2012: we had a destemmer that was an old model... obsolete. Late one Friday night (why does it always have to be late at night?), while halfway through a lot of Napa Cabernet, it started grinding out smoke, so we opened it up. Our maintenance supervisor figured out that the bearing cup that holds the shaft inside the destemmer had seized up, and the bearings were all ground to dust. This destemmer had been made by a company that went bankrupt, so there wasn’t an actual distributor to call, just a dealer who bought their inventory when they went under.

“Our maintenance supervisor, Richard DeGarmo, knew the guy’s home number and called to ask if we could get another bearing cup.

I can’t recall the exact conversation, but the dealer said something to the effect of, ‘I don’t have that part here, but we can FedEx it from Europe, and it will get here next week.’ That wasn’t going to help us much since we had all that Cab sitting on the crushpad and picks lined up for the next Zeke Neeley morning, Monday and Tuesday. We called around to see if we could rent a mobile destemmer unit, but it was the middle of harvest, and we weren’t having any luck. The winery I worked for was 100 percent estate, which meant we couldn’t send fruit to an outside facility for processing; everything had to be done on-site.

“Meanwhile Richard had been looking around for something to make the machine work when he glanced at his desk. Many oak barrels are delivered with little oak bungs hammered into the bunghole to keep dust and rodents out of the barrels during transport. Richard had a couple on his desk and noticed that they were roughly the size of the bearing cup. He took one back to his woodshop, shaped it and drilled out the center until it was the exact shape of the broken bearing cup. He greased it up, put it in the destemmer and then fired it up. The thing worked like a charm. It even had the pleasant side-effect of smelling like a toasting barrel as the destemmer heated that cup up.

“It wasn’t going to last forever, but I believe we made it through that fruit and one more full day of harvest before the actual bearing cup finally arrived early the next week. That is one of those stories that reminds me that you can never give up during harvest. There is always a way to make it work.”

Charlie Tolbert Charlie Tolbert told a story about the first time he made late harvest Riesling with Dick Arrowood at Chateau St. Jean:

“The incident that comes to mind is in the early days of Chateau St. Jean.

Dick wanted to crush TBA (totally Botrytis affected) White Riesling. It came in really late in the evening because it’s such a laborious pick. It was tipped

WBM July 2017 35

Winemaker Roundtable: Horror Stories

into the hopper, spores flying into the air, through the crusher; and when it hit the Art Rafanelli must pump...thud—and that thing would pump bowling balls. These grapes had no moisture. They were nearly 40° Brix. It was hard to really tell because the hydrometer would float to wherever it was placed. The juice was that thick. It was like trying to pump oatmeal.

“My memory is trying to unclog the must pump at 11:30 p.m., armpit deep in the 40° Brix mush. All the while Dick was insisting we weren’t to put any water in it. It was a long, sticky night. This stuff was never going to pump. We did learn it made much more sense to place the grapes directly in the press and take the better part of a day to press it out.”

“Harvest Brain” Something all of us winemakers know about is exhaustion. Day after day of long hours of physical work and stress can take a toll on our ability to think straight. Sam Bilbro of Idlewild Wines told a story about how trying to make things easier backfired on him.

“My typical harvest starts off pretty hectic because I am very frontloaded making whites and Rosé. I tend to get over half of my fruit in the first two weeks of harvest. This last 2016 harvest was very hectic and very busy, and I had

36 July 2017 WBM

Sam Bilbro

this tank of Rosé that was a little fuller than normal. It was maybe 8° to 10° Brix and just starting to slow down. I usually want to give a little stir and get everything up in suspension to keep it going. I don’t do a cold and slow ferment. It is all native yeast ferment, and I don’t add nutrients either. So I usually circulate the tank to keep it up and moving quickly to get it to finish.

“I was really tired and short on time and short on energy, so I thought I would get really smart, and instead of circulating my tank the normal way, which involved getting a pump and setting up hoses and cleaning everything up when I’m done, I’d just add a scoop of dry ice. It would sink to the bottom, bubble up and mix it all in, and I wouldn’t even have to think about it. It was tired brain and tired body trying to think. I climbed up on the ladder; and as I dropped in the scoop of dry ice, I literally realized, ‘Oh no, what did I just do?’

“I scrambled down the ladder, as fast as I could, because I realized it was about to explode from all of the CO2 in the tank. Half-way down the ladder there was an absolute explosion of Rosé bouncing off the lid and spraying like a shower everywhere. In the end, I only lost about 15 gallons of wine, but I was drenched, and Rosé was everywhere. I had to run to the tank with a bucket and relieve the pressure off the bottom of the tank so I wouldn’t lose more wine. I’ve over-filled barrels before, but this was like 10 times more powerful. It was a complete Rosé shower.

“It was one of those things where you try to be smart, when you are way too tired physically and mentally. Instead of doing the thing that you always do that you know works, you try to get creative and try something new. By the time I washed everything down and squeegeed the floors, I probably lost an extra hour of labor, along with 15 gallons of Rosé. That one definitely bit me in the ass.”

Equipment Struggles Forklifts are dangerous and prone to accidents. Lance Silver, owner of Tobin James Winery, told of how he used a forklift as a job interview.

“Back when we were first starting out, we were a small, three-person operation. My family was living at the winery. There was an early Sunday morning delivery, and we were bottling on Monday, so I didn’t want to turn it away. I jumped out of bed and got on the forklift, but I was a bit rusty with my forklift skills. I unloaded the truck; and as I was saying goodbye to the driver, I forgot to Lance Silver put the mast down on the forklift. I drove it straight into the roll-up door, denting it in half.

“I didn’t know what to do. In those days Paso Robles was a one-horse town.

No one was working on Sunday. I couldn’t close the door. I figured I was going to have to sleep in the winery to keep guard. Then I remembered that our general manager’s husband, who was between jobs, was a Mr. Fix-it guy.

I called him, and he showed up with a crowbar and a hammer, and somehow got the door down and locked. It was so amazing that I offered him a job.

That was 18 years ago, and he is still with us.”

Marcelo Hernandez was the vineyard manager for Gundlach Bundschu for more than 20 years; but before he took on that responsibility, he worked in the cellar. One evening, when I was working as a cellar rat for Gundlach Bundschu, we were emptying a 5,000-gallon tank of Zinfandel. Emptying a tank was a three-man job: one shoveled, one ran the pump, and the third handled the end of the pipe to fill the press. Unfortunately, the owner/winemaker left for a social engagement, so it was just me and Marcelo.

Normally, one guy would shovel grapes while another would turn the pump on and off as it filled up with grapes. The third man would slide the 6-inch PVC pipe we had rigged with an elbow from side to side, filling the press. Since there were only two of us, I climbed into the tank with the shovel.

I leaned far through the manhole, signaled Marcelo and strained to turn on the Ministrine pump. I folded myself back into the tank and shoveled pomace for all I was worth, trying to limit the amount of air in the 6-inch hose.

No matter how fast I shoveled, there was no way to keep up with a Ministrine pump with a 6-inch line. At Marcelo’s end, grapes would flow out and then stop and then flow again. Then the grapes stopped coming out.

Marcelo figured I was taking a quick break, but I was shoveling pomace like mad. I could not see Marcelo while I was inside the tank. Finally, over the loud, grinding noise of the pump, I made out some screaming. Marcelo had figured out that grapes were plugged in the hose and was yelling for me to stop shoveling.

I stopped and looked out the racking door just in time to see the plug of grapes in the hose break loose. While Marcelo hung onto the PVC pipe for dear life, the pressure lifted him off the ground. The PVC elbow shot off, and a stream of grape pomace exploded from the hose, blasting all the way to the ceiling. The PVC pipe had a mind of its own and swung in an arc, carrying Marcelo with it. We ended up with a wide stripe of purple pomace going up the wall of the winery and extending across the ceiling for 20 feet.

Stained purple, that stripe remained tattooed on the ceiling for almost two years before fading away.

Barrels are a critical component in making fine wine, especially red wine.

Winemakers are familiar with the intoxicating, toasty, vanilla aromas filling

the air when opening a container of new barrels. Zeke Neeley discovered something else: “Five or six years ago we had about 32 barrels come in from a small cooperage in France. Because of all the things that can happen to barrels during transport, I make sure the guys take the time to inspect every barrel as they unload. Usually, the problems we run into are an occasional end-piece broken off a stave or a crack at the bung hole. This time they called me down to the loading dock because the barrels had lost their hoops.

“Apparently, back in France, the cooper was getting complaints from French winemakers that the hoop nails were catching on their pants when they handled the barrels and causing unsightly tears, so the cooperage eliminated the nails and just hammered the hoops on snug. I guess this is fine if you are just shipping to a neighboring part of France; but if you happen to ship through the Panama canal and let containers sit on a dock in Oakland for a month, the oak will dry out and shrink a bit, and you end up with a container with a bunch of hoops on the floor. The cooperage’s rep was very apologetic and came out to hammer them back on himself. So it wasn’t catastrophic, just a new one for me.”

Once wine is made, we would figure things were pretty safe, but Jeff McBride of McBride Consulting told us a story about the laws of thermodynamics that he learned while working at Kenwood Vineyards: “We had a 3,500-gallon tank filled with Chenin Blanc that was going through cold stabilization. We had just mixed up a 130° F batter of bentonite clay in a slurry to add to the wine for heat stability. We hooked up to a centrifugal pump, went in through the racking valve and went back out through the bottom transfer valve. The lid on the tank was not bolted down, but it was

WBM July 2017 37

Winemaker Roundtable: Horror Stories

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sitting there loose. I was up the ladder and told them to start adding the bentonite.

Chenin Blanc holds an incredible amount of CO2. As soon as we shot some of that hot bentonite into the tank, foam started rising. I immediately came down the ladder, shouting for them to stop pumping.

The hot bentonite displaced all of that CO2.

It blew the lid open and started a waterfall of Chenin Blanc cascading all the way to the floor. I dove under the waterfall and shut off the valve, but that little bit was Jeff McBride enough to fill up the whole tank aisle with Chenin. It looked like at least 1,000 gallons of wine and foam, but turned out to be less than 200 gallons. So: Do not mix hot bentonite into a cold tank of Chenin Blanc with high CO2.

“Another time I had to re-learn the law of gravity and pressure. The old Kenwood was a two-story winery. I was racking red wine up on the second story. When I finished, I hooked up a water hose to the line to chase the wine up to the tank. I was standing there tasting, waiting for the water, but it never came. We didn’t have check valves on the water line at the time. Meanwhile the water line started siphoning red wine. It ran through the water line all the way to the gardener out in front of the winery, who was watering the plants.

Red wine started coming out of his hose. He didn’t know what to do, so he tried pinching the hose, but it didn’t work. He must have thought he was Jesus Christ turning water into wine. After that day, we put check valves on all of the water lines.”

Party Fouls Lance Silver told a story of how a PG&E disaster turned into something special.

“The Zinfandel Festival Party is our biggest event of the year. It is a two-day event attended by 1,500 people each night. Three months prior to the party, which takes place in March, they were widening the highway in front of the winery. PG&E needed to move some power poles to make the stretch across the highway, and they put in a temporary line during construction. The supervisor putting in that line didn’t bother to look across the street and see our winery, which uses 480 amps of power. We didn’t know it, but they put in a temporary 120-amp line. December, January and February went by, and we didn’t use much power in those months—as is the case for most wineries.

“When our big event came, which had tents with all kinds of lighting, refrigeration, four bands with amplified music, ovens and stoves, it created a ridiculous draw of electricity. The party started on Friday night, and the line actually melted, landed on the property where the party was taking place and proceeded to set the fence on fire and started igniting one oleander bush after another. The bushes went up in a burst of flame that looked like fireworks. I was in one of the tents when everything went dark. People started shouting, ‘Oh, look, they are shooting off fireworks.’

“I was in charge of the entire operation, and I didn’t hire anyone to do fireworks. So, I ran out of the tent and watched as the fence went up in flames. We had a fantastic group of security made up of off-duty police and firemen, and they jumped into action. They immediately caution-taped the dangerous area while everyone left the pitch-black tents and watched the fireworks show.

“Unfortunately, we had an over-zealous police lieutenant, who insisted that we evacuate. He pushed people out the door and into the parking lot, and 600 of the 1,500 people left before I realized what was happening. I cried

38 July 2017 WBM

out to him, ‘What are you doing? Everybody is safe. Security has taken care of the situation.’ Both the police chief and the fire chief were at the event as customers. They stopped the evacuation and explained that the situation was under control. PG&E was on the way, so we moved the remaining people to a safe area. We evacuated one tent, and we re-directed the working lights in the parking lot into the second tent. The bands all came outside and started playing acoustically all around the parking lot. The chefs put their food on trays and brought it out to the people. The remaining people had the time of their lives. They thought it was the best party ever.

“The fallout came when the 600 people who were evacuated found out that they could have stayed and that they missed a great party. They all wanted to come the next night, but we were already sold out. That was difficult dealing with 600 people who got cheated. That cost us and PG&E free tickets for the next year.”

Back in the late 1970s and early 1980s, harvest parties were private affairs just for cellar rats. Kenwood Vineyards always had one of the best harvest parties, and they would generously invite most of the cellar rats throughout the valley. (There weren’t more than about 20 of us at the time.)

Chuy Ordaz and his crew would cook birria, and it made for a great finish to harvest. Someone at Kenwood recognized that these parties were great fun and could be a great marketing tool. So they decided to invite family members, growers, key customers, wine writers and other assorted hangers-on. Kenwood’s 1983 harvest party was special. Steve Sullivan, who worked at Kenwood for 12 years and is now the partner of StaVin Inc. and Safe Harbor, will never forget what happened at that party.

“The guest list got away from people. Before we knew it, there were more than 250 people in attendance. The food was great. The beer and wine flowed freely. We even had a mariachi band. People danced and laughed and carried on. It was a great party, and everyone was thrilled it had gone off so well. The next day a group of us went back to the winery to clean up. We got everything straightened up and put away; and because the birria was so good, we decided to chow down on leftovers. So we had another great meal, some cold beers and a few bottles of wine.

“That night I got deathly ill, worshipping at the porcelain god for nine or 10 hours. I thought I was going to die or at least cough up a lung. Mike Lee called me up and asked how I was feeling. I told him I was dying, and he admitted he was too. He told me that his phone was ringing off the hook. Of the 250 people at the party, about 150 of them had gotten sick. Six to eight of them had gone to the emergency room. Even people who didn’t eat meat had gotten sick. It turned out that someone had brought special chili peppers up from Mexico, and they were somehow contaminated, so the salsas and the molés were all causing trouble.

“We talked about sending apology letters but decided that was not a good idea, so we came up with the idea of a T-shirt. The T-shirt depicted a mariachi band and revelers and said, ‘I survived the Kenwood Harvest Party.’ We made sure that everyone in attendance got one of those shirts.”

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for a living, then you know that every stage of production is fraught with danger. Things can and will go wrong when you least expect them. The first thing for a winemaker to do is work your way around the problem. The second thing to do is laugh about it. Finally, you have a responsibility to turn it into a good story and tell it to others. WBM

IF YOU MAKE WINE

EDITOR’S NOTE: This article has some pretty good stories. I am certain that hundreds of other winemakers have dozens of stories just as good. If you have a tale that would interest our readers, try contacting our writer at lctoon@ winepatrol.com.

WBM July 2017 39

winemaking

Checklist:

Getting the Crush Pad Ready to Receive Grapes Curtis Phillips Curtis Phillips, an editor for Wine Business Monthly since 2000, is a graduate of UC Davis, and has been a winemaker since 1984 and an agricultural consultant since 1979.

T H E T I M E T O S T A R T preparing for harvest is immediately after the previous one. I like to conduct a “post-mortem” as soon after harvest as possible. Part of my usual routine is to go through the winery’s crush equipment and note anything that is broken or otherwise in need of replacement.

This gives the winemaker as much time as possible to budget, and shop, for any new or replacement crush equipment. One doesn’t want to be panicking about the broken must pump and the torn press bladder discovered while cleaning the winery the day before receiving grapes.

I’ve put together a short checklist for getting a winery ready for harvest.

I’ve found in my consulting business that I have to note when during the year particular items on the checklist are relevant. If I don’t, I have found that everything gets put off until the week, or in some cases until the day, before grapes are due to arrive at the scales.

I tend to focus on making the operation of the winery as smooth as possible.

This checklist does not focus on introducing or trying new winemaking techniques. I assume that the winemaker is quite capable of deciding what he or she wants to do. I am merely providing a quick memory aid. For example, I have “Preliminary Barrel (BBL) Order” listed under Spring in the checklist.

This is simply a reminder that the earlier one tells the barrel vendors what barrels the winery is going to want for next harvest, the easier it will be to get them. Last-minute orders are at the mercy of whatever is currently in-stock in the cooperages’ warehouses. The same goes for things like specialty yeast.

Except for unexpectedly big years, most yeast vendors have their workhorse yeast strains in stock right through harvest while the more esoteric strains may end up being sold-out well before harvest really begins.

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40 July 2017 WBM

This article first appeared in the June 2014 issue of WBM.

Right After Harvest • Conduct harvest post-mortem

The build-up to the next harvest starts as soon as the prior harvest starts to wind down. That is the time to sit down and review things. Perhaps the most important thing to keep in mind is that the purpose of a harvest postmortem (or review) is winery operations. Unless things clearly went wrong, like stuck fermentations, high VA or H2S production, any analysis of wine quality needs to be conducted separately.

I’ve seen many winemakers that only want to review their wines and don’t really want to think about winemaking from an operations management point of view. I contend that in most cases, problems in winery operations lead to reduced wine quality.

That load of grapes that sat in the sun for several hours, while the scale, hoist, destemmer or must-pump was repaired, often is also the one that ends up having high VA, a stuck fermentation or some other problem. However, this isn’t always the case. Some winemaking methods that are a logistical challenge—rack-and-return (delestage) comes to mind—but can also lead to greatly improved wine quality.

• Crush equipment inventory

Note any equipment that’s lost, broken or otherwise in need of replacement.

I like to conduct a thorough inventory of the crush equipment, especially the conveyors, destemmers, pumps, presses and such, about the same time I’m doing my post-harvest post-mortem. Part of the reason is to make sure you still have everything, of course, and sometimes loaned-out equipment is never returned, but it is also the time to decide if that old must pump needs to be replaced before next harvest. I’ve seen bad cases of getting overwhelmed by harvest. In one instance a winery forgot that one of its progressing cavity pumps had been jammed by an ingested trellis cross-arm and only noticed that they were short a must pump when they set up the receiving lines the week before grapes were due.

Getting the Crush Pad Ready to Receive Grapes CHART 1

Harvest Help Job Postings on Winejobs.com

220 210 200

2017

190

2016

180

2015

170

2014

160

2013

150

2012

140

2011

130

2010

120

2009

110

2008

100

2007

90 80 70 60 50 40 30 20 10 0 Jan SOURCE:

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

May 30, 2017. Winejobs.com

Hiring and Training Harvest Help Finding harvest help is another key component in getting a winery prepared for harvest. Winejobs.com, the wine industry’s leading online job site, has tracked the number of harvest help positions posted to the site since 2007.

Harvest help postings (not necessarily placements) start to rise in March and peak in July of each year. Wineries looking to get a head start on the harvest help search would do well to start looking in spring when there isn’t nearly as much competition. In August, just before the first harvest, job postings typically drop off as most wineries may have already found adequate picking staff.

To place a harvest help listing, visit Winejobs.com

Winter • Budget for and purchase any new, big-ticket, crush and lab equipment

Spring • Preliminary barrel (BBL) order

As noted above, this is a reminder that the earlier one tells the barrel vendors what barrels the winery is going to want for next harvest, the easier it will be to get them. Again, last-minute orders are at the mercy of whatever is currently in-stock in the cooperages’ warehouses. Obviously, a short crop means that it is easier to get the barrels you want while a big year means that the barrel vendors are more likely to run out of barrels, particularly if you’re looking for something other than an MT+ toast.

42 July 2017 WBM

• Barrels for trials

One should decide which barrel trials one is going to run when the barrel order is being first drawn up rather than waiting until wines are being barreled-down after fermentation.

Most, but by no means all, cooperages are happy to give a couple barrels to a winery for barrel trials as a gesture of goodwill if there is a potential for regular sales down the road. As one can probably guess, this sales-sample approach easily can be abused. I would not recommend relying on them for your trial since doing so puts your internal research at the mercy of the cooperage’s overstock. In any case, cooperages might give away a barrel or two as a pre-sale sample, but that is too few for a proper trial. At the least, I would recommend that any trial be conducted in triplicate with a minimum of three test barrels and three control barrels.

Veraison • Order yeast and ML inoculants • Order fermentation supplies (enzymes, oak, fining agents, rice hulls) • Throw out last year’s leftover rice hulls, oak chips (if more than 6 months old) • Restock winery laboratory supplies • Restock cleaning and sanitation supplies • Annual maintenance for all forklifts (lift-trucks) • Replace refractometers (at least every two to three years).

Veraison to the Month Before Harvest • Scale recertification (if needed) • Begin harvest safety training for new and temporary employees • Rent additional forklift for harvest (if needed) • Replace pH and NH^4+ probes in lab • Replace analytical enzymes for winery lab • Final check for all crush equipment to verify function and cleanliness.

One Month Before Harvest • Rent back-up hot-water pressure washer or steam generator • Disassemble and clean crush line, sumps, pumps, and presses • Check and adjust SO2 for all wines that will remain in-barrel during harvest.

One Week Before Harvest • Clean and sanitize harvest bins • Top all barrels • Clean and sanitize fermenters and press.

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One Day Before Harvest • Sanitize the entire crush line, from receiving hopper to fermenter.

Eliminate Single Points of Failure The failure of single pieces of equipment can spell disaster during harvest.

This is why I routinely rent stand-by forklifts, a hot water pressure washer and a generator. This becomes less necessary, as the winery gets larger, since larger wineries tend to have multiple units of any single type of equipment anyway. During crush, there should always be an available contingency should any piece of equipment break or should there be a power outage at the winery.

For example, in a very small winery, a supply of food-grade buckets, shovels, pitchforks and harvest bins are a viable contingency for a jammed must pump. As the winery size increases, however, a bucket-brigade solution becomes untenable, and it becomes increasingly necessary to have multiple must pumps on-hand to make sure that the winery can continue processing grapes even when a must pump gets jammed. WBM

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WBM July 2017 43

winemaking

Checklist:

Getting a Winery Lab Ready for Harvest The important lab analyses you should be conducting during harvest Curtis Phillips

Curtis Phillips, an editor for Wine Business Monthly since 2000, is a graduate of UC Davis, and has been a winemaker since 1984 and an agricultural consultant since 1979.

general pre-harvest checklist (see “Getting the Crush Pad Ready to Receive Grapes” on page 40), I have been thinking about the more specific problems of getting winery laboratories ready for crush. There are a few things, like replacing your pH probes, that you should be doing prior to harvest, but mostly I’ll be listing the analyses you should be doing during harvest. Since most of these analyses should be run on every lot of grapes, must or wine, some as frequently as every day, I generally recommend that every winery budget for an in-house lab or use an outside analytical lab. A poorly run or poorly equipped winery lab is worse than having no winery lab at all.

For the most part, I am not going to give detailed shopping lists for lab equipment. While every winery needs to do the same analyses for the most part, the particulars for outsourcing versus equipping an in-house lab, and which equipment any given winery should buy very much depends on the winery size, number of individual wine-lots, budget, space, ability and commitment of the winery. I could easily fill up my available space just talking about the various use-cases for equipping winery labs for something as simple as measuring Brix, pH and Titratable Acidity (TA).

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44 July 2017 WBM

This article first appeared in the July 2014 issue of WBM.

Density Meters I’m going to make an exception to this aversion for recommending individual pieces of equipment to mention density meters: I would put a top-end density meter on par with a spectrophotometer in importance for outfitting a winery laboratory.

Density meters, not to be confused with densitometers, are a particular class of equipment that is frequently overlooked when outfitting winery labs. As the name implies, a density meter measures the density (mass per volume) of a solution. If the solution is a simple one, ethanol in water, for example, the instrument can be used to determine the concentration of the solution. Note that measuring the density of an aqueous solution is highly dependent on the temperature, which means that the density meter needs to be able to measure and maintain the sample temperature with a high degree of accuracy.

Most of the beverage industry uses density meters to directly measure sugar and ethanol, but I think that most wineries think that they don’t really need high accuracy for those two measurements. As a consequence, until recently I haven’t seen many density meters outside of very large wine companies.

To me the real must-have reason to own a density meter is for standardizing solutions in the lab. Poor standardization of titrants is one of the primary sources of error in winery labs. The sodium hydroxide (NaOH) solution used in something as routine as a TA determination needs to be re-standardized every few hours for accurate results and ideally every single time the burette is refilled. Unfortunately, most wineries are lucky if they remember to re-standardize their solutions every day. Many will go weeks generating useless lab results before they remember to check the normality of their NaOH.

Getting a Winery Lab Ready for Harvest

Accuracy and Precision I came to winemaking from chemistry. As a consequence, I tend to prefer to do most routine analyses myself or in a winery lab under my supervision.

Note that this isn’t always a good approach for every winemaker. Routine juice, must and wine analyses are not particularly difficult, but they do require a fair bit of skill and an obsession with details to yield results that are both accurate and precise.

When referring to laboratory results, the terms accuracy and precision have very specific meanings: precision describes the repeatability of a particular analysis on a particular analyte (e.g., the thing being tested) at a particular point in time.

ACCURACY

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Accuracy refers to the agreement of a measurement to a true or correct value.

Somewhat perversely, accuracy by itself does not infer that the instrument or the analysis is good or even working for any single measurement.

If one were to think of the results of any particular analysis like a game of darts, then the accuracy of that analysis is the average number of “throws” at the board. A throw that is 3 inches to the left of the center can be offset by a throw that 3 inches to the right of the center; a throw that is 2 inches above the center is offset by one that is 2 inches below the center, and so on.

A set of a results can be scattered all over the place but still end up with an average that is “correct.” In such a case, the results would be “accurate but not precise.” The problem is that without analytical precision, there is no way of knowing if the next result is going to give you a correct result.

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Precision is usually thought of as “how many decimal places does the number go out to?” However, that only applies when you’re getting the same number every time. If your past results for a particular analysis are 10, 250, -172 and 48 then noting that the next one has a result of “94.005” is not adding precision: it’s completely useless. Precision “to three decimal places” is only relevant when that is only part of the number that differs as in a series of results like “45.003, 45.008, 45.002, 45.004.”

Precision is the repeatability of a particular analysis. One can think of precision as the “scatter of the darts” of a number of repeated measurements.

Thus a “tight pattern” is a more precise analysis. An analysis is considered less precise the further the results lie from each other. Perhaps the most difficult concept is that the precision of a result has nothing to do with the value of the result being close to the true or correct value. As we can see above, an analysis can be accurate, precise or, one would hope, both.

Restocking, Refurbishing and Training I start preparing a winery lab for harvest sometime around veraison. Often this means a little restocking of basic reagents and reorganization in the lab, but it is also a good time to replace ion probes (pH and ammonia) and enzymes. If the winery owners allow, I also like to hire my lab technicians early so that I don’t have to be training them in the middle of harvest.

& it all begins for your wines

Pre-harvest Sampling By pre-harvest, I mean which analyses should be conducted on any vineyard samples that come into the lab prior to harvest. I don’t pick “by the numbers,” especially if I control the vineyard, but I tend to watch the TA and pH more closely than the Brix. Note that free-run juice tends to have higher Brix and TA and a lower pH than “real” must. Coupled with the fact that humans tend not to take representative berry samples but instead inadvertently pick riper berries from more exposed clusters while sampling, this all leads to inaccurate pre-harvest analyses.

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REQUIRED ANALYSES

Every winery should conduct the following three analyses on every vineyard sample.

• Brix • Titratable Acidity (TA—AKA Total Acidity) • pH

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SUGGESTED ANALYSES

I have yet to see any conclusive research that directly links grape or juice phenolics with wine phenolics. Certainly, you can’t extract what isn’t in the grape to begin with, so one can assume that more is better, but we still can’t really predict what the wine phenolics will be like by measuring total phenols in the grape, except for specific varieties in vineyards we measure year-in, year-out. To this end, I like to periodically measure the following to get my technicians used to these analyses and to generate a library of year-on-year vineyard data.

• Total Phenol • Tannin

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WBM July 2017 47

Getting a Winery Lab Ready for Harvest

Pre-inoculation I take the following pre-inoculation measurements on every tank and every bin of must.

REQUIRED

• Temperature • Brix • TA • pH • Free SO2 • Total SO2 • VA • Free Amino Nitrogen (FAN) • Ammonia (NH3) • Yeast Assimilable Nitrogen (YAN) * YAN = FAN + NH3

These analyses are the ones I like to measure if I can; but if I have to triage my lab budget, I’ll dispense with doing them.

RECOMMENDED

• Color • Extract • Total Phenol • Anthocyanins • Tannin

Fermentation (and Cold-soak) I like to have the following daily analyses for every active fermentation in the winery. Note that I don’t cold-soak anything anymore, but the same would apply to any cold-soaking must. This list also applies to any musts undergoing malolactic fermentation.

REQUIRED DAILY

• Microscopy (identify what is fermenting) • Brix • pH • TA • VA • Malic Acid (during MLF)

RECOMMENDED (END OF FERMENTATION)

• Reducing Sugar • Ethanol • Glucose + Fructose • Malic Acid

Unexamined Lab Work is Not Worth Generating It’s one thing to take all these measurements, but any lab analyses are worse than useless if they are not reviewed and understood by the winemaker. This means that the winery has to have sufficient analytical muscle to get samples taken, analyzed and the results put into an easy-to-read format (graphed) in a timely fashion. There have been a few times when clients have hired me to troubleshoot a problem, and they have had the data all along. The “problem” was that the data were just numbers scribbled in a lab notebook or entered into a spreadsheet. Few people can look at raw numbers and see anything. A daily graph of a tank’s VA will set off alarm bells. WBM

48 July 2017 WBM

winemaking

What Wineries Need to Know Before Adding Distilled Spirits to Portfolios While producing distilled spirits can ultimately be a profitable addition to a winery’s portfolio, potential distillers might face high set-up costs and long, patiencedemanding barrel-aging periods before any profits materialize.

Michael S. Lasky Michael S. Lasky is the former editor of AppellationAmerica.com and is the author of hundreds of articles for national magazines and newspapers.

winery into distilling brandy, eau de vie, or brown spirits? Hundreds of wineries across the United States already have their distillation permits, but that’s no indication that any of them have actually started distilling yet. According to winemakers who have pioneered or recently invested in the distilling process, prospective distillers need two innate essentials to succeed: passion and patience.

To get a sense of what exactly is involved in adding distilling to an already established winery, Wine Business Monthly questioned a veteran distillation consultant and two California winemakers—one pioneer and one newcomer—about what, based on their experiences, potential distillers should anticipate before they start their own distilling operation. [Editor’s note: This article relates to those looking to start their own production of spirits.

It is possible to purchase pre-made spirits and label/brand it—though that requires a separate set of operations, licenses, etc.]

Scott Schiller, managing director of Chicago-based Thoroughbred Spirits Group, leads a diversified team of highly experienced distillation and marketing experts who advise clients on concept and product development, financial and business planning, branding and packaging design, distribution and sales, as well as distillery planning and marketing. Veteran winemaker/ distiller Marko Karakasevic is the 13th generation distiller at his family’s Charbay Winery and Distillery, which has been producing a variety of distilled spirits in Ukiah and brandies atop Spring Mountain in Napa Valley since the early 1980s. Relatively new to distilling, Dave Nichols, co-owner/ winemaker at Paso Robles’ Opolo Vineyards, started distilling in 2015. The 55,000-case winery’s first vintage was in 1999.

THINKING ABOUT MOVING YOUR

50 July 2017 WBM

The Timeline: The Long–and Expensive–Road to Distilling Success Having noticed the perpetually increasing sales of spirits (see T A B L E 1 ), Andrew Peller Limited, the largest independently owned winery in Canada, became intrigued about expanding the winery into distilling as well. The company asked distillery consultant Scott Schiller about the viability of the winery conglomerate moving into spirits production.

As Schiller remarked proudly this past April, “The Number 99 Distillery and Winery in Niagara-on-the-Lake just had their grand opening—but that was after about three years of work.” To get to this point Schiller asked the winery the probing questions any winery needs to explore itself.

“The first thing we ask is, what does success look like and why is it that you want to get into this segment of the business? Although the route to the spirits market has some similarities with the wine business, it is still quite

According to the winemaker distillers and spirit consultants WBM spoke with, here are the basic ingredients to create a successful distillation addition to a winery:

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Distilling 101: The Winemaker’s Recipe to Start a Distillation Business

1. Money: You will almost always need more than you originally estimated.

2. Real estate: Most, if not all, states require that distilling production be in a separate facility not physically connected to wine production.

Some states require distillation be in an industrial zone, not an agricultural one.

2. Patience for that ROI: It will take a minimum of two years before brandy sees its first release and much longer for whiskey. Other spirits, such as vodka and eau de vie, require at least six to eight months before release.

3. Licenses: Strict federal and state regulations require specific licenses for brandy production and brandy sales, as well as yet other licenses for all other distilled spirits.

4. Taxes: According to the Distilled Spirits Council of the United States, direct alcohol excise and sales taxes levied at the federal, state and local levels account for more than one-third of the shelf price of many popular brands. The government, at all levels, earns $2 from the sale of beer, wine and spirits for every $1 earned by producers, wholesalers and retailers.

5. Quality ingredients: Distillation concentrates the flavor and quality of whatever ingredient is used, so it is best that the winemaker personally approves the ingredients.

6. Education: Spirits distillation requires additional skills beyond those associated with winemaking.

7. Passion: You have got to love the process and the product to succeed.

different. We point out that normally most wineries are aligned with wine distributors, or wine divisions of distributors, and so switching over into a different division, and having to build out a new sales arm, is expensive,” Schiller said.

“Next, we ask the winery if this move to spirits production is meant to strengthen the existing wine brand or is this meant to be an entirely different division. Either way, the company must see they are, in theory, building something from scratch. Once we get past understanding what the real objective is, and define what success looks like, the next thing we do is go into a financial forecast and prepare the projections,” Schiller continued.

Schiller’s client then gets a dose of reality by looking at the hard numbers, the spreadsheets and cash-flow statements. He points out the financial commitment in order to make it and the timeline for that financial return (barrel-aged brandy, for example, takes a minimum of two years in wood before release to sales). “This gets to the main factor of go or no-go: You have a risk in that you’re an existing business, and so this being an extension has the ability to detract or distract from what you’re trying to build.

“Out of some of the wineries that we’ve spoken to, after they see it, a lot turn away and say, ‘You know what, it’s not worth the risk,’ or ‘This isn’t an

gwkent.com WBM July 2017 51

What Wineries Need to Know Before Adding Distilled Spirits to Portfolios area or level that we want to invest in.’ For the others that see a worthwhile investment, Thoroughbred moves on with brand development and laying out the distillery. Often it will fit within the current winery location or more often in a new building,” said Schiller.

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Dave Nichols says that he and his partner, co-owner and winemaker Rick Quinn, did their fair share of research, pre-planning and economic assessment before committing to expanding their Paso Robles winery to distillation. Despite that economic forecasting, the eventual costs exceeded what they anticipated in both time and money.

From the get-go, distilling seemed to make sense. “We’ve got all this stuff here from the winemaking process. We’ve got all this raw material that we can use to distill. We have a Serbian/Croatian ethnic theme that we do at the winery, and they drink Slivovitz, which is a plum brandy. We do a lot of lamb here at the winery. A lot of events centered on that kind of thing,” Nichols said.

“It was tied in, in part, with the European spirits thing. The Europeans drink a lot of the fruit brandies, the eau de vies. It played in with the theme of Opolo, and then also we had an interest in doing the whiskies and the liqueurs. It looked like it would make sense financially; and until we actually come out with everything we intend to sell, we’re still hoping for the best.”

You might think that it would be easy to cross-pollinate winemaking skills with distilling. Nichols admits that is really not the case. “We’ve done a lot of classes in distilled spirits processing, “ he said. “The financial side of things is yet to be determined. We’re hoping for a profitable outcome obviously, but it’s going to take a couple of years due to how long it takes to get started and barrel-age some of the spirits to see what consumers are willing to pay for which products.”

Although Opolo had the raw materials for many of its spirits, like any start-up distillery, it needed to invest in additional equipment specific to spirits production. “First, we bought a small still, basically an experimenter’s still, and then we bought a much larger still as we figured out more-or-less what we wanted to do. Then, even that wasn’t big enough, so we purchased what’s called a stripping still on top of that to make things more efficient,” Nichols said.

“We now have two large stills, and basically, they’re used in sequence.

First we use one; then we use the other. Then, we have also had to invest in more tanks, pumps, a boiler for the stills, cooling systems, barrels. You don’t really get to leverage the capital equipment from the winery. In fact, we’re not even relying on the used wine barrels. We are basically buying barrels based upon what we’re making. The one exception is some wine barrels used to age some whiskey.”

Then, of course, Nichols and Quinn knew they were going to have the expense of building and setting up a new, separate facility for two reasons.

“By law [in most states], the distilled spirits production has to be in a separate distilled spirits bonded area, which is different than the wine bonded area. The second reason is we needed more space as we had already outgrown our tasting room area. Fortunately, we had available space on our property to build a spirits area across the patio from our wine tasting room,” Nichols said.

Another cost consideration that might be overlooked, when planning a potential distillery, is the higher federal and state taxes imposed on distilled spirits and the domino effect they have when combined with the ultimate retail price imposed by the three-tier system.

The Silent Partners: The Government and the Three-Tier Distribution System As a veteran winemaker and distiller, Marko Karakasevic can certainly tell you the lowdown on government regulations, taxes and the complications of the mandatory three-tier distribution system. He has been dealing with it ever since his family began distilling in California in 1983 with alambic pot still brandy.

“The bureaucracy increases as you attach more licenses to your existing licenses. As a winery, you have your winery license, then depending on what you are distilling, there are a slew of other licenses,” Karakasevic explained.

“There are two licenses, a Brandy Distillery and a full-on Distilled Spirits Plant or D.S.P. The Brandy License is attached to a winery for making grapebased spirits to fortify wines at the winery.

“Here’s where it gets a bit complicated. Once you get your bonded winery, you can attach a brandy distillery onto that winery so that you can receive wine, distill it and fortify product. You can’t barrel-age brandy and then bottle it and call it brandy distilled right there because that’s not a full blown D.S.P. The brandy license is strictly for producing fortified wine. But for wineries that want to start distilling brandy out of grapes and barrel-aging and bottling and selling out of the winery, they must have a full blown D.S.P. License,” Karakasevic said.

“A D.S.P. entails a lot more paperwork. You’ve got more reports. You’ve got separate books, and you report transferring from this bond to that bond and transfers in bonds. The excise tax is exciting because wineries are used to paying about $0.14 per wine gallon. Now, in the world of distilled spirits and brandy, we pay $13.50 per proof gallon, which equates out to $2.14 a bottle of 80-proof distilled spirit. That’s a huge increase from what wineries are accustomed to, and that has to be added in to the final price the customer pays,” he said.

There is also the three-tier system to consider. After paying those taxes and the distributor and retailer adding on their cut, the consumer’s price has at least tripled. “Each license offers specific limitations. You can’t cherry-pick

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What Wineries Need to Know Before Adding Distilled Spirits to Portfolios

the benefits of different licenses. If you’re a D.S.P., you have to run D.S.P., which means you have to send your product to a distributor, the distributor has to ship it to the store, and that’s after you, the distiller, has paid the taxes for the particular spirit,” said Karakasevic.

The Product: It’s What You Start With Which Determines the Finish The numerous synonyms for the word distill focus on what the distilling process is all about—purifies, refines, condenses, concentrates, extracts— and as Karakasevic put it, “You have to love the taste and flavor of whatever you are going to distill.”

As he related, “You’ve got to make clean wine. Distillation is the concentration of alcohol and essential oils of the flavors of the wines you’re distilling. So if you’re distilling something that you don’t really like, you’re concentrating flavors of stuff that you don’t really like. So it’s in your best interest, I would imagine, to distill something that you really like.

“Charbay gets calls all the time from people that want me to custom-distill some wine that they don’t want anymore. If there is sulfur in it, I can’t do it because sulfur vaporizes and eats copper. So, sorry, you need to go to a stainless-steel column still that’ll super, highly rectify your wine, and maybe make a decent product. But if you’re not starting out with something good, don’t expect a miracle,” Karakasevic advised.

Although the volume of sales of winery-produced brandies and distilled spirits has been small and steady, it has begun to grow more rapidly in the last couple of years. This is no doubt driven, in part, by the mounting interest from Millennials in artisanal craft spirits. According to Brian Bowden, senior vice president and general merchandise manager for spirits, beer, tobacco

54 July 2017 WBM

and beverages at spirits giant BevMo, the chain “has seen an increase in all our American brandies, from everyday labels, like E&J Gallo, Korbel and Christian Brothers, to more artisanal brands, such as St. George and Clear Creek’s fruit brandies.”

Brandy sales have shifted to younger consumers while still holding strong with the Baby Boomers. Although Millennials are not trading over to brandy, they are instead just adding it into their cocktail choices, adds Bowden.

Brandy needs grapes for its production, and enterprising wineries in the U.S. are noting this trend and devoting a portion of their grape inventory to distilling without minimizing their wine production. WBM

Distillation Education CHECK OUT THESES PROFESSIONAL SOURCES FOR MORE INFORMATION

With the skyrocketing growth of the craft beer and spirits industry, there are vast resources online and numerous professional distillation organizations to get potential distillers up to speed. Here is where to start: Distilled Spirits Council of the United States, www.discus.org American Distilling Institute, www.distilling.com Thoroughbred Spirits Consultants, www.tbspirits.com Distiller Magazine, distilling.uberflip.com/distiller-magazine The Modern Distiller, www.moderndistiller.com American Craft Spirits Association, www.americancraftspirits.org

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grape growing

Necessity is the Mother of Technology Technology available to support vineyard management Mark Greenspan

Dr. Mark Greenspan has more than a quarter century of scientific viticulture research and viticultural field experience. He specializes in irrigation and nutrition management, yield and canopy management, vineyard climate and microclimate, vineyard design and vineyard technology. He is the founder of Advanced Viticulture, Inc. based in Windsor, California (www.advancedvit. com), providing consulting, technology, vineyard management and vineyard development for wineries, winemakers and wine growers devoted to producing premium wines. Please direct queries to mark@advancedvit.com or 707-838-3805.

written a few times before: “How can anyone grow grapes without technology?” The fact is that anyone can grow grapes without technology—all you need is a grapevine, soil, water, fertilizer and something to keep the pests and diseases at bay. But for those of us who grow grapes professionally and as a business, technology for sure has a place. While the old saying “Necessity is the mother of invention” certainly holds true, the adoption of technological inventions by growers is driven by necessity: necessity for compliance with laws, for safety, for labor savings, for cost savings and for quality improvement, to name several. It’s no secret that labor is becoming more scarce, and with scarcity comes higher cost.

Governments are not helping us out much either, so there’s not much imagination needed to realize that we need to find ways to do more with less labor and keep compliant with record-keeping, both for labor regulations and for materials/pesticide applications. Other motivation for technology includes such things as precision application and tracking of water and fertilizer to vineyards, and management of spatial variability of vineyards. Here is a brief discussion of just some of the technologies that are available for vineyard managers.

T O PA R A P H R A S E S OM E T H I NG I ’ V E

SCOTT SUMMERS

56 July 2017 WBM

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Necessity is the Mother of Technology

Data Systems I’ve done a couple of reviews of vineyard data management systems in the past, but it seems that new software for vineyard management is being developed all the time, so it is difficult to keep up with new developments. Nevertheless, if you have a commercial-scale vineyard and are not using some type of tracking system, you are probably teetering on the edge of non-compliance or at least not running your business as efficiently as possible.

There are several (i.e., more than just a few) different companies that make vineyard-support software. While there has been some consolidation in this sector over the last few years, there are some newer products on the market to keep the choices out there for growers. I see these software packages fulfilling about three general needs: 1) labor and resource tracking, 2) materials use tracking and 3) viticultural tracking.

Keeping track of employee time is an essential part of any business.

Growers need to track time for payroll, and vineyard managers who do work on contract need to keep track to bill their clients. But one also needs to track break times and lunch times and have records that these were given to their workers. Additional complexity enters when workers are paid by piece-rate (i.e., paid per unit of work for a task, such as per-ton of harvested fruit or per-vine for pruning). Laws dictate that workers paid in this manner are also paid an hourly rate for breaks, even if the breaks are not taken by the workers. Don’t rely on me for this information, but good software packages will provide the necessary tracking and record-keeping required to remain compliant. Failure to comply with the laws can result in substantial fines or worse, so this software functionality is important to us in this business.

These software packages can usually also track equipment usage, which can be useful for maintenance and determining a return on investment

58 July 2017 WBM

for the pieces of equipment. Vineyard management companies can use the information to bill clients for the use of the equipment.

Materials (i.e., pesticide) use tracking is just as important as labor and resource tracking. California has strict laws that govern pesticide use, and various software packages are available to make compliance with the laws a fairly easy process. From looking up product labels to writing recommendations, the software can check to make sure that rates and seasonal application limits are adhered to. While it is not possible for the software to check for each and every conflict, it can certainly help avoid some simple errors, such as entering 20 ounces of Product X accidentally instead of 2.0 ounces, for instance. The software can be used to generate formal recommendations and, from there, work orders for application personnel, which also details appropriate personal protective equipment needed for the specific products being used. Additionally, most of the software in this category will also facilitate the monthly reporting that is required, often made as simple as a push of a button.

Tracking viticultural information is made easier and more effective when using a software system for support. Phenological stages, water status, nutritional information, yield components, pruning weights and pretty much anything else can be stored in a database. Storing the information is not very useful, but the ability to retrieve the information makes it possible to draw comparisons from year-to-year, location to location, and possibly to make forecasts for important things, such as estimates of yield and harvest dates.

This renders the database much more useful than something like a “flat file” spreadsheet or similar method of data storage.

One only needs to wander the halls of the major tradeshows, or even the pages of this journal, to find some of the companies that provide these services.

Irrigation System Automation By way of a disclaimer, my company is a vendor for some companies that produce products that provide irrigation system automation, so I will not endorse any specific manufacturers here. Interestingly, I have received more requests for irrigation automation products in the past six months than ever before. I believe that labor shortages are only part of the motivation for the requests. Because much of the interest seems to be coming from high-end wineries for their vineyards, I think that control over the irrigation applications, rather than relying on hand-written reports of purported applications, is largely the motivation. Also, growers are interested in irrigating during off-peak hours for electrical power, system monitoring for failures, automating tank-filling and monitoring overall water use.

New systems are wireless, so trenching cables all over the property is unnecessary. Irrigations can be scheduled and valves opened as desired.

Pressure switches can be installed such that irrigation applications can be affirmed for irrigation block activity when irrigation is supposed to be applied and also to check that blocks are turned off when appropriate.

Faults can trigger alerts sent to the grower, as well as to automatically shut off pumps if there is a failure. Tanks and reservoirs can be filled automatically from their sources, such as wells, and this can be done independently of any other irrigation function.

Fertilizer injections can also be automated with these systems, providing precision pre-irrigation, injection and water follow-up application based on the prescription provided by the grower. Just about anything is possible with the current systems, including integrating weather stations, soil moisture devices and plant stress sensors into a system that automates the irrigation to any level desired by the grower. Most systems can be automated, but those that use electric pumps are the easiest to convert.

New technologies are around the corner that will make movement of sensed information more plentiful and cheaper. Look up “internet of things” (IoT) and you will see what is headed our way. The new technologies being developed to support IoT will be a game-changer, allowing for monitoring and control at a highly-affordable cost.

Perhaps the best news for growers is that there are programs to help fund the transition to such irrigation automation and vineyard water monitoring systems. Such programs include the federal Environmental Quality Incentives Program (EQIP) and the California State Water Efficiency and Enhancement Program (SWEEP). Pacific Gas and Electric Company (PG&E) also has a generous program to assist growers in irrigation automation through their Automated Demand Response (ADR) program, which incentivizes growers to use energy off-peak during high-demand conditions.

Precision Vineyard Management Tools Another topic I’ve written about is management of spatial variability (heck, it was the topic of my very first column back in December 2005!). Technologies to support management of variable conditions continue to improve, but some aspects have been around for a long time. I like to think of these technologies as “bottom-up” and “top-down.”

By bottom-up, I think of methods and technologies that map spatial aspects of soil characteristics. There are a few companies that have proprietary methods of performing high-density soil mapping, but anyone can hook up an electrical conductivity (EC) sensor to a GPS datalogger and map some aspects of soil variability. These devices can be direct conductivity sensors, with electrodes that penetrate the surface of the soil, or they can be electromagnetic sensors, which measure conductivity by hovering over the

WBM July 2017 59

Necessity is the Mother of Technology

soil. These devices can be used to help determine sampling locations that capture the main soil types throughout the vineyard.

By contrast, top-down refers to the observation and documentation of an existing vineyard’s variability. Aerial imagery has been around for a long while, and there are free online tools available to look at static images of pretty much any surface on the planet. But probably the most commonly-used aerial imagery type is the vegetation index, such as the normalized difference vegetation index (NDVI), which displays vegetation density on a map. Newer technologies have been developed to remove the background influence from the canopy portion of the image, thereby increasing the sensitivity of the image to capture the actual variability of the vineyard canopy which, by its nature, is not continuous across its surface. NDVI imagery can be used to identify patterns of variability, from which harvest segmentation may be made, soil investigations may be based and possibly corrective measures can be prescribed, such as precision application of soil amendments.

Thermal imagery has improved, with thermal cameras increasing in their pixel resolution over what they were years ago. The thermal information can possibly be used to indicate vine water stress (increasing stress will increase leaf surface temperatures). However, in practice, much of the thermal signal that the camera sees is due to variations in canopy density and not due to water stress. That is because the soil surface temperature most often far exceeds that of the foliage during the daytime so that a less-dense canopy will allow more of the thermal energy to pass through than a denser canopy.

So, the imagery is of dubious value as it is, unless the background pixels can be separated from actual foliage pixels. As thermal cameras increase their resolution, I suspect that this could eventually be a useful technology, but I don’t think it is there yet.

There has been a lot of talk about unmanned aerial aircraft (AKA drones).

I think that a lot of the initial interest has been replaced with healthy skepticism, including my own. However, I would not rule them out just yet. I think that drones may be able to do more advanced mapping than aircraft, including the possibility of quantification of the 3-D nature of the canopy that aerial imagery cannot capture from overhead. Perhaps this is also where thermal imagery can be improved upon as the cameras can capture finer detail by flying at a lower altitude.

Drone technology may serve a purpose apart from sensing of the canopy.

Larger drones are available that can spray materials on vineyards. I’ve been skeptical if this could actually be a practical application, but I have a client who has used this in his steep hillside vineyard with success. Let’s see if it works under heavy mildew pressure.

Technology for farming takes many forms, not always being as “sexy” as drones or as extensive as an automated irrigation control system. Just look at today’s pick-up trucks compared to those from 10 to 15 years ago. Likewise with tractors and harvesters. Technology is not new—it’s evolving. WBM

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60 July 2017 WBM

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American Society for iticulture enology and viticulture

ASEV Corner: In Reflection As my term as board president of the American Society for Enology and Viticulture (ASEV) comes to an end, I’d like to take some time to reflect on my time as president and my excitement about what ASEV will continue to accomplish.

I have been a member of ASEV since 2003, serving on many committees, from Best Student Paper to Early Career Member Committee and as president this past year. I’ve learned so much from the interactions I’ve had with colleagues and ASEV members. They’ve opened my eyes to all that ASEV does and what it can achieve for its members.

During my tenure as president, I’m most proud of finally getting our second publication, Catalyst: Discovery into Practice, off the ground.

While still young, it promises to be a valuable source of scientific research for our industry’s growth. I’m a believer in investing in our future, and I championed the early career membership to provide those starting out in the industry professional development tools and mentorship. By giving early career members a place to meet, establish relationships and engage in conversations with their colleagues, ASEV’s early career member sessions have made an impact on our newer members. It’s so important to elevate young professionals and encourage them to participate and contribute to this effort that’s bigger than all of us.

Another way we’ve been able to expand our reach is by offering a larger scholarship program through the President’s Award. This special scholarship, with a total of $25,000, rewards two students who have exceeded our expectations and allows them to pursue degrees in enology and viticulture. I am so thrilled that we are able to provide this type of support and can’t wait to see the incredible accomplishments of our current and future scholarship recipients.

Finally, I am proud to say that more than 50 percent of our board members are women. It is critical that we make space for the contributions of women in this traditionally male-dominated field. I am honored to be a part of a board legacy in which so many female leaders have been actively involved in shaping this industry.

As I look forward, I am enthusiastic about what the members of ASEV will accomplish together in the coming years. We are continuing to grow our membership and increase the diversity of our members and our committees. Through our impressive membership, we will continue to build on innovation and increase our impact on enology and viticulture for years to come.

It has been an honor to serve as the president. I am thankful to all who have made this time so rewarding. I look forward to working with you in the future.

Nichola Hall, ASEV President (2016-2017)

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WBM July 2017 61

grape growing An Empirical Study:

Freeze Damage’s Effect on Grape Development and Wine Quality Research shows how the November 2014 freeze event in Walla Walla, Washington affected cluster morphology, juice chemistry, wine chemistry, phenolics and sensory perception of 2015 Walla Walla Valley Cabernet Sauvignon.

Neil Johnston

Editor’s Note: This article is presented in two parts. Part One, in this issue,

focuses on the differences in cluster morphology, grape phenolics and juice chemistry. Part Two will appear in the August issue, and will show how the wine chemistry, wine phenolics and ultimately the perception of color, aroma and flavor were affected by the freeze damage. you that there was a place on earth where you could grow grapes on their own roots with more than 300 days of sunshine, abundant degree days, limited disease pressure and cool, dry harvests virtually every year? Well, that place exists; it’s called Washington state. The downside to this rosy picture is that in any given year, there can be significant cold damage due to the continental nature of the climate in the Columbia basin.

Walla Walla Community College has its own student-grown vineyards (Stan Clarke Vineyard) and a teaching winery. Attached to it is ETS Laboratories, which supports whatever whim the students want to study with on a moment’s notice. This unique situation allows for real, preliminary research to be done at the drop of a hat when a particular event arises. In November 2014, nature provided us with a unique opportunity to perform such a study.

W H AT I F I T OL D

62 July 2017 WBM

Neil Johnston graduated with distinction from the Walla Walla Community College Enology and Viticulture Program in June 2016. He is currently the assistant winemaker for Dumas Station Wines in Dayton, Washington.

“Over the years there has been significant research, by both academics as well as growers and winemakers, showing how managed crop load affects wine quality,” said Tim Donahue, director of winemaking at Walla Walla Community College’s Enology and Viticulture Center. “But, to my knowledge, there has never been a study performed that explores how crop load variation caused by bud damage affects wine quality.”

The 2014 growing season was long and warm in southeastern Washington. During the first week of November, temperatures in the Walla Walla AVA lingered from the high 50s to the low 60s. Many vines had not yet experienced sufficiently cold temperature of the required duration to acquire cold-hardiness.

Within two weeks, a record-breaking polar vortex that lasted nearly 28 days had plunged temperatures to the high teens and, within three weeks, on November 30, the temperature reached a low of 5° F. While these conditions may be ideal for making 53° Brix Icewine, it isn’t exactly ideal for still-tender vines. This freeze event damaged vines in many vineyards, with results that ranged from vineyard blocks being cut to the ground, to other vineyard blocks experiencing levels of bud death that resulted in vines pruned to multiple nodes per spur.

Many cold-sensitive varietals in the Walla Walla AVA were severely impacted. The Stan Clarke vineyard is a fairly high-altitude (1,200 feet) site planted in 2003 primarily to a mix of Bordeaux reds and Loire and Rhône whites. A block of nearby Viognier vines was decimated, producing less than 200 pounds of fruit at the 2015 harvest, and the adjacent Merlot vines received nearly 90 percent bud damage. Interestingly, during cluster count operations in the Walla Walla Community College Enology and Viticulture Program’s Stan Clarke Cabernet Sauvignon block, we observed three distinct “Damage Zones.” The southwestern end of the block had zero bud damage, the middle of the block had roughly 50 percent bud damage, and the northeastern end of the block had about 80 percent bud damage (I M A G E 1 ).

This unfortunate event provided us with a great opportunity. The design of the empirical study called for managing the entire block uniformly throughout the growing season and then harvesting each of the “thirds” representatively. Photographs and measurements would be taken of the clusters, as well as juice panels and rapid phenolics. Then, three lots of wine

IMAGE 3 ALL PHOTOS BY NEIL JOHNSTON

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IMAGE 1

WBM July 2017 63

Freeze Damage’s Effect on Grape Development and Wine Quality

TA B L E 1 :

Study Design

The entire block had been pruned evenly to 4 nodes (I M A G E 2 ). The block was managed uniformly, to limit any differences in fruit phenolics and chemistry strictly to the difference in bud-damage-caused crop load.

Vines were shoot positioned and hedged, and irrigated equally. No crop reduction mechanism was employed. Strictly due to the bud damage, the vines carried 8 tons per acre (TPA) to harvest at the southwestern end of the block, approximately 4 TPA in the middle, and about 2 TPA at the northeastern end of the block.

We did a representative harvest of each zone, with detailed measurements and pictures of the fruit.

The fruit was processed in three lots, and wines were made in duplicate from each of the three freeze-affected zones.

Full juice panels and rapid phenolics were run, to see if there were any differences in chemistry or phenolic data due to the crop load differences.

We then bottled the wines and ran wine chemistry and phenolic analyses.

After three months, we conducted two blind tastings: a simple hedonistic preference panel, followed by a descriptive sensory analysis (QDA) panel for each of the three wines.

With the aid of ETS Laboratories, we used a variety of technologies and laboratory analyses to measure what effect, if any, freeze damage had on: 1. Juice chemistry: Brix, TA, pH and IBMP 2. Cluster morphology: shape, condition, number of clusters, cluster weight and berry weight 3. Berry phenolics: catechin, tannin, quercetin glycosides, polymeric anthocyanins and total anthocyanins IMAGE 2

would be made in duplicate, giving us the opportunity to assess chemical panels and wine phenolics, as well as perform a sensory evaluation of the finished wines (T A B L E 1 ).

4. Fermentation kinetics 5. Wine chemistry 6. Wine phenolics 7. Sensory attributes The question was: what would be the observed impact of this major freeze event on crop and wine quality?

Part 1: Harvest Methodology

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At harvest, the four students responsible for managing the block and I did a representative harvest of the entire block, picking two clusters “semi-randomly” from each vine in the block.

The block averaged 43 vines per row (I M A G E 3 , previous spread). We excluded fruit from the five vines at each end of the row and divided the remaining vines into three zones, with equal numbers of vines in each zone (I M A G E 4 ).

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64 July 2017 WBM

IMAGE 4

IMAGE 5

IMAGE 6

The vineyard had been cultivated so that each vine had two cordons, each of which was pruned to six spur positions. Before harvest, the students were instructed to consider each vine as if it contained a 3x3 grid of potential fruit locations on each arm of the cordon: three just below the cordon (from the buds closest to the cordon), three just above the cordon (from the next set of extra buds higher on the cane), and three 12� to 18� above the cordon (higher than normal but below the second set of wires).

Working side-by-side, each of us was to mentally select a grid location before approaching the vine and harvest whatever was at that location, taking two clusters from each vine. It was emphasized not to repeat a pick position.

Pick two clusters, mentally select a new zone, move down five vines and repeat (I M A G E 5 ). The purpose of this methodology was to provide as close to a randomly representative harvest as practicable under the circumstances.

Two clusters were harvested from each vine in the block following this protocol and placed in color-coded bins (I M A G E 6 ).

Part 2: Cluster Morphology Clusters were placed on sorting tables for photographing (I M A G E 7 ). They were counted and clusters and berries were weighed. T A B L E 2 shows the data collected from the clusters.

TA B L E 2 :

Cluster morphology Undamaged

Damaged

Severe Damage

Number of Clusters

464

472

504

Total Weight (lbs)

93.5

90

89

Juice Yield (liters)

28

27

26.7

Cluster Weight (lbs/cluster)

0.2025

0.18

0.17

Berry Weight (grams/berry)

0.945

0.998

0.912

IMAGE 7

WBM July 2017 65

Freeze Damage’s Effect on Grape Development and Wine Quality

Cluster Morphology Clusters were placed on sorting tables for photographing

Undamaged Verdict: The clusters from the undamaged vines had mostly normal morphology, with a reasonable

number of “full” clusters, many with shoulders. There was some shatter and some evidence of berry shrivel. There were no signs of disease or other damage (I M A G E S 8 A N D 9 ) .

IMAGE 8

IMAGE 9

66 July 2017 WBM

Damaged The clusters from the moderately freeze-damaged vines had more elongated clusters, with fewer full clusters and fewer shoulders. Compared to the undamaged vines, the clusters

IMAGE 10

IMAGE 11

Severe Damage were very loose. Like the undamaged vines, there was some evidence of berry shrivel. There were no signs of disease or other damage (I M A G E S 1 0 A N D 1 1 ).

The clusters from the severely freeze-damaged vines were also elongated and without shoulders.

Although there were a few full clusters, most of the clusters appeared quite shattered and loose. There appeared to be a greater preponderance of shrivel. There were no signs of disease or other damage (I M A G E S 1 2 A N D 1 3 ).

IMAGE 12

IMAGE 13

WBM July 2017 67

Freeze Damage’s Effect on Grape Development and Wine Quality

Verdict: The juice differences weren’t, on the whole, terribly significantly

different, with the exception of IBMP. Both the undamaged and severely damaged vines had substantially more IBMP than the moderately damaged vines. This is similar to some other crop load research we have conducted over the years where we see that moderate crop loads in our Cabernet blocks tend to have lower levels of IBMP than either heavy crop loads or extremely thinned crops.

Part 4: Grape Phenolic Chemistry A random, 400g selection of berries were chosen from each of the clusters and sent to ETS Laboratories for a “rapid” phenolic panel. Further information about this analysis can be found at www.etslabs.com. See T A B L E 4 .

IMAGE 14

Part 3: Juice Chemistry

TA B L E 4 :

The fruit was destemmed and fully crushed, using the winery’s Delta E-2 destemmer. The machine can handle 10 to 20 tons per hour. I M A G E 1 4 shows the setup required1 to process a single 20-pound pick bin. See T A B L E 3 .

TA B L E 3 :

Harvest Data

Harvest Phenolics (units in mg/L) Undamaged

Damaged

Severe Damage

catechin

57

67

58

polymeric anthocyanins

16

15

14

quercetin glycosides

17

22

21

Undamaged

Damaged

Severe Damage

Brix

28.1

29.2

28.2

TA (g/L)

5.3

5.2

5.3

tannin

280

323

247

pH

3.64

3.71

3.7

IBMP (ng/KG)

10.6

8.5

12.8

total anthocyanins

916

871

871

Verdict: In terms of anthocyanins, both polymeric and total, there weren’t

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major differences. There was slight variation in the levels of quercetin between the undamaged vines and the damaged vines. We saw larger differences in both catechin and tannin, where the moderately damaged vines had more catechin and tannin than at either end of the spectrum between undamaged and heavily damaged vines.

Conclusion Throughout all of the viticulture articles I have read and with the help of Jeffery Popick, my viticulture instructor, there has been a notion of “vine balance.” According to this study, it would seem that the moderately damaged vines that were carrying roughly 4 tons per acre ended up with the lowest levels of IBMP and the highest levels of overall tannin, which for Cabernet are quality markers. It would seem that much like basic crop load studies, 8 TPA is excessive and creates excessive IBMP and reduces overall tannin, and the same can be said of the severely damaged vines that were carrying too low of a crop load.

The question is, how does this reflect in wine quality? Stay tuned. The August issue will detail the wine chemistry, wine phenolics, the tasting panel’s wine preference, and the QDA perception of color, aroma and flavor differences from the three wines. WBM

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Author’s Note This study would not have been possible without the mentorship and support of my instructors Tim Donahue and Jeff Popick, the inspiration of Dr. Steve Price, and the support of ETS Laboratories.

Special thanks for the enthusiasm, hard work and encouragement provided by the 2015 Stan Clarke Cabernet Sauvignon team, Olivia Anderson, Dusty Jenkins and Kelly Menozzi, and for the excellent sorting and weighing help of Sam Meyer. © 2017 METLIFE, INC.

68 July 2017 WBM

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www.winebusinessIQ.com WBM July 2017 69

sales & marketing

2017 WBM/SVB Tasting Room Survey Report

Direct-to-Consumer Sales Account for 60 Percent of Winery Revenue, Volume and Value Gaining DTC sales up 15 percent over 2016 Cyril Penn

RICHARD DUVAL

sports metaphors in Wine Business Monthly, but direct-to-consumer sales in the wine industry are sometimes likened to a team sport, one where wineries can measure their progress and celebrate success.

Like any team sport, part of the fun is in knowing how to keep score to recognize, at any given time, if one is winning or losing. Metrics help focus members of the team. Wineries have limited resources and need to decide what they’re going to focus on, what they’re not going to focus on and where to deploy these limited resources to help improve performance.

Benchmarking performance against other wineries can be helpful. Wineries continue to up their game; refining, building and improving their direct-toconsumer models.

The 2017 Wine Business Monthly/Silicon Valley Bank tasting room survey drew nearly 1,200 responses from across the United States, with high levels of participation from wineries in regions outside of California, Oregon and Washington, providing a robust data set. Participation from wineries in Virginia, Texas, New York and British Columbia, in particular, was quite strong.

The results reflect the evolution of best practices for selling wine. It’s not a surprise that the survey drew such a healthy response rate. Direct sales are more important than ever for the success, survival and growth of small family-run wine businesses. Direct sales now account for 60 percent of winery revenue nationally, according to the survey (C H A R T 1 ). In some regions, that number is considerably higher.

W E T E N D T O AVOI D

CHART 1

Total Revenue from DTC Sales by Case Production 2015

Case Production 0%

2016

20%

40%

60%

80%

100%

20%

40%

60%

80%

100%

1 - 2,500

2,501 - 5,000

5,001 - 10,000

10,001 - 25,000

25,001 - 50,000

50,001 - 100,000

100,001 - 250,000

>250,000

Average

0% SOURCE:

70 July 2017 WBM

Wine Business Monthly/Silicon Valley Bank, 2017

2017 WBM/SVB Tasting Room Survey Report

Revenue from direct-to-consumer sales rose across the board this year. In fact, the survey showed the value of tasting room sales growing on average by 15 percent nationally between 2015 and 2016. The volume of wine sold increased, but the growth in revenue outpaced growth in volume, reflecting higher bottle prices (C H A R T 2 ).

CHART 2

Change in Dollars and Cases Sold in the Tasting Room from 2015 to 2016 - by Region Cases Sold YOY Change Dollars Sold YOY Change Region 0%

10%

20%

30%

40%

50%

Santa Cruz and Monterey

6% 7%

New York

6% 13%

Santa Barbara

7% 11%

Sierra Foothills

7% 10%

Napa County

7% 12%

Rest of US

10% 11%

Paso Robles

11% 13%

Livermore, Lodi, & Delta, CA

13% 15%

Oregon

13% 14%

Virginia

15% 16%

Sonoma County

16% 18%

British Columbia

16% 17%

Washington

16% 20%

Mendocino County

16% 16%

Rest of California

16% 21%

International

18% 10%

Illinois

23% 24%

Average

12% 15% 0%

SOURCE:

10%

20%

30%

40%

RICHARD DUVAL

The view of Lake Chelan from the deck of Nefarious Cellars in Washington.

Who Wineries Are Selling To is from Silicon Valley Bank’s annual Industry Conditions Survey and it’s useful for understanding who wineries are selling to by age group. It shows Baby Boomers remain the most important driver of sales by far, but are starting to trend down. GenX is on the rise and now represents 33 percent of direct sales. Millennials are starting to represent a more significant proportion of direct sales.

CHART 3

CHART 3

DTC Sales by Age Cohort: 5-Year Trend

Millennials surpassed Matures for the first time in 2014* Millennials (ages 22-38)

Gen X (ages 39-50)

Boomers (ages 51-68)

Matures (ages 69+)

50% 50%

Wine Business Monthly/Silicon Valley Bank, 2017

Boomers 41%

40%

Gen X 33% 30%

Wine Club Sales Trending Upward The most important metrics wineries track include conversion of customers to sales, average rate of conversion to wine club and length of wine club membership. These metrics are trending upward. Average wine club conversion rates rose to 7 percent in this year’s survey, compared to 6 percent in the previous survey. The average tasting room purchase reached $122 this year.

The average wine club member now stays in the club for 30 months.

72 July 2017 WBM

Millennials 17%

20% 10%

Matures 10% 0% 2012 SOURCE:

2013

2014*

Wine Business Monthly/Silicon Valley Bank, 2017

2015

2016

Join the Club.

Where the Customers Come From We asked wineries how many of their wine club members live within a day’s drive, a new question in the 2017 survey (C H A R T 4 ). The answers speak to the importance of tourism and wineries partnering with local tourism offices to promote their regions. So many regions work hand-in-hand with local tourism agencies. The results also speak to the importance of local consumers, consumers who want to know their farmers—i.e., shopping locally—and pride in local wine regions.

Look at the results in Napa. It’s commonly been assumed that tasting rooms in Napa and Sonoma rely largely on day-trippers—people from the San Francisco Bay Area who drive up for the day. Wines in Napa and Sonoma tend to be relatively expensive and the San Francisco Bay Area’s economy is robust, one of the nation’s most vibrant. The survey found, however, that just 20 percent of visitors to tasting rooms in Napa live within a day’s drive.

That means 80 percent of visitors to Napa tasting rooms are tourists. Napa clearly relies on tourism, perhaps to a greater degree than many realize.

Other regions—Virginia, Texas and Illinois among them—rely more on the local economy.

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60 DAY MONEY-BACK GUARANTEE CHART 4

Percent of Members Who Live Nearby* vs. Percent of Total Revenue from DTC Sales *Live Nearby = Members who live close enough to visit the winery and return home the same day

Percent Wine Club Members Who Live Nearby

Region 0%

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Percent of Revenue from DTC Sales

20%

40%

60%

80%

100%

20%

40%

60%

80%

100%

Napa County British Columbia Sonoma County Mendocino County New York Paso Robles International Average Santa Barbara Santa Cruz and Monterey Washington Oregon Rest of US Rest of California Sierra Foothills Illinois Texas Livermore, Lodi, & Delta, CA Virginia 0% SOURCE:

Wine Business Monthly/Silicon Valley Bank, 2017

WBM July 2017 73

2017 WBM/SVB Tasting Room Survey Report

RICHARD DUVAL

Cairdeas tasting room in Washington. Behind the bar is Lacey Lybecker, co-owner with husband Charlie who is the winemaker.

Traffic in tasting rooms has been relatively flat, though it rose in some regions last year. C H A R T 5 shows average monthly visitors per winery.

Wineries in Mendocino see the lowest rate of visitation, possibly because they are harder to get to—although the survey also shows that visitors to wineries in Mendocino are more likely to buy.

Getting customers to the tasting room is always a priority but what you do once they’re there is key. While the number of visitors has been pretty steady,

CHART 5

CHART 6

Average Monthly Visitors per Winery by Region Public and By Appointment Region

tasting room and club sales are on the rise, a sign that wineries are becoming better at selling direct.

Events are an important revenue generator for many wineries and range from wine club parties to wine club or winemaker dinners. The types of events wineries are involved in varies considerably and is often restricted by local ordinances. Clearly, though, events are a factor when it comes to consumer wine sales (C H A R T 6 ).

Direct Sales Generated from Events by Region Region 0%

Average Monthly Visitors

10%

20%

30%

40%

New York

23%

Virginia

2,075

Illinois

17%

New York

2,051

International

14%

Texas

1,609

Washington

13%

Napa County

1,497

Rest of California

13%

Livermore, Lodi, & Delta, CA

1,351

Rest of US

12%

Paso Robles

1,342

Santa Cruz and Monterey

11%

Rest of US

1,290

Texas

10%

Rest of California

1,169

Oregon

10%

Illinois

1,168

Average

9%

British Columbia

1,159

Sierra Foothills

8%

Average

1,116

Virginia

8%

Sonoma County

1,039

Mendocino County

7%

International

947

Sonoma County

7%

Santa Cruz and Monterey

941

Santa Barbara

6%

Sierra Foothills

881

Livermore, Lodi, & Delta, CA

6%

Santa Barbara

751

British Columbia

6%

Oregon

711

Napa County

5%

Washington

618

Paso Robles

5%

Mendocino County

384 0% 0

SOURCE:

1,000

Wine Business Monthly/Silicon Valley Bank, 2017

74 July 2017 WBM

2,000

3,000

4,000

5,000

SOURCE:

10%

20%

Wine Business Monthly/Silicon Valley Bank, 2017

30%

40%

50%

50%

2017 WBM/SVB Tasting Room Survey Report

Direct Sales from Wine Club versus Tasting Room

CHART 8

As C H A R T 7 shows, the lions’ share of direct sales comes from the wine club and from within the tasting room. Phone sales and online sales are becoming more of a factor, to be sure, but roughly 80 percent of direct sales come from either from the tasting room or the club.

Wineries in regions such as Virginia, New York, and Illinois tend to rely very heavily on tasting room sales and less on clubs, and are more regional in terms of who they’re selling to when compared to wineries in the more tourist-oriented regions such as Napa, Sonoma or The Okanagan. It’s interesting to see how the mix varies by region. Napa and Sonoma rely more on wine clubs and relationships with customers after they have visited the tasting room.

Public vs. By Appointment by Region By appointment Region 0%

Open to the public

20%

40%

60%

80%

100%

20%

40%

60%

80%

100%

Napa County Sonoma County Paso Robles Rest of California Santa Barbara International Oregon Sierra Foothills

CHART 7

Direct Sales from Wine Club and Tasting Room by Region

% DTC Sales Wine Club/ Allocation Subscribers

Region 0%

20%

40%

% Visitor Center/Tasting Room 60%

Paso Robles

52%

Napa County

46%

Sonoma County

45%

Santa Cruz and Monterey

41%

Santa Barbara

41%

40%

40%

36%

Texas

39%

46%

Livermore, Lodi, & Delta, CA

37%

52%

100%

Virginia British Columbia

30%

Rest of US

30%

Washington

29%

New York

34%

Oregon

36%

47%

Average

35%

44%

Rest of California

32%

40%

Washington

29%

51%

Sierra Foothills

26%

52%

British Columbia

21%

59%

Virginia

20%

69%

New York 10%

58%

Rest of US 10%

73%

International 10%

57%

0%

20%

40%

60%

Illinois 0% SOURCE:

80%

100%

Wine Business Monthly/Silicon Valley Bank, 2017

Tasting Room Service Style Greatly Affects Purchasing Three years ago we started asking about tasting room purchases based on type of tasting—seated versus standing, by appointment or open to the public, and so on—to determine which models produce the best results.

The results were striking.

We found that wineries that are open by appointment only tend to report average purchase amounts that are higher than for wineries that are open to the public. That makes sense for a number of reasons. The percentage 76 July 2017 WBM

Santa Cruz and Monterey

Mendocino County

Mendocino County

SOURCE:

80%

Livermore, Lodi, & Delta, CA

Wine Business Monthly/Silicon Valley Bank, 2017

of wineries that are open by appointment-only is greatest in Napa Valley, which boasts the highest prices. The by-appointment model is increasingly being used in regions such as Oregon and along California’s Central Coast (see C H A R T 8 ). Consumers that have made appointments tend to be more serious. There may be fewer visitors but the visitors typically spend more in these situations.

The choice of tasting room experience also greatly influences the success of DTC programs, including conversion rates to wine orders, conversion to wine club members and so on. Seated private or formal tasting experiences represent a small segment but a disproportionate share of revenue for some wineries (see C H A R T S 9 A N D 1 0 ). Seated tastings allow for more focused time spent with each guest, which leads to a better understanding of tastes and preferences. Many wineries have been going in the direction of providing seated tastings. That doesn’t mean they’re for everyone.

Choosing the best service style for a given winery will depend on the brand and each individual situation. It’s a business decision which affects how a winery needs to be staffed. The results don’t necessarily mean wineries need to rush out to provide a private, by-appointment only setup. Wineries need to look at their tasting rooms and their brands to see what makes sense for their business model. Many have gone in the direction of a hybrid: open to the public with the option of for some private experiences.

The survey also found that consumers are slightly more attracted to wine clubs that offer some choice or complete choice when it comes to the type of wine that is shipped to them.

CHART 9

Effects of Tasting Room Service Style on Wine Purchases

Tasting Room Service Style

0

Number of Monthly Tasting Room Visitors 400 800 1,200 1,600

2,000

0

$100

$500

$200 $300 Average Tasting Room Purchase

$400

Monthly Tasting Room Visitors Tasting Bar – Standing

1,325

Conversion to Purchase

66% $75

Average Tasting Room Purchase

675

Tasting Bar – Seated

Tailoring the Customer Experience Some wineries are doubling down on their efforts to create memorable experiences, like concierge services, hiring staff as greeters and assisting staff while managing the flow of traffic in the tasting room. It’s an emerging trend. We saw dozens of these positions advertised via winejobs.com this spring. Most, but not all, of them were based in Napa. People like to be recognized and appreciated when they go places and a successful greeter strives to figure out what each customer wants and make them feel special.

An effective concierge achieves this by asking open-ended questions, understanding which questions to ask the guest, noting what’s actionable, relaying it to staff and having the flexibility to be able to tailor an experience.

68% $79 1,190

Seated Tasting – Casual or Group

63%

CHART 11

$117

Excludes Wineries <5 years old *New Wine Club Member Growth Rate = New club members obtained in 2016, divided by base membership level at the beginning of 2016

375 Seated Tasting – Private or Formal

73%

*Attrition Rate = Number of wine club members lost in 2016, divided by base membership level at the beginning of 2016

$461 0%

20%

40%

60%

80%

Region 0%

100%

Conversion to Purchase SOURCE:

New Wine Club Member Growth Rate* and Wine Club Attrition Rate*

8%

16%

24%

32%

40%

4%

8%

12%

16%

20%

Average

Wine Business Monthly/Silicon Valley Bank, 2017

British Columbia Illinois

Conversion Rate* of Visitors to Wine Club by Service Style & Shipment Options

CHART 10

International

Excludes Wineries <5 years old

Livermore, Lodi, & Delta, CA

*Conversion Rate = Number of new wine club members in 2016 divided by the number of total visitors in 2016 Tasting Room Service Style

0%

Number of Monthly Tasting Room Visitors 5% 10% 15% 20%

Mendocino County 25%

Napa County New York

Tasting Bar – Standing

Oregon Tasting Bar – Seated

Paso Robles Rest of US

Seated Tasting – Casual or Group

Santa Barbara Seated Tasting – Private or Formal

Santa Cruz and Monterey Sierra Foothills

No Choice Some Choice

Sonoma County

Complete Choice

Virginia Washington 0%

5%

10%

15%

20%

25% 0%

SOURCE:

Wine Business Monthly/Silicon Valley Bank, 2017

SOURCE:

Wine Business Monthly/Silicon Valley Bank, 2017

WBM July 2017 77

2017 WBM/SVB Tasting Room Survey Report CHART 13

Keeping the Wine Club Going— New Members and Club Attrition

Method 0%

Wineries work so very hard to bring in new wine club members just to maintain their clubs while they typically lose a significant number of them every year (C H A R T 1 1 ). The good news for wineries is that new member signups are outpacing attrition.

As stated earlier, the average new wine club member now stays in the club for 30 months—an increase from the 28-month average reported in the 2016 survey and Napa Valley is ahead of the pack.

Shifting one’s focus to retention and to differentiated clubs and experiences where wine club members feel connected can help retain club members. It is more profitable to hold onto a wine club member than to get a new one. Net wine club growth is increasing by double-digits. The average club grew by 14 percent last year (C H A R T 1 2 )

CHART 12

Excludes Wineries <5 years old *Net Wine Club Growth Rate = New club members obtained in 2016, less members lost in 2016, divided by base membership level at the beginning of 2016 10%

20%

20%

40%

60%

80%

100%

20%

40%

60%

80%

100%

Spend Specific Dollar Amount Purchase Specific Number of Bottles Join the Wine Club We Don’t Reimburse Other

0% SOURCE:

Wine Business Monthly/Silicon Valley Bank, 2017

The Value of a Wine Club Member

Net Wine Club Growth Rate*

Region 0%

Popularity of Tasting Fee Reimbursement Methods

30%

40%

British Columbia

22%

Rest of US

20%

New York

17%

Average

14%

International

14%

Sonoma County

14%

Washington

14%

Napa County

13%

Virginia

12%

Oregon

11%

Livermore, Lodi, & Delta, CA

10%

Mendocino County

50%

It’s not surprising to see Napa at the top of the list in terms of annual revenue per wine club member because of its higher bottle prices (C H A R T 1 4 ).

There’s room for growth in many regions, particularly in the Sierra Foothills.

When one factors in the average amount of time a consumer stays in a wine club, one can determine the average lifetime value of a club member. Bottle prices are increasing, the average wine club member is staying longer, and the average lifetime value of a club member is on the rise (C H A R T 1 5 ). Note how that value has increased in the last year in Oregon, Napa, Washington Sonoma, and particularly in Virginia.

CHART 14

Total Annual Revenue* per Member by Region (Average excludes international respondents) *Total Annual Revenue = Annual wine club shipments + annual additional member purchases

Region $0

$250

$500

$750

$1,000

Napa County

$1,075

Sonoma County

$800

10%

International

$772

Santa Barbara

9%

Average

$750

Sierra Foothills

7%

Texas

$678

Paso Robles

5%

British Columbia

$671

Santa Cruz and Monterey

5%

Livermore, Lodi, & Delta, CA

$638

Illinois

3%

Washington

$632

Oregon

$605

Rest of US

$593

Paso Robles

$586

Santa Barbara

$576

Santa Cruz and Monterey

$560

Rest of California

$539

Virginia

$517

New York

$440

0% SOURCE:

10%

20%

30%

40%

50%

Wine Business Monthly/Silicon Valley Bank, 2017

When and Whether to Reimburse Fees Not that many wineries charged for tastings 10 or 15 years ago. Those days are long gone. Most people charge, and the survey has shown fees climbing over time. When do wineries waive those fees? This is an area where we’re seeing an evolution. Fifty-two percent waive the fees if a specific number of bottles are purchased but an increasing number of wineries are tying the decision to spending a specific dollar amount (C H A R T 1 3 ). They’re also generally increasing the hurdle rate for reimbursement.

Mendocino County

$425

Illinois

$367

Sierra Foothills

$291

$0

78 July 2017 WBM

SOURCE:

$1,250

$250

$500

Wine Business Monthly/Silicon Valley Bank, 2017

$750

$1,000

$1,250

CHART 15

Two-year Trend of Average Lifetime Value* by Region

CHART 16

(Average excludes international respondents)

Region 0%

*Average Lifetime Value = Total annual wine club revenue per member multiplied by average years in club 2015 Region $0

$1,000

2016 $2,000

$3,000

$5,000

$1,443

Oregon

$1,515 $911

Virginia

$1,867

45%

Paso Robles

42%

Santa Barbara

40%

Sierra Foothills

36%

Sonoma County

36%

Rest of California

32%

Mendocino County

29%

Oregon

28%

Average

28%

New York

25%

British Columbia

22%

$1,797

Rest of US

22%

$1,926

Washington

20%

$1,280

Livermore, Lodi, & Delta, CA

19%

Illinois

17%

Virginia

17%

Santa Cruz and Monterey

16%

International

7%

$1,718

Average

$1,881 $0

$1,000

$2,000

$3,000

60%

Napa County

$1,345

Sonoma County

40%

57%

$2,897

Washington

20%

Texas

$2,587

Napa County

SOURCE:

$4,000

Percent of Wineries that Report it’s Difficult to Find Competent Tasting Room Staff by Region

$4,000

$5,000

Wine Business Monthly/Silicon Valley Bank, 2017

0% SOURCE:

Finding Tasting Room Staff Remains Difficult It’s a cliché to say that good help is hard to find but, it’s true, possibly more so than ever. Labor is a huge topic across the country and for wineries.

There has been countless discussion about the tightening labor market, especially when it comes to vineyard and cellar workers. Finding tasting room staff can be difficult too. Part of the challenge is that the economy has been improving. Another part, in California especially, is high housing costs. Some regions struggle on this front more than others, based on where they’re located (C H A R T 1 6 ). Tasting room staff are expected to know a lot about the product, yet starting wages in tasting rooms sometimes are on par with fast food jobs.

20%

40%

60%

80%

100%

80%

100%

80%

100%

Wine Business Monthly/Silicon Valley Bank, 2017

CHART 17

Popularity of Incentive Compensation

Incentive Compensation 0%

20%

40%

60%

Wine Sales Commissions

33%

Bonus for Reaching Individual Goals

18%

Bonus for Reaching Team Goals

23%

None

46%

Wine Club

Incentive Compensation on the Rise Incentive compensation that rewards tasting room employees for selling wine and/or singing up new wine club members is on the rise. Sixty-four percent of all wineries provide some form of incentive compensation for new club member sign ups, and 40 percent now offer some form of compensation for club retention (C H A R T 1 7 ). That’s a huge shift. Just a few years ago, residuals for wine club retention were a new thing and practically nonexistent, a practice one only found at a few wineries. Today we see commissions for wine sales, for clubs and retention and even incentives for customer data.

Sometimes rewards are based on a combination of individual and teambased incentives. WBM

Payment for New Club Member Sign Ups

64%

Residuals Paid for Club Retention

40%

Payment for Contact Data Capture

7%

Payment for Exceeding Team Goals

14%

None

32% 0%

SOURCE:

20%

40%

60%

80%

100%

Wine Business Monthly/Silicon Valley Bank, 2017

WBM July 2017 79

sales & marketing

Perspectives on Tasting Room Staff Training Study of Virginia wineries reveals commonalities, best practices Jennifer L. Blanck

W I T H T H E G R O W I N G I M P O R T A N C E of the tasting room as a major distribution channel and increasing competition in the wine industry, adopting best practices and maximizing tasting room success becomes a higher priority for wineries. At the same time, both industry leaders and researchers contend that tasting room staff do not receive adequate training.

An independent research project was recently conducted in Northern Virginia, in which 12 wineries were interviewed between November and December 2016 to examine the attitudes and perspectives of owners and operators regarding the tasting room and training for staff.

The wineries interviewed rely on wine tourism and the on-site consumption experience, with 80 to 100 percent in direct-to-consumer (DTC) sales.

They expressed three main benefits of having a tasting room: economic, branding and experiential. Everyone discussed the economic benefits, including sales, profit margins and sampling opportunities. Many discussed branding opportunities, including the tasting room as “an extension of the owner’s vision of how to present their wine.”

Interviewees exhibited an understanding of who their customers are and their motivations for visiting. Wine quality and location were the top reasons cited. Winery reputation, service/hospitality and the overall experience were also mentioned often. Interviewees discussed how their winery’s specific tasting room characteristics and branding factored into visitor motivations.

Training employees to meet the winery and customer expectations is crucial, and interviewees discussed their current and best practices.

Tasting Room Staff Qualifications All interviewees mentioned communication skills, interpersonal skills, a good personality or specific personality traits as the top qualifications needed for tasting room staff. Only three noted sales skills. Although some expressed a preference for hospitality experience, only one interviewee mentioned any specific experience or background that was required, and no one required tasting room experience. Many wineries noted the varying backgrounds of their staff, often referring to teachers as successful tasting room staff members.

A couple people mentioned the challenge of finding staff.

Surprisingly, no winery required wine knowledge, and one actually preferred staff without any formal wine background so they could train new employees in their own way. Everyone stated they would provide the wine knowledge staff would need to do the job.

80 July 2017 WBM

Jennifer L. Blanck obtained her WSET Level 3 Award in 2007 and recently completed a Master of Science in Wine Business from the Burgundy School of Business in Dijon, France. She conducted this independent research project for her thesis. She also has more than 20 years of experience in communications, is a freelance writer and can be reached at jlblanck@yahoo.com.

Tasting Room Staff Training The prevailing view on training for tasting room staff, from two-thirds of interviewees, is that training is an imperative part of the job. Of these, most require staff to undergo training before working directly with customers.

Interviewees described a full range of topics and methods for training tasting room staff. Some have extensive training programs that cover many topics and incorporate a variety of methods. The ones who have comprehensive programs already in place often shared specific future plans to augment their training. Others were content at their current level of training.

Essential Training Topics Wine knowledge and the winery’s story emerged as essential training topics for everyone. All wineries educate staff on their own wines, including background, taste and production process. They also teach staff about wines of the world, or “Wine 101.” A majority of interviewees discussed hospitality or customer service training. Learning the winery’s stories was emphasized by all; however, no one provides required scripts. Information is shared regarding the winery itself—the history and people involved—and the wines, as well as anything relevant to the winery and the surrounding area.

Responsible alcohol service was another popular topic. The Virginia Department of Alcoholic Beverage Control administers winery licenses and regulates alcohol service, with violations resulting in suspensions or license revocations. Due to the reliance of onsite consumption, at least two wineries have security positions to monitor for any potential rule violations, such as bringing outside alcohol onto the winery grounds. Servers still watch for issues, but security staff deal with any conflicts and know de-escalation techniques. Other vital training topics include winery policies and daily business operations. Only a quarter mentioned any type of sales training.

Training Methods Interviewees use a range of activities and materials for training within orientations, pre-/post-shift meetings, standalone sessions or larger staff events (S E E T A B L E ) . Four interviewees discussed having an orientation program, with some offering multi-day, comprehensive agendas.

Training Activities

Training Materials

Courses

Mystery shopping

Discussions

On-the-job training

Field trips to the vineyard

• Serve in role immediately

Games

• Follow phased in approach

Internal instruction • With management, such as general manager, sales manager, tasting room manager

Role play Shadowing

Employee manual Fact sheets • Wine • History • Bios

Staff meetings

Printed sales & hospitality scenarios

Tasting

Resource library

• With winemaker

• General

• With brand ambassador

• Blending

• With consultant

Email updates/ reminders

Videos

• Comparison: internal and external • Mystery bottle

What sets us apart?

All interviewees conduct tasting trainings. In addition to their own wines, most include a selection of international wines for learning and comparison.

One winery allows all staff to participate in the blending process and even offered extra grapes to staff members last year so they could try to make their own wine. Another interviewee shares a mystery bottle at the end of each shift, using that time for education, information sharing and debriefing. At least four wineries regularly use formal classes to provide additional wine education to tasting room staff. Two are certified to teach Wine and Spirit Education Trust (WSET) courses, and one houses the Virginia School of Wine. All wineries have new staff shadow veteran employees for some period of time. Three wineries use on-the-job training as their main approach.

Other wineries use it as one of many methods, either starting staff in the tasting room right away or phasing them in.

Barriers to Training Ten interviewees cited time as the number one barrier to training. In fact, six said it was the one and only barrier. The time issue relates to coordinating resources at the winery with staff schedules—particularly with mostly part-time employees who work full-time jobs during the week.

Finding a time where all or even most staff could attend is the challenge, given the fact that weekends are the busiest time for wineries. Only a few people mentioned turnover and cost as barriers. In some cases, money was proposed as a theoretical barrier but not associated as the winery’s issue.

One interviewee said there were no barriers. Regardless of the challenges, many of the interviewees talked about their commitment to training and how they use a variety of methods to minimize obstacles and prepare staff.

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WBM July 2017 81

Perspectives on Tasting Room Staff Training

Recommendations

Leverage Existing Resources

With the competitive wine tourism environment and strong reliance on DTC channels, wineries must consider all avenues to help tasting room staff create memorable experiences for visitors, which will foster a full range of benefits for wineries, including, but not limited to, sales. This is particularly true for small- to medium-sized wineries, where tasting room staff are the primary—or in some cases only—customer-facing representatives. Large wineries can also benefit as tasting room visits are often the first exposure visitors have to a winery and its wines, and DTC sales offer the highest profit margins. As a result of this study, the following strategies and tactics are offered: perform an annual training assessment, leverage existing resources and use technology.

There are many best practices that can strengthen training programs despite the barriers.

Perform an Annual Training Assessment Leadership should conduct an annual training philosophy and program evaluation. Reviews should consider topics covered or lacking—with special attention paid to hospitality and professional sales—and methods used. Actions should be taken to address gaps and maximize engagement and learning.

START WITH A STRONG ORIENTATION

A robust onboarding process provides new staff members the greatest chance for success. In addition to providing information on the winery’s policies, protocols, procedures, systems, history and wine, supervisors could provide suggested talking points and potential sales and hospitality scenarios.

One simple and effective approach to prepare staff for appropriate, targeted sales tactics is to provide them with initial questions to engage and assess a customer with corresponding follow-up strategies. Training could include interactive techniques to demonstrate and reinforce lessons, such as role play.

A phased-in approach, exposing staff to the different aspects of the tasting room or entire winery, can offer a holistic understanding to tasting room staff and allow them to tell the winery’s story from a first-hand perspective.

Supervisors could consider requiring staff to visit other wineries, whether in a mystery shopper role or openly preparing for work. Upon return, staff would reflect on the experience, whether in a questionnaire or a discussion, to reinforce important lessons and the winery’s philosophy.

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82 July 2017 WBM

WINES VINES ANALYTICS

COMMUNICATE REGULARLY

Supervisors should communicate regularly with staff, providing updates, reminders and helpful resources. A winery could establish a knowledge management system so employees can easily find information. An online forum could be established for staff members to post question, discuss best practices, and share real-life scenarios, successes and professional or personal news with each other. This could build community, particularly with wineries that have large numbers of part-time staff who may not see each other often.

COMBINE TRAINING WITH SOCIAL EVENTS AND TASTINGS

Many wineries use pre- and post-shift time for debriefings and updates.

However, it is not the best time to hold substantive training as there is usually too much to do and not all staff members are at every shift. Combining in-depth training with social events or tasting sessions could minimize scheduling issues and maximize attendance.

SCHEDULE TRAINING AND FOLLOW UP

Even with scheduling challenges, training should still be held. Wineries should schedule sessions with ample advance notice and maintain a regular schedule so attendance expectations are clear and anticipated. Information should be sent to everyone, after every training session, to share key lessons with those who did not attend and offer reminders to those who did.

Methodology Virginia’s wine industry was slow to recover after the repeal of Prohibition, home to only six wineries in the 1970s and 46 in 19952. In 2016, there were more than 285, making Virginia the fifth largest state in number of wineries.

It also ranked fifth in terms of grape production, producing 8,682 tons from 3,171 acres in 20153,4. The industry relies on agritourism, fosters an on-site consumption experience and hosted more than 2.3 million visitors at Virginia wineries in 20153.

Northern Virginia is a region that comprises Arlington, Fairfax, Fauquier, King George, Loudoun, Prince William, Stafford and Spotsylvania counties, and the independent cities of Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas and Manassas Park.5 In 2015, the region produced 3,113 tons of grapes from 1,192 acres4. By 2016, it hosted at least 92 wineries.

In-person interviews were conducted at 12 Northern Virginia wineries from November-December 2016 (S E E T A B L E ). Owners were interviewed at six of the wineries and operators at the remaining six. Wineries were selected using judgment sampling6, including wineries that opened as early as 1988 and those as recently as 2014. A range of tasting room models was represented, with differences in opening hours and days, wine tasting and food selections, tours and special events. All have wine clubs, with some offering additional options, including barrel ownership and special site access.

Winery

Case Production (2016)

Direct-toConsumer Sales (%)

Wine Club Membership

Full-time Tasting Room Staff

Part-time Tasting Room Staff

Total Tasting Room Staff

1

1,000

80

65

0

5

5

2

1,200

97

150

0

14

14

3

1,200

100

1,100

3

6

9

4

2,000

95

1,300

2

6

8

5

4,000

80

2,000

0

7

7

6

5,000

99

2,000

3

22

25

7

7,000

85

200

2

43

45

8

11,300

98

750

6

70

76

9

12,000

95

1,800

6

44

50

ONLINE EDUCATION

10

12,000

99

3,500

12

68

80

Sophisticated software exists for online courses, offering convenience and interaction for participants and instructors. Examples include applications used by Coursera and edX—the latter hosting on an open-source platform.

A winery, group of wineries or industry group could create and administer online training courses for tasting room staff and other winery personnel.

11

13,000

100

2,000

4

56

60

12

15,000

90

1,500

2

28

30

Use Technology Given the scheduling and structural challenges of tasting room employment, wineries should consider opportunities to integrate technology into their training programs.

VIDEO TRAINING

Purchased or proprietary videos are helpful training tools. To create their own, wineries could record already-scheduled trainings or make customized productions. Videos can be viewed during organized sessions or at an employee’s convenience. One winery uses ShiftPlanning software for scheduling, which offers a programming component to upload videos and track usage and completion. Another option is a private YouTube channel.

References 1

ClickSoftware (2016), “Top 25 Best Examples of Gamification in Business.” Available from: www.clicksoftware.com/blog/ top-25-best-examples-of-gamification-in-business

2

McIntyre, D. 2012, “Virginia wine industry has boomed since 2005.” Available from: www.washingtonpost.com/blogs/all-we-can-eat/post/virginia-wineindustry-has-boomed-since-2005/2012/02/03/gIQAb4IUnQ_blog.html?tid=a_ inl&utm_term=.d9519df3dfaf

3

Office of the Virginia Governor 2016, “Governor McAuliffe Announces Virginia Wine Sales Reach Record High in FY 2016.” Available from: https://governor. virginia.gov/newsroom/newsarticle?articleId=16594

4

Virginia Wine Marketing Office 2016, Virginia 2015 Commercial Grape Report.

Available from: www.virginiawine.org/grape-reports

5

Demographics Research Group 2014, “Virginia’s Regions,” University of Virginia. Available from: www.coopercenter.org/sites/default/files/publications/ RegionalProfiles_28July2014.pdf

6

Research Methodology 2016, “Sampling.” Available from: http://researchmethodology.net/sampling-in-primary-data-collection

GAMIFICATION

Gamification is an advanced technology-based approach for learning used by big and small organizations, such as Samsung, Verizon Wireless, The World Bank, the U.S. Army and the Washington State Pierce County Library System1. A simulation game could be produced, like FarmVille or the wine-focused Vinoga, for tasting room staff to play within the same winery or against staff members at other wineries. Staff could practice hospitality scenarios, try sales tactics and learn about tasting room management while having fun and gaining rewards. WBM

WBM July 2017 83

sales & marketing

Designer Sets Out to Simplify Packaging Purchases New online marketplace allows winemakers to purchase bottles and closures on their own time—and receive their purchases in a timely manner.

WHEN WEB DESIGNER EMMANUEL

Le Graet moved to California

two years ago, he had the opportunity to speak with winemakers—a virtue of his location. In these conversations, he learned a little bit more about the challenges winemakers faced, whether in the vineyard, crush pad or on the bottling line. What he found, particularly when it came to packaging, startled him.

“I realized the lack of transparency of vendors, especially in the packaging sector, with little information online,” Le Graet said. “I think the winemakers need to focus on wine and get perfect packaging quickly, without entering long back-and-forth communications, and allow them flexibility to order on their schedules.”

84 July 2017 WBM

Offering Ease of Ordering Traditional equipment or supply purchasing requires a lot of hand-selling by vendors. A winemaker seeks out a company, a vendor arranges a meeting to show off the product and offers a sample or two, and there’s some negotiating on price. The winemaker then repeats the process again with another vendor to compare wares and costs and, hopefully, comes to a decision quickly and places the order.

Le Graet set out to make it easier on the winemaker, especially for those who are making last-minute purchases, usually due to the realization that the year’s production is going to be a bit larger than expected. And so he created Bottle Express (www.bottle.express), an online portal that allows winemakers, as well as brewers, distillers and others, to purchase bottles and closures on their own time—and receive their purchases in a timely manner.

“Anyone can buy packaging at any time, day or night,” he said. “Customers can re-order past purchases easily from their accounts, and can even order samples before buying a full palette.”

His online marketplace strives to have any and all information a purchaser would need available on the product page—everything from bottle finish,

weight and diameter to the palette weight and reviews from past users. He also wanted to make sure customers knew exactly where the bottles were coming from, how much they would cost and how many palettes were available for purchase. A live-chat feature allows customers to ask for help as well.

The goal is for full transparency in the product and the process. According to Le Graet, he will only source from vendors known for excellent quality and willing to have their company name and information included in the product listing.

“There are other websites that allow you to buy online now, but they do not say where the glass comes from,” he said. “The customers won’t know what to expect.”

He works closely with the carriers to make sure his customers can compare truck/shipping prices and know the date the purchase will arrive. With 48 hours’ notice, local customers can pick up their orders directly from his Benicia, Calif. warehouse as well.

Super Glam

The Full Package Product selections are not just limited to the wine industry: Le Graet offers glass and closures for the beer, cider, spirits and food and soft drinks industries. Verallia is his main source for the glass and he works with three closure suppliers to provide a full range of options for customers; everything from standard to premium or differently shaped bottles as well as corks, screw caps, crown caps, bar tops and more. Bottle Express also options for bulk ware, case ware and large format bottles.

The offerings so far have caught the attention of winemakers. Le Graet reports more than 10,000 page views since launching at the beginning of the year. “The requests online have been quite surreal,” he said, noting that he’s had a few international requests, including from South African winemakers.

With such interest, he hopes to continue to expand his product offerings, though never at the expense of quality, he said.

“I want to focus on local needs for local customers. I’ve found that nearly half of my customers come from the East Coast, so I plan to expand there.”

Currently, most of his products are stored in Benicia, though a note is made on the website if a product is not available from that location.

To better serve his customers, Le Graet hopes to one day become a one-stop, transparent shop for all packaging needs. WBM

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Samples/Quotes

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WBM July 2017 85

sales & marketing

Growth Continues in California-appellated Wines More multi-region, California-branded wines are hitting the market than ever before Liza B. Zimmerman

Liza Zimmerman has been writing, educating and consulting about wine and food for more than two decades.

She is the principal of the San Francisco-based Liza the Wine Chick consulting firm and regularly contributes to publications such as Wine Searcher, DrinkUpNY and Beverage Media. She has also worked almost every angle of the wine and food business: from server and consultant to positions in distribution, education, event planning and sales. She has visited all the world’s major wine-growing regions and holds the Wine & Spirit Education Trust Diploma (D.W.S.), the three-year program that is the precursor to the Master of Wine.

of the national consumer base continues to buy high-end, region-specific wine, many retail operators are seeing an uptick in the number of brands being sold under the generic “California” appellation.

From box wine and house wines-by-the-glass to corporate stalwarts, such as McManis Family Vineyards and Mark West Wines, the category continues to pick up traction across a variety of sales venues.

Several distinct segments are part of the generic, California-appellated wine market, according to Christian Miller, the proprietor of Berkeley-based Full Glass Research. According to Miller, these include old-fashioned valuepriced, generic “jug” reds, often sold in boxes; the new wave of red wines and a smaller segment of white blends; long-established, mass-market, varietal brands priced from $5 to $12 a bottle; and higher-priced, varietal blends from Coastal appellations often blended with some Lodi fruit.

These categories all represent very different segments of the wine market.

“Consumers in each of these [markets] only partially overlap,” Miller noted.

WHILE A SMALL SLICE

Consistency is Key Approximately 70 percent of the grapes grown in California are grown in regions that primarily produce California-appellated wine, according to Steve Fredricks, the president of Novato-based Turrentine Brokerage.

The bulk of the wines produced in this category come from major corporate entities, such as E&J Gallo, Constellation Brands and Delicato Family Vineyards, he added. Fredericks said that part of what drives the category is the growth in private-label brands, bottled and boxed supermarket value brands and a need for consistent by-the-glass and house wine pours at chain restaurants.

Grapes used in the production of these wines tend to be from warmer-climate regions in the Central Valley, such as Clarksburg, Lodi and Modesto, he said. The steady supply of grapes from a range of appellations is often

86 July 2017 WBM

used to round out blends and maintain a consistent housestyle, much like what is done for Port and Champagne.

Turrentine’s market update, published in March of this year, noted that the number of grape tons sourced from the Lodi/Delta area of Cabernet Sauvignon and other grape varieties was on the rise. It reports the crop of Cabernet Sauvignon was up 28 percent over the five-year average and 16 percent over the five-year average for all varietals in Lodi.

“Look at Meiomi, most of Joe Wagner’s wines, the Barbara Insel notes that using fruit from Dave Phinney Wines—all of a variety of appellations gives producers which fly off the shelf—and much more flexibility. most are non-appellation or just California-appellation wines,” added Barbara Insel, president and CEO of St. Helena-based Stonebridge Research.

Most of these wines, she said, sell for up to $20 or $25 per 750 ml. “Basically, at those price levels, customers don’t ask about terroir, appellation, etc. They look for consistent taste of a style they identify with that brand.

Making non-appellation wines allows that strong brand to scale without worrying about availability of a specific appellation’s grapes and thus gives them more control over pricing and margins...[as] they are not captive of a certain region,” Insel said.

Customers, Retailers Open to California Appellation Both the producers and operators that I spoke to said that their customers were open to, and interested in, these wines if they fit into price point and taste profile expectations. They added that these types of wines also allowed the state of California to effectively market its brand consistency and value in export markets, where small-production Napa and Sonoma brands are often in short supply and costly.

Many also said that sourcing grapes from a variety of appellations has allowed many of these big-ticket brands to retain a consistent flavor profile, along with competitive pricing. It is a marketing tactic long-used by iconic regions in Europe; however, despite its success in those regions, it is less than clear if the U.S. consumer understands or cares about a focus on a homogenous “house style” of wine.

Using fruit from a variety of appellations gives producers more flexibility, said Insel. She added that many of the wines are marketed in retail as mid-priced, “but several of these brands—mid-price Red Blends—are popular on-premise, especially in chains and mid- to higher-end steak houses.”

Using a California appellation allows for continuity with the brands, concurred Joan Kautz, co-owner of Ironstone Vineyards. For one of the producer’s brands, Leaping Horse, “‘Declassifying’ some fruit will help us maintain a long-term supply with the consistent quality Kautz says that California is customers expect from this label,” becoming better known for quality she noted. across all price points.

She added that U.S. consumers are continuing to learn more about different domestic AVAs and areas such as Lodi, where many grapes are sourced for generically appellated wines—as well as high-end labels—are growing in popularity. “With the exception of Napa and some Sonoma wines, consumers do not necessarily know other AVAs; thus a California appellation can be advantageous and provide security to the consumer that they are buying a great wine at a great price,” she observed.

The Value Proposition The Champagne, “house-consistent” wine model has continued to reassure consumers that they are getting a reliable product when they buy certain entry-level wines. “We rely on a message of house-style and consistency, much like non-vintage Champagne,” said James Varner, co-owner of Menlo Parkbased Varner Wines, which produces wines from multiple appellations.

At three-location Healthy Spirits wine shop, wine buyer John Wight uses the same approach and shared that he has also had success selling generically labeled French, Australian and Chilean wine. He said that his customers like the consistency of flavor and the value price point. He carries six California-appellated wines that are priced from $13.99 to 18.99 for a 750 ml bottle. Some of these wines, from both California and Europe, are among his best-selling wines.

“A majority of my customers are looking for a drinkable wine for tonight within a certain budget.

They seem to care more about the grape or the brand and the price point, or my recommendation … [and] they want it to fit their perceptions or expectations of the wine,” he noted.

Some operators think the consumer may not know or care much about appellations when they are buying wine at the under $10 to $18 price point. “Shoppers are all different: some care, others don’t, most don’t care to know,” added John Wight Erez Klein, the Pacific Northwest wine buyer for Whole Foods Market.

The majority of house wines at many restaurants are also not likely to be from a single AVA, according to a California wine executive, who declined to comment on the record. He added that of the 675,000 acres of Chardonnay that were crushed in 2016, more than half of those came from the Central Valley.

One of the reasons that operators’ customers may feel comfortable buying these wines is that their quality has been consistently improving—both in the vineyards and the winery—according to Fredricks and Turrentine Brokerage’s report. “Bulk wine buyers across all price points and regions have [their] choice of lots due to more volume for sale, which has led to increased quality standards and offering prices that are generally lower than last year,” stated the report.

“There is no doubt that vineyards are producing better-quality wine than they did decades ago. History has proven that appellations can shift, as long as quality and style remain the same.”

Steve Fredricks

What the Future Holds What will drive interest to this category? The answer is likely an improvement in local wine production, allowing for the international wine marketing machine to promote “Brand California.”

“California is becoming better known worldwide for quality wines at all price points,” said Kautz.

“There is no doubt that vineyards are producing better-quality wine than they did decades ago,” Fredricks said. “History has proven that appellations can shift, as long as quality and style remain the same,” he shared.

AVAs may matter to the sommelier or the gatekeeper; however, consumers may not care, added the wine executive. The distribution model of wine brands is what is most important, he noted and perhaps, sadly, what is in the bottle may matter far less.

“I think we will continue to see this growth. Most people want a wine they can drink now with enjoyment and not have to wait several years,” added Wight. WBM

WBM July 2017 87

sales & marketing

Retail Sales Analysis

Off-Premise Wine Sales Increase 6 .1 Percent sales increased 6.1 percent from the same period of the previous year in the four weeks ending April 22, 2017, according to Nielsen-tracked data. In the 52 weeks ending April 22, wine sales increased 3.5 percent.

Domestic wine sales increased 5.9 percent while imported wine sales increased 6.4 percent in the four weeks ending April 22. In case volume during that same period, domestic case volume increased 3.4 percent and imported case volume grew 3.9 percent.

The French, New Zealand and Italian categories lead the growth for imported wines: French wines are up 25.5 percent in sales and 21.9 percent in volume; New Zealand wines are up 15.8 percent in sales and 15.5 percent in volume and Italian wines are up 8.9 percent in sales and 7.1 percent in volume. Sales and case volume for wines from Argentina, Spain and South Africa decreased in the four weeks ending April 22.

Sales for wines in the more than $20 price point segment had the most growth, increasing 17.6 percent in sales and 17 percent in volume in the four weeks ending April 22.

The remaining premium price point categories had fair growth in the four weeks ending April 22: the $9 to $11.99 segment grew 7.9 percent in sales and 8.3 percent in volume; the $12 to $14.99 segment increased 9.7 percent in sales and 8.8 percent in volume; and the $15 to $19.99 segment, the usual

OF F- P R E M I S E T O TA L TA B L E W I N E

$millions

growth leader, grew 12.9 percent in sales and 12.1 percent in volume. Sales and case volume for all wines priced between $0 and $2.99 and $6 and $8.99 dropped.

By Varietal RosĂŠ table wine above $7.99, as a category, saw an 84.2 percent increase in sales and an 87 percent increase in volume in the four weeks ending April 22. The category holds just a 0.9 percent market share in sales and volume.

Blended table wine, as a category, is up 8.6 percent in sales and 6.6 percent in volume in the four weeks ending April 22 and holds a 14.3 percent market share in sales and a 14.7 percent market share in volume. Of all the blended table wine, blush leads the growth. In sales, blush blended table wine sales are up 66.9 percent, and volume is up 55.9 percent.

Red blended table wine is up 8.3 percent in sales and 6.8 percent in volume, and white blended table wine is down 0.9 percent in sales and up 3 percent in volume.

Chardonnay, the largest selling varietal by case value and by volume on the market, holds an 18.4 percent market share in sales and a 19.1 percent share in volume in the four weeks ending April 22. During that period, Chardonnay sales were up 3.9 percent and volume increased 1.9 percent.

Total Table Wine (last 13 4-week periods)

1,400

2016

2017

1,200

1,000

Year Ago

800 04/23/16

05/21/16

Source: Nielsen. 4 Weeks Ending 04/22/17

88 July 2017 WBM

06/18/16

07/16/16

08/13/16

09/10/16

10/08/16

11/05/16

4 W EEK S EN D I N G

12/03/16

12/31/16

01/28/17

02/25/17

03/25/17

04/22/17

Cabernet Sauvignon increased 8 percent in sales and 5.4 percent in volume.

Cabernet Sauvignon was the second top-selling varietal on the market in the four weeks ending April 22, representing 17 percent of all wine sales and 14.2 percent of case volume.

Sauvignon Blanc, Pinot Noir and Pinot Grigio/Gris also had good growth.

Sauvignon Blanc grew 12.4 percent in sales and 10.9 percent in volume; Pinot Noir grew 7.5 percent in sales and 5.3 percent in volume; and Pinot Grigio/ Gris grew 7 percent in both sales and volume.

Sales and volume for Malbec, Merlot, Syrah/Shiraz, White Zinfandel and Zinfandel have all decreased in the four weeks ending April 22. WBM

Gomberg, Fredrikson & Associates Market Research For The Wine Industry

We perform extensive market research and data collection to create the wine industry’s leading databases and reports

Products include: • The Gomberg-Fredrikson Report: “The Executive Marketing Report of the Wine Industry”

Nielsen Table Wine Category Segments

• WineData Wine Pricing Report: Competitive supplier pricing for more than 13,400 products

U.S. Expanded All Outlets Combined Plus Liquor/Convenience/AAFES Dollar Volume

weeks ending: April 22, 2017

PERCENT CHANGE vs. YEAR AGO 4 WEEKS ENDING 04/22/17

52 WEEK ENDING 0422/17

4 WEEKS ENDING 04/22/17

52 WEEK ENDING 04/22/17

3 .5

TOTAL TABLE WINE

$1,060,814,773

$13,838,763,553

6 .1

TABLE WINE 187 ML

$22,680,847

$286,904,195

3.9

3.1

TABLE WINE 375 ML

$1,617,531

$18,942,637

31.0

24.3

TABLE WINE 750 ML

$754,682,421

$9,834,703,012

7.0

4.0

TABLE WINE 1 L

$2,777,228

$36,504,343

16.2

12.2

$172,238,027

$2,275,875,002

0.9

(1.0)

TABLE WINE 3 L

$46,997,638

$602,242,044

13.3

12.0

TABLE WINE 3 L BOX/BARREL

$41,409,531

$526,558,809

17.8

16.2

$5,576,421

$75,576,975

(11.8)

(10.8) (5.5)

TABLE WINE 1.5 L

TABLE WINE 3 L GLASS TABLE WINE 4 L

$7,323,214

$98,822,989

(3.8)

TABLE WINE 5 L

$38,786,412

$517,210,781

(0.2)

(0.5)

$1,183,371

$18,520,272

163.9

356.1

TABLE RED WINE

$542,644,043

$7,138,792,405

5.4

3.5

TABLE WHITE WINE

$450,816,304

$5,866,121,790

5.4

3.0

$66,318,563

$828,663,946

15.5

8.3

DM TABLE WINE

$773,146,919

$10,115,844,387

5.9

3.9

IMP TABLE WINE

2.6

TABLE WINE REM SZ

TABLE BLUSH

$287,667,851

$3,722,919,151

6.4

ITALIAN TBL

$94,840,297

$1,243,244,574

8.9

4.2

AUSTRALIAN TBL

$54,189,400

$713,760,057

1.1

(2.7)

NEW ZEALAND TBL

$32,750,104

$404,061,758

15.8

13.4

ARGENTINE TBL

$29,259,735

$397,097,689

(2.9)

(3.8)

FRENCH TBL

$28,072,966

$355,567,828

25.5

15.7

CHILEAN TBL

$21,318,423

$266,865,810

0.6

(5.5)

SPANISH TBL

$12,067,947

$165,266,250

(6.1)

2.5

GERMAN TBL

$6,608,089

$89,025,415

3.0

(6.4)

PORTUGUESE TBL

$2,139,593

$30,588,508

4.6

8.8

SOUTH AFRICAN TBL

$1,969,327

$27,765,933

(9.2)

(1.7)

A/O IMP COUNTRY TBL

$4,451,975

$29,675,442

6.1

0.1

VARIETALS

$900,379,513

$11,755,460,262

5.4

3.2

GENERIC

$160,435,259

$2,083,303,282

10.2

5.4

CHARDONNAY

$195,376,078

$2,536,690,481

3.9

2.0

CAB SAUVIGNON

$180,359,768

$2,347,453,261

8.0

5.8

BLENDED TABLE WINE

$151,210,508

$1,987,690,579

8.6

8.0

$126,982,037

$1,672,868,061

8.3

8.6

$11,651,961

$147,579,379

16.8

12.5

$19,321,997

$263,070,929

0.9

(1.5)

$4,871,666

$51,661,259

66.9

59.6

PINOT GRIGIO/GRIS

$95,400,314

$1,238,820,894

7.0

3.7

PINOT NOIR

$77,697,741

$1,014,691,043

7.5

6.4

SAUVIGNON BLANC

$67,207,681

$842,674,184

12.4

10.8

MERLOT

$60,630,031

$806,011,349

(1.8)

(4.9)

MOSCATO/MUSCAT TBL

$55,312,080

$731,500,153

7.1

3.3

WHT ZINFANDEL

$24,175,088

$323,591,236

(3.2)

(5.0)

MALBEC

$21,026,551

$280,353,639

(1.2)

(2.0)

RIESLING

$19,865,817

$262,753,029

5.2

(2.3)

ZINFANDEL

$17,212,903

$229,417,590

1.8

(2.8)

ROSE TABLE 750ML BE >7.99

$14,483,283

$154,675,642

84.2

61.7

$9,534,863

$128,157,728

(6.0)

(10.6)

GLOBAL TBL BE 0-2.99

$59,198,502

$784,431,197

(1.6)

(2.5)

GLOBAL TBL BE 3-5.99

$316,776,869

$4,174,359,583

2.4

0.9

GLOBAL TBL BE 6-8.99

$115,056,009

$1,547,449,237

(1.3)

(3.7)

GLOBAL TBL BE 9-11.99

$250,317,815

$3,222,155,121

7.9

5.7

GLOBAL TBL BE 12-14.99

$145,644,673

$1,877,694,334

9.7

8.1

GLOBAL TBL BE 15-19.99

$95,371,012

$1,215,455,938

12.9

10.5

GLOBAL TBL BE >20

$76,323,044

$1,012,651,994

17.6

8.7

BLENDED TABLE WINE RED SWEET RED BLENDS BLENDED TABLE WINE WHT BLENDED TABLE WINE BLUSH

SYRAH/SHIRAZ

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Source: Nielsen

WBM July 2017 89

Off-Premise Wine Sales Increase 6 .1 Percent

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technology & business

Wineries Reap Profitable Benefits with CRM Software After dealing with the initial expense and timely start-up pitfalls of installing customer relationship management software packages, three winery executives relate how their companies are experiencing greater employee productivity, improved customer sales and satisfaction and increasing profits.

Michael S. Lasky

told me customer relationship management (CRM) isn’t a software package, it’s a strategy,” said Jeff Zappelli, general manager at Walt Wines (division of Hall Wines).

Yes, it is a strategy—just one that happens to operate with a chosen software package.

Customer relationship management (CRM) is an approach to managing a company’s interactions with current and potential future customers by analyzing data about a customer’s history with the company to enhance relationships, focus on retention and, ultimately, drive sales growth.

To achieve this, CRM software packages aggregate customer information in one place to give businesses easy access to contacts, purchase history and any previous contact. This data supports employee interactions with customers, anticipates their needs and tracks sales performance goals. A CRM software’s main purpose, then, is to make customer interactions more efficient and productive while seamlessly integrating existing software already in use.

“A

WISE

MAN

ONCE

CRM is an approach to managing a company’s interactions with current and potential future customers by analyzing data about a customer’s history with the company to enhance relationships, focus on retention and, ultimately, drive sales growth.

Wine Business Monthly wanted to know just how wineries arrived at their

CRM solution purchases, why each was the right fit for the winery and how the systems helped them achieve any promised efficiencies. To find out the answers we asked Walt Wines’ general manager Jeff Zappelli, Miner Family Wines’ DTC business development and membership manager Laila Subaie and Seghesio Winery’s director of consumer sales and marketing Stephanie Friedman (formerly in the same role at Gary Farrell Vineyards & Winery).

All three previously spoke about their CRM experiences at the 2016 Wine Industry Technology Symposium (WITS).

92 July 2017 WBM

Michael S. Lasky is the former editor of AppellationAmerica.com and is the author of hundreds of articles for national magazines and newspapers.

Selecting the Right CRM Solution— Planning and Patience At Walt Wines the process to find the right CRM software began back in 2008 while still under the Hall Wines brand, according to Zappelli. “There were maybe 14 people working in sales and marketing and hospitality. We all sat down and scripted out our ideal RFP (request for proposal). We walked through what we thought our vision was, considering that 90 percent of the people meet us through visiting the tasting room. What’s their take away?

What’s the messaging they received after their visit?” asked Zappelli. Out of this and other scenarios, they produced four scripts: one regarding an initial brand introduction and others describing how the winery should move them through a ”customer journey.” A major consideration, of course, was the expense. “We looked at Microsoft solutions, Salesforce and Oracle CRM. We were only looking at enterprise-level software and whether we could tie their packages with our current operation and sales systems. We saw immediately saw the cost savings of not having to invest in a lot of infrastructure as far as hardware servers, getting started with those servers and the cost to maintain them,” said Zappelli.

“Accordingly, software that operates in the cloud made perfect sense to use, and we ended up going with Salesforce.com’s CRM package. A lot of CRMs are set up similarly. The difference with Salesforce was the ability to plug into and integrate with so many different existing systems so quickly. We’ve been able to integrate our two different email marketing systems. We’ve been able to integrate two different website platforms. What it allowed us to do is stay on top of technology as technology evolves and plug in new systems that give us a lot of flexibility,” he said.

Zappelli’s advice to wineries considering a move to a CRM package is to be aware that patience is required. “The genius of CRM is it’s not perfect when it starts. If you have a good strategy for the data you want to put into the system, then it evolves over time as more and more data is entered in. We’ve been with Salesforce for nine years now. We would say it’s invaluable for our membership teams. They can see long histories and lifetime values. They can tell you what their top wines are, what their customers’ most popular wines are. We can run reports and campaigns against groups of customers or just individuals in order to target our top 100 buyers.”

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Wineries Reap Profitable Benefits with CRM Software

Mining the Collected Customer Data with CRM Reduces Costs, Rains Profits It was a somewhat similar scenario for Miner Family Wines when they decided to find a CRM solution that was the right fit for the winery’s needs.

“We looked at five or six different packages but what decided us was the one that did as many of the functions now as was possible. In our search, we found that all of these software companies will tell you they’re going to develop this, and they’re going to develop that. Our choice really came down to who was offering what we needed when we needed it. For us, it was really strong customer management, equally strong reporting and inventory control,” said Subaie.

The application that Miner Family Wines chose, Missing Link Networks’ eCellar Solutions, allowed the winery to cancel contracts with other vendors because it was more of an all-inclusive program. “It’s a cloud-based application, which happened to be the number one requirement on our wish list. We have so many people on the road and working from home that it was vital for everybody to have access to the same information, no matter where they were,” she said.

“We have so many people on the road and working from home that it was vital for everybody to have access to the same information, no matter where they were.”

Laila Subaie

As head of DTC development and manager of the wine club business, Subaie said no matter which CRM package was adopted, club processing had to be strong. “We have a very big wine club here, and we’ve liked the flexibility of the wine club processing module. We handle a lot of custom shipments; and although they don’t have a customization module, the way the system is set up makes it very easy for us to customize the orders anyway.”

Another function Miner Family Wines wanted was a robust customer management program that allowed the company to eliminate a separate e-commerce provider. “We felt that the e-commerce platform with eCellar was just the solution. Now we can not only manage all our customers but also generate reports to target customers more specifically than we had in the past. Our aim was to consolidate all our data into one platform. We don’t have to integrate our pre-existing tasting room POS system into eCellar. It is our POS system now,” said Subaie.

The versatility of Miner Family Wines’ adopted CRM extends to its ability to work on tablets, which allows the winery to perform a transaction via the Square app without disrupting a customer’s experience. For them, customers should be able to interact with the winery easily and on their own terms. “CRM has also made a major difference for our online customers.

We previously didn’t have the capability for a customer to update their own account online, and now they’re able to do that. It kind of puts the control back on them. We’ve seen our declines go down because of it,” she said.

Of course, once the CRM software has collected enough data, entered both automatically and manually, patient wineries will start to see the positive results. “It saves us a ton of money not only in time and vendor fees, but it’s also helped us really catapult sales too because, again, it’s a much easier user interface for the customer on the web store. We’ve seen a hefty increase in those web sales as well, instead of people abandoning their cart because they can’t figure out if the discount was wrong or what have you,” Subaie noted.

94 July 2017 WBM

Avoid Buyer’s Remorse by Thoroughly Vetting the CRM Package’s Migration Capabilities The appeal of just one of a CRM package’s features can sometimes sway wineries to adopt it—but one feature does not necessarily make it a complete, consolidating system. That’s what Gary Farrell Vineyards & Winery experienced when the winery purchased a CRM system that did not integrate into its pre-existing software systems.

Prior to Stephanie Friedman’s arrival at Gary Farrell as the director of consumer sales and marketing, the company had decided on bLoyal as its new CRM system. “The biggest reason that bLoyal was chosen was because of its loyalty program, where you could assign points for dollars and such. That was a big discussion at the time because of the success that loyalty programs had in other consumer products. The feeling was how that could be effective in the wine industry,” said Friedman, who is now in the same position at Seghesio Winery.

While bLoyal was considered for how it would integrate with the software the winery already had, one vital feature was missing. The entire back-end— financials, inventory and accounting—was set, but the tasting room POS was not supported at the time. The winery had been using a bolt-on partnership with Microsoft RMS.

“Now we can not only manage all our customers but also generate reports to target customers more specifically than we had in the past. Our aim was to consolidate all our data into one platform.”

Laila Subaie

“RMS worked as a register, but it didn’t integrate with bLoyal. We spent a lot of time and money on fixes. RMS was able to pull customer information from the CRM; so if a customer came in, we could look them up, and we could see their history and such, but for example, we couldn’t charge their card on file because that was stored in the POS, and the POS was its own separate system,” Friedman said.

This caused complications for the staff and customers. “As far as working on the back side with payment gateways, often we would go to fix it in one system, and it would break the system. You had to ‘return to the scene of the crime’ to make sure that you were refunding charges in the proper system, in the proper way; otherwise, it would just hose everything up,” Friedman said.

It was a tasting room model that required more of a mobile point-of-sale application. That, according to Friedman, triggered the conversation of upgrading the CRM and getting all departments of the winery involved to find one that offered full software integration. The company chose Vin65, and it was put into place last year.

“It was fantastic. Every transaction could be performed on an iPad. We could bring the iPad right to the table to help the customer to ring them out.

We could email receipts right there and then. It was all integrated with the CRM. On our administration side, if a tasting room associate had a problem with an order, they could hold it, and then someone in our wine club office or admin office could then pick up that order on their computer, look at it, try to assess what was going on and fix it.

“Because everything was in real time, there was no waiting for everything to match at the end of the day to hit the CRM. You could have every customer’s information and credit card; you could do all of that from any computer or any mobile iPad. The level of service that you could do with that was impeccable, and it was in real time,” she said.

Despite Benefits, Some Wineries Hesitant to Invest Though CRM software can greatly benefit a winery’s bottom line, the long process of choosing, installing or upgrading a system can be cause for concern.

“I think wineries often live with what they have because, let’s face it, technology can be scary. Learning new systems can be scary,” stated Friedman.

“There is a real cost to adopting a CRM system in terms of money, time and effort. I was project managing that transition from bLoyal to Vin65, and that was a full-time job for the period that I was doing that, making sure that the data was being migrated with integrity, that we were setting up the new system based on how we were using the old system. I think a lot of times you talk with a CRM provider, and they’ll give you information on all the things the system can do, but it’s up to the winery to understand how it’s going to be done.

“It’s a language barrier in a sense because oftentimes wineries don’t speak that technological language, and the salespeople on the tech side don’t really know how the system works. They just know what it does. You end up then choosing a system, and you realize later it doesn’t quite work the way you thought, or this benefit is only available if you also work with the CRM’s

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other providers, merchant gateways or add-ons. I think it’s a big decision, and I think wineries don’t necessarily have all the answers in how to go about making that decision.”

Added Miner Family Wines’ Subaie: “I think the big mitigating factor is finance. It’s not a cheap process to undertake. We made quite an investment in this program. Not only did we make an investment in the program, but in all the hours that it takes to get all of the managers and frontline staff and everybody in the building trained. It was really something that we thought about for a long time. This process was at least a three-year journey for us: Shopping for the right software, making sure we had the right transition team in place.

“It’s intimidating. If you are at a small winery and you only have 10 employees or so, there are a lot of man hours to get things up and running the way you want them to. You have to repopulate all of your products, the web store, all of that sort of thing, and then you have to learn how to use it because now we have all those great tools at our fingertips. Well, what are you going to do with that stuff?”

And again, as Jeff Zappelli said, “A wise man once told me CRM isn’t a software package; it’s a strategy.” He’s right: it is a strategy to find the CRM system that’s the right fit for the winery, and a long stretch that takes lots of patience—and money. WBM

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technology & business

New York Winegrowers from East to West Ponder Decisions Made Notables from Long Island and the Finger Lakes share the ups and downs of a life’s work.

David Furer David Furer writes, consults and teaches about wines of the world from his New York City base.

residence has allowed me time with many fascinating people who make cool-climate wines. A challenge to keeping one’s cool, and professional vision, sometimes lies in developing business strategies that at the outset seem simple yet positively affect quality, profit and day-to-day stresses. In newer regions, like the Finger Lakes and Long Island, the decisions an owner or winemaker makes are even more important in establishing a strong foothold. Here, six winemakers share their histories and the thought processes behind their successes and failures.

M Y N E W, N E W YO R K

Roman Roth Winemaker/Partner, Wölffer Estate Best Decision: My best decision in winemaking was in 1992 when I moved

from Germany to Long Island when it had only 12 wineries. The library at Germany’s Weinsberg wine school told me that in 1975 there was only one winery there—an unproven and unknown wine region. It was a leap of faith, and I don’t regret a moment of it. There were no established rules so I could grow Chardonnay, which wasn’t allowed in Germany at that time. The risktaking allowed me to try new things: a verjus and the first dry Rosé, as well as the freedom to make a wider variety of wines than had I stayed in Germany.

Christian Wölffer lured me by saying that Manhattan was 30 minutes away and telling me to buy whatever I needed to make the best wines possible. He always helped me by saying “let’s go for it” and encouraging me to take risks, knowing that if we made a mistake, it “wouldn’t be the end of the world.” I did the first Amarone-style wine in New York in 2005—probably the best wine I’ve ever made—and again in 2010 and 2014. The backing and support to go forward in dropping fruit to 1 to 2 tons per acre in 2000 were astonishing; people were saying we’d lost our mind, but these first efforts were sold out upon release. In Germany it’s much harder to take so many risks.

Worst Decision: When we started in 1992, our vineyards were young, so we

made a light, elegant, summery Chardonnay named for Christian’s father. It was a big success. Yet our young red vineyards were worked to harvest late, so we made a second-label Merlot that would be ok but nothing to write

96 July 2017 WBM

home about—nervy and racy. But the market wasn’t ready for this, so we backed off our inventory so as not to have the second label drive all sales.

At the time, I was also general manager, so I was really looking at numbers.

Our sparkling and white cuvées were listed at Alain Ducasse’s restaurant in Manhattan, so I took this second label red to Ducasse—the pinnacle of bad decisions! We had to change our red winemaking, deciding that we should never make this sort of wine. We spent time and money developing our red grapes by dropping more fruit and eventually making better wine. It helped us over time, and now we’ve a reputation for making good reds also. It’s something you never stop learning as you age.

James Christopher Tracy Winemaker/Partner, Channing Daughters Winery Best Decision: Having read previous iterations of this, I love paradox. I love

Sparkling Pointe Vineyard

Gilles Martin Winemaker, Sparkling Pointe Best Decision : The best decision that we made was to be involved in

producing only traditional method sparkling wines. The unexpected approach was two-pronged. I was first involved with the house of Roederer in California, fleeing the Anderson Valley in 1996 to work for Deutz in Champagne (and to unknowingly discover my wife) while the owner of Sparkling Pointe chose to create a brand solely dedicated to the production of sparkling wines. We were able to occupy a niche market in this new area of Long Island, with my creating wines that consistently led us to receive high press marks, beginning in 2009 with the San Francisco Wine Chronicle. This helped not only us but Long Island overall in a market unaccustomed to top wines from New York. In being close to NYC it was important to Sparkling Pointe that we got heavyweight support from Waldorf Astoria Hotel and Eleven Madison Park.

Worst Decision: I haven’t yet made my worst decision, but the reality of being in a young area like Long Island is that we don’t have big and famous houses, such as in Bordeaux or California, to allow us to more readily develop vineyards while simultaneously limiting the volume of wine we’re able to produce. I’m not convinced that this won’t happen, and with climate change this may. We have a small space that’s grown at its own pace over the 20 years I’ve been here…but the limited growth has helped maintain this area’s beauty. I think our next growth phase, albeit a small one, will be to plant more vineyards, though it won’t happen as fast as it has in California.

that some people find the best and worst decisions as the same thing. Equally so, the best and worst decision we made was in having me take on the wholesale distribution myself. The New York state act of 1976 was a huge thing for us. I do all the New York distribution myself, as well as serve as the winemaking partner, something that’s done wonders for the business but created added stress, work and other problems for me. It’s one of the best decisions financially as we’ve made more money on sales, pocketing the 50 percent cut distributors normally take for their services, which allowed us to stay well afloat all these years. As a winery making below the maximum amount of wine that allows it to self-distribute, we’re now able to do the same in Connecticut and New Jersey.

A couple of years ago we started doing it less in New Jersey, getting our license to distribute direct in Connecticut only this January—something this region’s geography supports.

Worst Decision: On the flip side, so much of this business is about rela-

tionships. I want to know where the wines are going, how they’re being paired at restaurants. Being able to take our wines to specific chefs and sommeliers is what so much of our business is about, by creating lasting, pleasurable relationships with our customers and business partners. It’s very gratifying, invaluable to our business, both intangible yet fiduciary.

It helps that we needn’t pay a salesperson because I’m available 24/7 to my colleagues, customers and partners—making it tough on my family and me. We deal with all the difficult logistics surrounding distribution; it adds the necessary but headache-inducing compliance concerns. I’ve learned an immense amount over the years, but it’s been difficult…I’m also inventory manager. Taking the time from my three small children can be tough, but due to the personal relationships I’ve developed with my customers, when we show up to a shop or have a meal out, we’re treated extra-special by our customers as they’re inextricably linked to our lives, both personally and professionally. It’s our life, not our work—both rewarding and frustrating because you cannot escape it. Our sustainability goals are environmental but also economic while encompassing social equity. Real sustainability is a reflection of these three streams.

WBM July 2017 97

New York Winegrowers from East to West Ponder Decisions Made

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New York Winegrowers from East to West Ponder Decisions Made

Fred Frank

Mark Wagner

President, Dr. Konstantin Frank Wines

Owner, Founder, Managing Member, Winemaker, Lamoreaux Landing Wine Cellars

Worst Decision: Our family has had this winery for more than 60 years.

When considering the time spent, the most important decision is vineyard site selection because you’re married to the site. In the Finger Lakes, the weather is critical to quality but also to consistency of yields, which in turn is economically important. In the 1970s my dad looked to purchase land along Seneca Lake following his father, Konstantin, who began along Keuka Lake in 1958. The Keuka site was good in terms of it being on a steep hill alongside a lake with good air-flow and drainage. We never had a spring frost issue, though we did occasionally have damage if the lake froze. Konstantin put a lot of work into researching the site by talking to farmers, asking where the snow first melts. My father wanted to prove to his father his knowledge too.

Fred and Meaghan Frank

Worst Decision: All of us struggle with inconsistencies of packaging materials; working with bottles has never been a perfect thing. Whether you use corks or screw caps, capsules or not, there are issues of application, of making them work. We tried switching on to a new label company last year, but that was a total disaster. It turned out to be easier going back to our former supplier and having them make the necessary changes. The poorest choice I made early on was in not getting a good bottling line. I started with a very inefficient line that I should’ve switched from sooner than I did.

When I did, I thought, “Why didn’t I do this 10 years ago?!” Sometimes packaging issues can be difficult ones, but finding small winery equipment can be tough and not always as good as you’d like it to be.

Best Decision: Starting the winery was my best decision as I’d already been a grower for a long time, producing good-quality fruit. I started making wine in 1986, but buying my original production site allowed me to expand into being a full-on wine producer. There was one property I placed a purchase offer on that I should’ve gone through with but didn’t, and I regret not doing so to this day. However, I soon after purchased a 270-acre property, which turned out very good and from which I got a very good deal, which allowed me to build a winery.

Christopher Bates Co-Owner, Element Winery

The Seneca site he picked along the western side of the lake above the hill from Watkins Glen had a fine old barn but was on flat terrain. Not only was it too far from the lake to benefit from its temperature-moderating effect, its flat land allowed for a pooling of cooler air. Its tendency for occasional spring frost and colder winter temperatures, easily 5 degrees colder than our Keuka Lake site, was a critical difference for bud survival. I kick myself that I didn’t fight him, harder knowing that there were sites on the eastern side of Seneca Lake that would’ve worked better, where we could’ve built a barn to suit him. You can’t change a site’s climatic positioning.

Best Decision: We relied on our Keuka vineyards for most of our production for many years. But when we had a run of cold vintages in the early ’00s, I met with my father, saying we had to get an insurance policy to offset the drop in production. At that time the eastern shore “banana belt” of Seneca Lake around Hector had begun to show itself, and I found what was a perfect site belonging to a group of Cornell University sports coaches, who were going to build homes on this site once they retired. However, in time they moved up into the major leagues and grew willing to sell. They loved the idea of selling to us to keep the land in agriculture, allowing us to outbid a developer who wouldn’t have kept it agricultural. The slope and drainage were perfect. My dad was semi-retired, gave me his blessing to buy it but unfortunately never saw it because his health failed. The site has been great for us, not only in quality but in giving us steady yields even with cold winters. It’s allowed us to grow more tender varietals, such as Gruner Veltliner. This all goes to show how site selection is critical in impacting a 60-year lifespan of the business.

Best Decision: As a very small producer, my need for consistency and reli-

ability is more important than shaving a penny off the label cost. When we started with a mobile bottling line, our wines lasted only until the first bottling, when they re-fermented. That was the moment we decided that “this wouldn’t happen again.” When we schedule a bottling date, we have more people on-site than we do at any other time. If the line’s not functioning properly, we end up paying people to stand around doing nothing, and we’re responsible for them waiting while we tinker around with the line. At that point we decided that we’re not entrusting this again to a machine we’re not fully comfortable with, so we ended up buying Mark Wagner’s. I now troubleshoot and fix anything with this Soviet-style machine on my own.

Worst Decision: Not fully envisioning my branding strategy, not having an

image of who I wanted my customer to be and not fully thinking through my packaging had me six years sifting through the issues of image, label and packaging. I wish I’d developed a clear strategy sooner with someone guiding me through from the beginning. I wasted a ton of money along the way; misordering labels once has you paying for it a long time. I cut corners initially without thinking what my price point was going to be. I thought that charging a dollar extra would pay for the extra $0.07 of packaging.

Then by bouncing around from different bottle suppliers, I ended up with different specs on my bottles, meaning that I needed different height on my cork or corking device. I’m now thinking through my long-term packing issues, so I can work through only one company to have consistency that my Riesling or Burgundy bottle won’t differ from year to year. WBM

WBM July 2017 99

people

For people news you can search or filter visit winebusiness.com/people

Wineries & Winemaking Rutherford Wine Company announced Jay Turnipseed joined the company as winemaker. He will oversee all winemaking and production of the Napa Valley-based company’s multi-brand portfolio. Turnipseed comes to Rutherford Wine Company with a distinguished winemaking track record in Napa Valley and Sonoma. Most recently, he gained recognition for his Napa Valley wines as senior winemaker for Franciscan Estate and Mount Veeder Winery. Turnipseed also gained experience as an intern and an enologist at Gallo of Sonoma in the Russian River Valley. He holds a degree in viticulture and enology from University of California, Davis.

Turnipseed joins the winemaking team which includes associate winemaker Mike Chupp; assistant winemaker Jelena Rumora; and cellar master Terry March. He reports to the Rutherford Wine Company’s vice president of operations, Barry Bergman.

Elizabeth Pressler and Spencer Graham, founders and proprietors of Elizabeth Spencer Winery in Rutherford, Napa Valley said Matt Wood has joined their company as general manager. Wood brings a wealth of experience from his time managing the DTC business of Constellation Brands, Foley Family Wines and finally as estate director with responsibility for the general management of Domaine Chandon and Newton Vineyards for French Luxury Group LVMH. Thirty years after founding his namesake winery, Jayson Pahlmeyer has appointed his daughter Cleo Pahlmeyer as president of Pahlmeyer Winery.

She heads the family’s collection of wines, including Pahlmeyer, Jayson and Wayfarer, plus the estate vineyards in Napa Valley and the Sonoma Coast.

Cleo joined the family business in 2008 in sales and customer service.

She moved on to manage direct-to-consumer sales and marketing, and later directed the company’s communications and public relations. Cleo was instrumental in the development and 2014 launch of Wayfarer Pinot Noirs and Chardonnay from their estate vineyard in the Fort Ross-Seaview appellation, planted in 2000.

Long-time Frank Family Vineyards tasting room employee Zahava Kraiser has been promoted to the role of tasting room manager while Liam Gearity has been promoted to director of direct-to-consumer sales and hospitality. Kraiser first visited Frank Family Vineyards for a wine tasting with friends in 2010 after moving from Boston to Napa. A former employee of Hewlett-Packard, Kraiser strongly identified with Frank Family’s focus on hospitality and customer service, and began working as a sales associate in the tasting room shortly after her visit. Over the last seven years, she has worked her way up from sales associate, to assistant tasting room manager, before being promoted to tasting room manager. In her new role, Kraiser oversees everything from employee scheduling to inventory, and makes sure the tasting room runs smoothly day in and day out. A veteran of the restaurant hospitality industry, Gearity has held long-term leadership positions at high-end restaurants in New York and Los Angeles, two of the nation’s most fast-paced hospitality markets. Gearity relocated from Los Angeles

100 July 2017 WBM

to Napa in 2015 to work with the Franks and quickly established himself as a leader. In his new role, Gearity oversees all divisions of Frank Family’s tasting room, wine club, and events departments, and works continuously to elevate Frank Family’s hospitality-driven tasting experiences.

Jenelle Madera has joined Adelsheim Vineyard’s distribution sales team as Southeast regional sales manager. Madera brings more than 10 years of experience in wine distribution, both representing wineries and distribution companies. She comes to Adelsheim from Breakthru Beverage, the winery’s Florida distribution partner. Madera is Level 3 WSET certified and has successfully passed the Introductory Level of Court of Master Sommelier with plans for certification later this year. Her primary responsibility at Adelsheim Vineyard will be to lead the distribution sales efforts in the Southeastern and East Coast states of Alabama, Florida, Georgia, Kansas, Kentucky, Louisiana, Maryland, Mississippi, Missouri, North Carolina, South Carolina, Tennessee, Texas, Virginia, West Virginia and the District of Columbia.

Signorello Estate hired Lisa M. Saunders as western regional sales manager.

Saunders has more than 12 years of experience in the wine industry with a focus on trade sales for the last nine years. She has worked with Hahn Family Wines, Foley Family Wines and most recently with New Zealand’s Mt. Beautiful Winery in California. She has embraced and executed social and digital marketing plans, brand launch events and played an integral role at the Aspen Food & Wine Classic.

Nell Sweeney, proprietress of Vine Cliff Winery, named Michael Heliotes national sales director for Vine Cliff wines. He will be responsible for wholesaler, broker, fine wine retailers and restaurant accounts throughout the U.S. and Canada. Heliotes has been in the wine sales and marketing industry for more than 17 years, many of them spent with Southern Wine & Spirits’ three major divisions across the country. He has also held sales positions with ultra-premium wineries Palmaz Vineyards and Krupp Brothers/Stagecoach Winery.

Caitlin Crisan has joined the Jardesca team to develop and grow its flagship brand with focus on its lead product, JARDESCA California Aperitiva. Crisan joins JARDESCA as the national brand manager to build upon its initial launch success and will focus on growing distribution and engagement, along with accelerating growth. Crisan has more than 10 years of experience within the beverage alcohol and marketing industries, from public relations and event management to experiential campaigns ranging from political and social activism to enterprise and consumer technology. Most recently, she was the trade engagement manager at Campari America, the U.S. division of Gruppo Campari, the world’s sixth-largest premium wine and spirits company.

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New York Winegrowers from East to West Ponder Decisions Made

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Legal Counsel to the Beverage Industry • Applications for ABC and TTB licenses • Distribution agreements & direct shipping advice for all states • ABC and TTB Business Practice Counseling • Accusation, Defense and Protest Hearing Representation

Industry Services & Suppliers Lafitte announced the hiring of Peter McAfee into the Lafitte family of companies as a new sales account manager for the Pacific Northwest.

McAfee will be looking after cork and capsule needs with the full support of the company’s staff in Northern California. As a former production manager, bottling line manager and Lafitte customer of 10 years, McAfee brings a wealth of relevant technical experience to the company and its clients.

• Regulatory clearance of promotions, point-of-sale material, labels and advertising ATTORNEYS: John Hinman Lynne Carmichael Beth Aboulafia Rebecca Stamey-White Suzanne DeGalan Sara Mann Erin Kelleher John W. Edwards II Jeremy Siegel Barbara Snider

260 California Street, Suite 700 San Francisco CA 94111 Telephone 415.362.1215 Facsimile 415.362.1494

beveragelaw.com

Cork Supply USA hired Daniel Brodie as a supply chain specialist. He is responsible for managing logistics and maintaining long-term relationships with our suppliers. To his new role at Cork Supply, Brodie brings more than 16 years of experience in logistics, managing import/export containers and freight and reducing operational costs. He has built a career through positions that include logistics analyst, field positions coordinator, and transportation sales representative. He holds a B.S. from California Maritime Academy and an MBA from JFK University.

Associations & Education Sonoma County Vintners has appointed Gregory Walsh to the Board of Directors. Walsh is a managing partner of Dickenson Peatman & Fogarty and the lead partner in the firm’s Labor and Employment Group. He will fill the position on the board that previously belonged to Bahaneh Hobel, who is also with Dickenson Peatman & Fogarty. At Dickenson Peatman & Fogarty, Walsh’s practice encompasses all aspects of labor and employment law, including advising employers on how to prevent issues before they arise and developing workable solutions to those that do. He is also a member of the firm’s Wine Law and Litigation groups, representing clients in administrative and court proceedings.

The Walla Walla Valley Wine Alliance, the non-profit marketing and promotion membership organization representing vintners and vineyard owners in the Walla Walla Valley AVA, hired Natasha Blake Rudnick to oversee the organization’s burgeoning events schedule. Most recently event coordinator to the President’s Office at Whitman College where she oversaw more than 80 events annually, Rudnick brings a wealth of experience in the development and production of events. Prior to her work at Whitman, she was event coordinator and marketing manager for the UCLA Film Festival and worked for the Curtis Brown Group in London as a media agent. The events manager is a new position at the Walla Walla Valley Wine Alliance.

WBM

WBM July 2017 103

advertiser index Thank you to all of our advertisers!

Company

web address

page

Company

web address

page

A Bright Idea

www.abrightideaonline.com

85

Guala Closures North America

www.gualaclosures.com

49

Acampo Machine Works

www.acampomachineworks.com

58

Guillaume Grapevine Nursery

www.guillaumenurseries.com

63

ACIC Cork and Closures

www.acicclosures.com

31

Gusmer Enterprises

www.gusmerwine.com

Admeo Inc.

www.admeo.us

47

GW Kent, Inc.

www.gwkent.com

AgCode, Inc.

www.agcode.com

60

Hinman & Carmichael, LLP

www.beveragelaw.com

103

Ager Tank & Equipment Co.

www.agertank.com

89

Innergation.com

www.innergation.com

64

Amcor Flexibles American Canyon

www.stelvin.com

22

Innovation + Quality

www.winebusinessiq.com

69

American AgCredit, CoBank, Farm Credit West, Northwest Farm Credit Services

www.farmcreditalliance.com

57

M A Silva USA

www.masilva.com

23

Amorim Cork America

www.amorimca.com

11

MetLife Agricultural Finance

www.metlife.com/ag

68

Anton Paar USA

www.anton-paar.com

46

Moss Adams, LLP

www.mossadams.com

98

ATAGO USA, Inc.

www.atago.net

48

Nomacorc

www.nomacorc.com

4, 7

ATPGroup

www.atpgroup.com

53

P&L Specialties

www.pnlspecialties.com

43

Bastos, LLC

www.bastosllc.com

75

Portocork America

www.portocork.com

3

Bergin Glass Impressions

www.berginglass.com

9

Prospero Equipment Corp.

www.prosperoequipment.com

39

Berlin Packaging

www.berlinpackaging.com

71

Rabobank, NA

www.rabobankamerica.com

93

Bin to Bottle Winery

www.bintobottle.com

33

Ramondin USA, Inc.

www.ramondin.com

85

Bucher Vaslin North America

www.bvnorthamerica.com

37

Revolution Equipment Sales

www.revolutionequipmentsales.com

38

Carlsen & Associates

www.carlsenassociates.com

43

Saverglass, Inc.

www.saverglass.com

2

Spec Trellising

www.spectrellising.com

63

St. Patrick’s of Texas

www.stpats.com

36

StaVin, Inc.

www.stavin.com

15

Terravant Wine Co.

www.terravant.com

19

Tom Beard Co

www.tombeard.com

52

TricorBraun WinePak

www.tricorbraunwinepak.com

13

Union Jack

www.unionjacktools.com

60

Unionpack

www.unionpack.com

24

VinNOW by Update Software

www.vinnow.com

73

Waterloo Container Co.

www.waterloocontainer.com

81

Wine Industry Financial Symposium

www.wineindustryfinancial.com

55

Wine Industry Technology Symposium

www.winebusinesswits.com

95

Winejobs.com

www.winejobs.com

102

WineJobs.com Summit

www.winejobssummit.com

101

Winemaker’s Database, Inc.

www.wmdb.com

38

CDR s.r.l.

45

C-Line Express

www.c-linexp.com

39

Cork Supply

www. corksupply.com

25

Cortica Benicia (CB USA)

www.cbcork.com

27

Criveller Group

www.criveller.com

35

Della Toffola USA, Ltd.

www.dellatoffola.us

41

Diam Closures USA

www.g3enterprises.com

21

Distributor Market Service

www.winesandvines.com/ marketing/dms

82

Eco Trellis

www.ecotrellis.com

61

Enartis USA

www.enartis.com

47

ETS Laboratories

www.etslabs.com

17

Falcon Crop Protection

www.falconcropprotection.com

59

Free Flow Wines

www.freeflowwines.com

73

G3 Enterprises

www.g3enterprises.com

107

Ganau America, Inc.

www.ganauamerica.com

108

Garton Tractor, Inc.

www.gartontractor.com

61

Gomberg, Fredrikson & Associates

www.gfawine.com

89

104 July 2017 WBM

Wines & Vines Packaging Conference www.wvpack.com XtraChêne

www.xtraoak.com

19, 29, 48

51

90 29, 52

winemaker of the month

Ashley Herzberg

, winemaker, Amista Vineyards, Dry Creek Valley, California

“Wine Business Monthly is truly a publication for winemakers. I love that the information and research are detailed and thorough. I know I can trust the product reviews. It is always the first place I turn to when making any product changes. My favorite section is usually the Winemaker Trials. I have learned so much from these. One of my favorite trials to read about (and then follow up with tasting at the IQ seminar last year) was that of Sauvignon Blanc with two different colors of shade cloth or no shade cloth over it and how that affected grape ripeness and sunburn.

In Dry Creek Valley, we can have problems with sunburn also, and I found the results very interesting.

NAME AND TITLE: Ashley

Herzberg, winemaker

WINERY NAME AND LOCATION:

Amista Vineyards, Dry Creek Valley, Sonoma

County, California. Amista Vineyards specializes in crafting estate-grown sparkling wines, using the traditional Methode Champenoise. Our spar-

We are currently in the middle of a replant of some of our vineyards. Wine Business Monthly has been invaluable in this process. A 2006 article by Mark Greenspan on drought-tolerant versus drought-avoidant rootstock was my starting place for rootstock research. The information in this article and many other drought-specific and water-saving articles, especially in the last few years, helped me to decide which rootstocks and clones to use based on our own site. A more recent article from last year about making a weak vineyard stronger, through irrigation practices, has informed the way in which I intend to farm our new blocks. Greenspan’s article from September on pruning practices also made me think about how best to prune my existing vineyards.”

and knew instantly that this was the career and place for me. I started my career at Owl Ridge Wine Services in the lab and from there went to Mauritson as assistant winemaker. I started consulting about six years ago, and I love it.

My biggest

kling wines are complemented by Chardonnay, Syrah and other Rhône

WHAT HAS BEEN YOUR BIGGEST PROFESSIONAL CHALLENGE?

varietals grown on our estate, plus Dry Creek Valley Zinfandel and Rockpile

challenge is finding the balance between having so much technology and

Cabernet. We have the perfect wine for celebrating all of life’s special

information at our fingertips and also finding restraint to let the wines and

moments.

vineyards speak for themselves and to keep the artistry of winemaking

ANNUAL TONNAGE PRODUCTION: About

55 tons per year

PLANTED ACRES: 22

the focus of all my wines. It has also been knowing when to let go of an outdated process or method, as our climate and growing conditions change, in favor of a better or more environmentally sound way.

I studied chemical engineering at the University of

VARIETALS THAT YOUR WINERY IS KNOWN FOR: We focus on sparkling wines

Nevada, Reno with the intention to go to medical school. I took a break,

and Rhône varietals from our estate property: Sparkling Grenache and

after my bachelor’s degree, to come to Sonoma County to work a harvest

Sparkling Syrah are two of our most unique wines.

CAREER BACKGROUND:

WBM July 2017 105

Timing became big business, Jake Lorenzo used to take the whole family to Spring Training in Arizona. We’d leave the cold, rainy early spring of Sonoma for a week or two of dry, sunny afternoons at the ball yard. Tickets were something like $5, and nobody worried about the score of the game. This detective particularly liked the hecklers who were working themselves into shape. They were inventive, knowledgeable and funny.

On some rare days things would get cloudy, and a game would be rained out.

The vendors hated rainy days because when the crowd went home, they made no money. The hot dog vendors would often panic in the face of a rain delay.

Once they had cooked the dogs, there was no way to use them the next day, so they would put them on sale for $0.25. Jakelyn and her mother loved the hot dog sales, especially if the sun came out and the game resumed after they had purchased their discounted hot dogs. “Timing is everything,” Jakelyn’s mother would say as she’d happily take a bite, getting a little mustard on her cheek.

There is no arguing that timing is important, but it is complicated. We all like to think that we are in control of our destiny, and to a certain extent, that might be true, but Jake Lorenzo hearkens back to those spring days in Arizona when the hot dogs went on sale. It makes me remember an appropriate old cowboy saying, “Timing has a lot to do with the success of a rain dance.”

Success in the wine business requires that you process a wide variety of information. Finding good grapes, defining an appropriate style and performing the necessary technical machinations are not enough.

Selecting barrels that contribute to and enhance your style is essential.

Choice of yeast, label design and even the type of bottle you use all contribute to the success of a fine winery. Making the call on purchasing a bottling line or using a mobile bottling line can make a huge difference in your financial survival.

Getting all of that done is still no guarantee in the wine business. It is not enough to get fine wine made from wonderful grapes placed safely into the bottle. Your artist-designed labels, imprinted corks and custom capsules don’t ensure victory. All of that just readies you for the next challenge: you have to sell the stuff. That’s where marketing comes in. Al Ries, the marketing professional who coined the term “positioning,” said, “Timing and strategy are the Himalayas of marketing. Everything else is the Catskills.”

This detective has personal experience with both the Himalayas and the Catskills on this one. In 1990 Jake Lorenzo helped dress a dozen wine rebels in black capes and masks, set them on the Napa Valley Wine Train and then had them distribute free Sonoma Valley wine to the passengers. It made national news and resonated for years. That’s the Himalayas.

A few years later this detective helped kidnap Richard Branson and two busloads full of European wine writers. Using helicopters, horses and Jeeps, we forced the buses off the highway and led them to Gundlach Bundschu Winery for a hilarious wine cleansing ceremony. It would have been the biggest wine story ever, but that same day Jaqueline Kennedy Onassis died.

Publicity-wise, welcome to the Catskills. No less a philosopher than Mac “Dr. John” Rebennack explained it this way, “I been in the right place, but it must have been the wrong time.”

Speaking of the right place and the wrong time, Jakelyn’s mother and I love visiting newer, lesser-known wine regions, especially if they are making delicious wine. Most places that can grow decent winegrapes are in beautiful locations, usually near to large bodies of water and often in close proximity to good restaurants. We spent marvelous vacations exploring the Finger Lakes in New York and the Leelanau Peninsula in upper Michigan.

FOR YEARS, BEFORE IT

106 July 2017 WBM

Just last week, Jakelyn’s mother and I returned from Idaho. People might be surprised to learn that grapes were first planted in Idaho back in 1864 and that Idaho had the first wineries in the Pacific Northwest. In fact, Idaho wines achieved national renown until the industry was shuttered during Prohibition.

It is Jake Lorenzo’s experience that every wine region dates back to a couple of pioneers. These are people with vision, drive and confidence who are well ahead of their time. Of course, George McGovern once said, “Sometimes when they say you’re ahead of your time, it’s just a polite way of saying you have a real bad sense of timing.”

That might have been the case when Mary and Ron Bitner were among the very first to re-plant winegrapes in Idaho, all the way back in 1981. By 1995 a talented winemaker named Greg Koenig started using the Bitners’ grapes to produce some very tasty wines at his Koenig Distillery and Vineyards. A few years later the Bitners put Koenig in charge of making wine from their grapes for their new Bitner Vineyards brand. Along with a handful of others, Mary and Ron Bitner and Greg Koenig helped pioneer the modern wine movement in Idaho.

It is Jake Lorenzo’s experience that every wine region dates back to a couple of pioneers. These are people with vision, drive and confidence who are well ahead of their time.

In the last 12 years the wine business in Idaho has exploded. Now,there are more than 1,300 acres of grapes being farmed, with more than 50 wineries turning those grapes into wine. Tasting rooms are overflowing with visitors, and the wines are selling like crazy. Jake Lorenzo was fascinated. Why was wine booming in Idaho?

I met winemakers like Mike Crowley from Syringa, Earl Sullivan from Telaya and Melanie Krause from Cinder Winery. I was introduced to growers and winery owners like Larry and Kay Hansen of Vizcaya Winery and Gregg and Mary Alger from Huston Vineyards. They shared a common enthusiasm, drive and excitement about their industry.

Almost every one of them mentioned that farming, as a way of life, was something they wanted their kids to experience, and grape farming filled the bill. While the Snake River Valley might be lower than the Himalayas, the dramatic influx of settlers from California, Oregon and Washington had created a voracious customer base for Idaho wines. It was a small perfect storm of marketing and timing. Even the many wineries that produce Tempranillo were doing well, thanks, they supposed, to the large Basque population living in and around Boise.

Timing might be everything, and it might not, but Jake Lorenzo can’t wait to get back to Idaho to check out the vineyards along the Snake River and sample some more of these wines. WBM

ILLUSTRATION BY BOB JOHNSON

jake lorenzo

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