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Barrel Issue Cooperages Innovate to Achieve Consistency Winemakers Discuss Whether to Use Steam or Ozone to Clean Barrels 2015 Barrel Survey Report
Plus Recent Research: How to Irrigate Less and Maintain Quality and Yields Flash Détente for Improving Quality in Small-Production Wines
2015 Y E A R
IN REVIEW Top News • Top Deals • Top Hires
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month in review WINE BUSINESS MONTHLY December 2015 • Volume XXII No. 12 EDITOR Cyril Penn SENIOR TECHNICAL EDITOR Curtis Phillips MANAGING EDITOR Rachel Nichols ASSISTANT EDITOR Erin Guenther STAFF WRITER Bill Pregler
DECEMBER 2015
WINE BUSINESS MONTHLY December 2015 • $5.95
WINE BUSINESS MONTHLY
The Industry’s Leading Publication for Wineries and Growers
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ANNUAL
Barrel Issue Cooperages Innovate to Achieve Consistency Winemakers Discuss Whether to Use Steam or Ozone to Clean Barrels 2015 Barrel Survey Report
Barrel Issue • Flash Détente
subscribers, the harvest is a wrap, and despite a huge drop in quantity—in many instances yields fell way below expectations—growers are praising the 2015 vintage for its quality. It was an unusual and challenging year for a number of reasons, ranging from uneven ripening to a relative lack of water. Welcome to the December issue, with our annual review of the year’s top news. Looking at the 2015 news timeline reminded me that there’s been so much evolution and change in the wine business this year. We lost some influential wine people while we saw a new wave of consolation, not just among wineries but among national retailers and most recently with mergers and alliances involving the nation’s mega distributors. The consolidation trend will continue to test smaller wineries seeking clout in the marketplace and will means the increasing emphasis on direct sales and personal interaction with consumers will grow. On the winemaking front, one of the evolutions that occurred this year involved flash détente, a tool that has traditionally been used by large, industrial wineries, but more recently has been used in the U.S., not just by large producers. An article in this issue explores the current use of flash in California. Another evolution involves the collective understanding of the role of efficient irrigation and its implications for wine quality. An article in this issue describes results of a research study indicating traditional irrigation techniques use too much water and that conservative sensor-based irrigation practices can improve quality and the bottom line.
AS THIS ISSUE REACHES
COPY EDITOR Paula Whiteside EDITOR AT LARGE Lisa Shara Hall CONTRIBUTORS George Coope Mark Greenspan John Intardonato Michael S. Lasky Jake Lorenzo Andrew Meggitt Emily Rasmussen Ted Rieger Thibaut Scholasch DESIGN & PRODUCTION Scott Summers
Plus Recent Research: How to Irrigate Less and Maintain Quality and Yields Flash Détente for Improving Quality in Small-Production Wines
2015 Y E A R
PRESIDENT & PUBLISHER Eric Jorgensen ASSOCIATE PUBLISHER Tamara Leon
IN REVIEW Top News • Top Deals • Top Hires
ADVERTISING Advertising Account Executive Karen Fraser
The December issue focuses on barrels, with our survey report showing wineries have been ordering more barrels (even with this year’s lower yields). A separate article focuses on the trend of cooperages innovating to achieve consistency, while another involves various approaches winemakers employ for barrel sanitation. For more about the growing season, and the relatively smaller yields, check out Mark Greenspan’s column. Jake Lorenzo even weighs in on the light yields this month because they don’t just affect winemakers: crop size, or a lack thereof trickles down to pickers, sales people, vendors, and even to consumers. Cyril Penn - Editor
Classifieds Jacki Kardum ADMINISTRATION Vice President – Data Management Lynne Skinner Circulation Liesl Stevenson Operations Analyst/Customer Support Katie Miller Office Manager/Customer Support Jacki Kardum 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. Copyright 2015 Wine Communications Group, Inc. Short passages can be quoted without permission but only if the information is attributed to Wine Business Monthly. Wine Business Monthly is distributed through an audited circulation. Those interested in subscribing for $39/year, or $58 for 2 years, call 800-895-9463 or subscribe online at www.winebusiness.com. You may also fill out the card in this magazine and send it in.
4 December 2015 WBM
contents
WBM
December 2015 • Volume XXII No. 12 • The Industry’s Leading Publication for Wineries and Growers
www.winebusiness.com
2015 Y E A R Top News Stories . . . . . . . . 10
IN REVIEW
Top Deals . . . . . . . . . . . . . . . 14
Top People Moves . . . . . . . . 20
George Coope
winemaking
Barrel Issue
grape growing 2015: Well… That Was Weird! . . . . . . . . . . . . . . . 68
2015 WBM Barrel Survey Report Does Anyone Know How Much Water it Takes to Maintain a Barrel? . . . . . . . . . . . . . 30
The recent growing season was unusual and hopefully will not be repeated often. Mark Greenspan
Curtis Phillips
A Comparative Study of Traditional vs. Plant Sensor-based Irrigation . . . . . . . 74
Homogenizing Oak Barrels . . . . . . . . . . . . . . . 36 A variety of cooperages have recently introduced barrels that allegedly guarantee the homogeneity of the tannins and even the chemical components in the barrel from one vintage to the next.
The study finds that plant sensor-based irrigation promotes more conservative vineyard water use and improves vineyard economics.
John Intardonato
Thibaut Scholasch
Choosing the Best Method for Sanitizing Barrels . . . . . . . . . . . . . . . . . . . . . . 42 Which method is best for your winery’s logistical and budgetary requirements? Michael S. Lasky
sales & marketing Music in the Tasting Room: Are You Breaking the Law? . . . . . . . . . . . . . . . 82
Square Fermentation Tanks Save Winery Space, Water and Energy Costs . . . . . 48 By switching from round to square tanks, Rodney Strong Vineyards was able to increase capacity by 28 percent and reduce water use by nearly 90 percent. John Intardonato
Flash Détente Evolves . . . . . . . . . . . . . 54 Now used as tool for higher-end and smaller-production wines Ted Rieger
5 Things I Learned About Weathering the Weather as a Team . . . . . . . . . . . . 66 When weather in Missouri made it difficult to grow grapes, Andrew Meggitt and the St. James Winery team banded together to remain successful.
Performing Rights Organizations (PROs) are monitoring wineries—what you need to know before pressing “Play.” Emily Rasmussen
Retail Sales Analysis: Off-Premise Wine Sales Up 6.5 Percent . . . . . . 84
technology & business Industry Roundtable: Demand for Vineyard Properties Increases . . . 86 In our annual report on the lending environment for vineyards, leading bankers report continued strong demand for vineyard investments, combined with low interest rates and increased banker competition to secure new loans. Michael S. Lasky
Andrew Meggitt
departments month in review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 what’s cool . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Nitrogen Heaters Cryogenic control for the winemaker Bill Pregler
Cover Photography: Robert Holmes
Demptos Napa Cooperage
Cover Design: Scott Summers
people . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 advertiser index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 jake lorenzo Half-Price Sale . . . . . . . . . . . . . . . . . . . . . . 97 winemaker of the month . . . . . . . . . . . 98 Irv Geary, winemaker Wild Mountain Winery, Taylors Falls, Minnesota
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
December 2015
Justin Seidenfeld, winemaker, Rodney Strong Vineyards, Square Fermentation Tanks, page 48
“Because the tanks have a wider area, the cap is spread out more, which gives a better skin contact with the juice. This also provides better cooling of the must.”
Dave Dobson, winemaker, Carneros Vintners, Flash Détente Evolves, page 54 “Enough high-end producers were forced to have two years experience with the machine to get them to start thinking not just about using it to salvage a crop, but also to think about how they can use this technology to make wines better every year.”
Rudy Zuidema, owner, Flash Wine Technologies, Flash Détente Evolves, page 54 “Our goal is to bring this tool to smaller wineries to use every vintage, not only for problematic ones.”
Mark Greenspan, columnist, 2015: Well… That Was Weird!, page 68 “Chardonnay was a beast as it always is, and if anyone said they had no mildew on their Chardonnay they were lying or didn’t go out to look.”
George Coope, senior vice president, Zepponi & Company, 2015 Wine Industry Merger & Acquisition Review, page 14 “Major producers focused their acquisition dollars primarily on ultra-premium and luxury-priced brands in an ongoing effort to migrate their brand portfolios to higher price points.”
Jason Hinde, vice president, Exchange Bank, Demand for Vineyard Properties Increases, page 84 “As long as the vineyard is being farmed correctly and that particular varietal is still in demand from the consumer, the loan is there.”
8 December 2015 WBM
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2015
YE AR IN REVIEW
2015 Top News Stories J
a n u a r y
F
e b r u a r y
French Laundry Burglary: $300,000 in Wine Lost
Crush Report: California ‘14 Crop Large, Not Record-Breaker
76 bottles of rare wine were stolen, 72 later recovered
2014 crush down 7.9 percent to 3.91 million tons
Napa Winemaker Volker Eisele Dies at 77
Roll Global Acquires Mercier California
The architect of farmland protection policy in Napa suffered complications from a stroke
Roll Global expands to be largest grapevine grower in California
Investment Group Buys Majority Ownership of Kosta Browne Boston equity firm J.W. Childs Associates gains control; founders remain co-owners
Horse Heaven Hills Pioneer Passes at 84 Bob Andrews died after lengthy battle with cancer
John Pedroncelli Dies at 89
Peter Mondavi Sr. Inducted Into French Society Becomes oldest member inducted into the prestigious Chaine des Rotisseurs
Premiere Napa Valley Barrel Auction Raises Record $6 Million Average wholesale price per bottle was $286
Jackson Family Buys Captûre Wines
Pedroncelli was a key figure in the history of Dry Creek winemaking
Sale includes brand and inventory but not organically farmed estate, Tin Cross Vineyards
Terlato Family Acquires Juliana Vineyard
Illinois Sends 100+ Cease and Desist Letters
The 60-acre Napa vineyard planted primarily to Merlot and Cabernet Franc
Liquor Control Commission claims offenders were transferring liquor into Illinois without a license
Foie Gras Legal in California Judge found ban violated interstate commerce clause
Sonoma County Grape Growers Release 100-year Sustainability Plan Part of plan to be first wine region in U.S. with 100 percent sustainable grapes and wine
West Coast Ports Suffer Slowdowns, Work Stoppages Dispute over labor contracts causes major disruption in service
Harvard Buys Up Paso Robles Water Rights University secured water well drilling permits to feed vineyards days before lawmakers banned new pumping
Kendall-Jackson Buys Siduri Wines Sale includes Novy Family Wines; total production 25,000 cases between both brands
10 December 2015 WBM
Petaluma Gap Winegrowers Alliance Petition for AVA “We felt a separate Petaluma Gap AVA would help consumers recognize the special character of this area.”
Robert Parker Steps Down From Bordeaux Futures Critic announced he will no longer taste Bordeaux en primeur
M
ASEV’s Lyndie Boulton Retires Assistant executive director Dan Howard takes over the 2,000 member organization
Critic ‘Champagne Jayne’ Faces Court Trademark dispute over name later ruled in favor of critic
Wine Business Monthly Hosts Inaugural Innovation+Quality Conference and trade show focused on cutting-edge innovations that advance wine quality
Vineyard Dispute Ends in Murder-Suicide Vintner Robert Dahl pulls trigger on investor Emad Tawfilis after conference to settle dispute
Gallo Acquires J Vineyards Purchase includes winery, 300 acres spread across Sonoma County
California Approves Restrictions on Water Use Servers in bars, restaurants and cafeterias can’t bring out water with menus and silverware unless customers ask, among other restrictions
Lawsuit Claims Very High Levels of Arsenic Accuses more than 24 California winemakers and sellers of misrepresenting wine as safe
State Sues Gallo Glass Over Hazardous Materials Gallo Glass Co. to fight lawsuit though authorities say alleged violations do not harm consumers
Diageo Provides Calorie Labeling a r c h
Treasury Wine Flags Write-down, Cuts Jobs
First drinks company to globally provide alcohol content, nutritional information and calories
TWE booked $50 million in write-downs after idling wineries and production facilities in the U.S. and Australia
A
NVV Shoots for 100 Percent Napa Green Certification by 2020
The 2.5 million-case winery holds longstanding water rights, permit for hotel and restaurants
Sustainability program part of plan to solve community issues
p r i l
Treasury to Sell Asti Winery and Vineyards
ShipCompliant Merges with Sovos Compliance “We are committed to taking our contributions on your behalf to a whole new level”
Governor Brown Directs First Ever Mandatory Water Reductions Cities to reduce water usage by 25 percent; approximately 1.5 million acre-feet of water
Vintage Nurseries Opens Testing Laboratory New Materials Testing Laboratory features special virus detection
Joseph Phelps Dies at 87 Construction, wine and philanthropy visionary known for big red wines
Sonoma County Halfway to 100 Percent Sustainability Hits mark after just 15 months
M
a y
Tesla Enters Battery Market with Technology Tested at Jackson Family Wines For now, the battery primarily serves as an expensive backup system during blackouts
Sonoma County Barrel Auction Raises $460,000 Next year’s event scheduled for Friday, April 29, 2016
Silver Oak Buys American Oak Cooperage Renames it The Oak Cooperage
Pennsylvania House Passes Wine Shipping Bill HB 189 bans sale and shipment of all European wine
Gallo Acquires Napa Valley Vineyards Buys Cypress Ranch and Palisades Vineyard—258 acres of vineyard
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2015 Y E A R J
IN REVIEW
u n e
Famed Wine Writer, Teacher Passes Away George Starke suffered aspiration pneumonia at age 93
Gary Eberle Regains Namesake Winery Control “It hit me hard when I faced the fact that I lacked majority control over this place”
WSU Tri-Cities Wine Science Center Named for Ste. Michelle Wine Estates Opens for its first semester
Auction Napa Valley Raises $15.8 Million Money goes to community health and children’s education organizations
The Wine Group Buys Benziger Winery Sale estimated between $70 million to $80 million
Free Flow Wines Gets East Coast Kegging Facility
Mark Greenspan Named ASEV President
Auction of Washington Wines Brings in $2.5 Million
Napa Wraps Up Earliest Harvest in Years
The president of Advanced Viticulture Inc. and WBM columnist succeeds Lise Asimont
The 28th annual auction up significantly from last year’s $1.8 million
“It feels like the end of October, not its start”
Black Women ‘Humiliated’ by Napa Valley Wine Train
#LakeCountyRising Raises $275,000 for Valley Fire Victims
Women file $11 million lawsuit after being kicked off train
Fire that started in September burns 76,067 acres, destroys several wineries, 1,307 homes
Gallo Buys Asti Winery, Souverain Brand Treasury posts a $7.5 million loss on disposal of these assets
Randall Grahm’s Estate Vineyard Crowdfunds Popelouchum Project Aims to breed 10,000 new, genetically distinctive grape varieties
B.R. Cohn Sold to Vintage Wine Estates 41-year ownership comes to an end
CDFA Reviews Grapevine Certification Program Working Group requests CDFA add Red Blotch testing requirement
Winemaker Files Suit Over ‘Herbicide Drift’ Willamette Valley Vineyards claims 12.7 tons of Pinot Noir lost after Five Cent Farm sprayed herbicides
Diageo Investigated By SEC
Long Meadow Ranch Buys 145-acre Anderson Valley Parcel
Wragg Fire Burns 8,051 acres
Believes Diageo over-shipped inventory into U.S. to boost results
Includes 50 Pinot Noir acres, 17 Chardonnay acres, two Pinot Gris acres
Fast-moving wildfire spread near Lake Berryessa in Napa and Solano counties
France Bans Roundup Herbicide
Rutherford Wine Company Purchases Carneros Vineyards
Wine Business Monthly Acquires WITS The 2016 Wine Industry Technology Symposium will be presented entirely by WBM
J
u l y
Constellation Brands Purchases Meiomi Wines Meiomi is among fastest-growing Pinot Noir brands across all price points
250,000 Credit Cards Stolen in Wine Industry Hack Hacker took customer names, credit/ debit card numbers from Missing Link Networks
E&J Gallo Purchases Talbott Vineyards Central Coast gain includes Sleepy Hollow Vineyard
S
Alcoholic beverage producers can identify retailers of product on social media
e p t e m b e r
Vintage Wine Estates Acquires Swanson Vineyards Previous owner will serve as consultant on Napa brand
Sovos Compliance Acquires WineDirect Compliance Second wine industry compliance acquisition
Sonoma Harvest Wine Auction Breaks Record
30-acre property sold for undisclosed amount
Rocky Fire Destroys 60,000 Acres Lake County brush fire forces evacuation of several hundred people
Butte Fire Scorches 71,523 Acres Wildfire in Amador and Calaveras counties caused crop loss and winery closures
Wine Business Monthly Hosts First WineJobs Summit Trends in winery human relations, hiring and compensation were discussed
Bill Leigon Acquires Jamieson Ranch Winery
Heineken Buys Brewing Stakes From Diageo Heineken spends $781 million to shore up control of brands
Paso Robles Vineyards Yield 50% Less Than Normal Some vineyards “total losses,” “not worth harvesting”
Silver Oak Founder Dies Raymond Twomey Duncan passed away at 84
TPP Trade Agreement Finalized The U.S. and 11 other Pacific Rim nations liberalize trade across 40 percent of global economy
Walter Schug Dies at 80 Sonoma Pinot Noir pioneer suffered complications from a stroke
Treasury Wine Estates Acquires Diageo Wine Business The $552 million purchase doesn’t include Chalone or Acacia properties
Purchase price was not disclosed
Paul Kronenberg Announces Retirement
Skalli Family Sells St. Supéry Estate Vineyards
Leaves Family Winemakers of California helm after 17 years as president
Fashion house Chanel, Inc. makes purchase; no significant changes expected
Flanagan Vineyards Purchases Platt Vineyard
Foothills Vineyards Report Harvest Down 50 Percent
Charmer Sunbelt and Wirtz Beverage Unite
31-acre site has reputation for Pinot Noir and Chardonnay
Grapes fewer and smaller than in previous years
Riedel vs Hosemaster Resolved
Judy Jordan Purchases Oregon’s Chehalem Mountain Vineyard
A
u g u s t
Glassmaker, blogger reach agreement over a satirical article published on Tim Atkin’s website
Jeff Hill Sentenced to Year in Jail Hill stole more than $50,000 worth of winegrapes from Howell Mountain Vineyard in 2013
Uses money from Gallo’s J Vineyards purchase
O
Breakthru Beverage Group will be one of largest wholesale distributors in U.S. and Canada.
CSU Fresno Chair Leaves for Private Sector Dr. James Kennedy exits viticulture and enology department for Constellation Brands
c t o b e r
Koch Wins Appeal Over Fake Wines Appellate court finds Eric Greenberg knowingly put fake wine up for auction
12 December 2015 WBM
Jerry Brown Signs Assembly Bill 780
Up $500,000 from last year’s $4 million
The largest port in the U.S. for imported wines allows Free Flow to grow import portfolio
The active ingredient, glyphosate, classified as “probably carcinogenic to humans”
Top News Stories
Southern, Glazer’s Form Strategic Alliance Shanken News reports that the wholesalers combined revenue surpasses $16 billion
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2015 Y E A R
IN REVIEW
2015 Top Deals
Wine Industry
Merger & Acquisition Review George Coope
George Coope, senior vice president at Zepponi & Company, has more than 25 years of investment banking and advisory experience in the wine, beer and distilled spirits industries. Prior to joining Zepponi & Company, Coope held senior roles at several boutique investment banks in San Francisco and was a founding member of the consumer practice group at Hambrecht & Quist LLC. Coope also worked in R&D and operations at Miller Brewing Company and is a former director of Patz & Hall Wine Company and The Coppola Companies. Coope graduated with a BA from Stanford University, an MS in food science with a specialization in viticulture and enology from UC Davis and an MBA from Harvard Business School. Prior to attending UC Davis, he worked as an apprentice to the general manager and winemaker at Domaine Comte Georges de Vogüé in Chambolle-Musigny, France.
wine industry merger and acquisition activity established over the past few years continued unabated in 2015, fueled by low interest rates, a generally improving economy and a growing United States wine market. While the year witnessed a very broad range of acquisition activity, a number of unifying themes and significant trends can be discerned. Major producers focused their acquisition dollars primarily on ultrapremium and luxury-priced brands in an ongoing effort to migrate their brand portfolios to higher price points. The primary purpose of the year’s mega-deal, the $600 million acquisition by Treasury Wine Estates (TWE) of most of Diageo’s premium wine brands, was to strengthen TWE’s presence at the high end of the U.S. market. From a varietal standpoint, Pinot Noir claimed the transaction spotlight during the year, with multiple acquisitions of wine brands that specialize in this booming varietal. Consistent with previous years, there was a steady stream of notable transactions that involved vineyards and facilities. As usual, financial investors of various shapes and sizes circled the industry and displayed interest but proved highly selective when it came to actually pulling the trigger. To no one’s surprise, E&J Gallo and Vintage Wine Estates again confirmed their status as two of the most active “serial” acquirers in the industry, each with multiple transactions that involved brands, vineyards and/or facilities. T H E S T R O N G PA C E O F
14 December 2015 WBM
Major Producers Moving Upscale Through Acquisition The long-term “premiumization” trend, slowed only temporarily by the recession, continued inexorably. Similar to the experience in the spirits and brewing industries, growth in the wine industry was increasingly concentrated in the higher-priced categories while lower price segments languished or even declined. This year was no exception. Nielsen data for 2015 showed sales of wines priced at $10 or higher per bottle growing at low double-digit rates versus 2014 while sales volumes of wines under $10 actually declined. At the specific brand level, we saw many of the large “jug” and popular premium brands that at various times defined the California wine industry, such as Franzia, Carlo Rossi, Sutter Home and Fetzer, in decline. With the demand for lower-priced wines stagnant or shrinking, these categories are becoming increasingly price-competitive. In response, we witnessed a steady migration of the major wine marketers to higher price segments, with brand acquisitions playing a major role. TWE’s acquisition of Diageo’s Beaulieu Vineyards, Sterling Vineyards, Provenance Vineyards, Rosenblum Cellars and Acacia Vineyard brands essentially doubles the company’s revenue in the luxury and “masstige” categories of the market,
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2015 Y E A R
IN REVIEW
defined by TWE as over $20 per bottle and between $10 and $20 per bottle, respectively. For Diageo, the transaction marks the effective end of the company’s involvement in the U.S. wine business, which began in 1987 with predecessor Grand Metropolitan’s acquisition of Heublein Inc. Among other producers, Jackson Family Wines bolstered their strategic emphasis on the over-$20 per bottle price segment with their January acquisition of Siduri Wines, renowned for its California and Oregon singlevineyard Pinot Noirs. The Wine Group (TWG), a company whose center of gravity has traditionally been in the sub-$10 price segments with brands such as Corbett Canyon and Franzia, acquired Benziger Winery, a Sonomabased brand that retails primarily in the $12 to $25 per bottle range. Benziger joined Cupcake and Save Me San Francisco in TWG’s growing stable of brands that sell at near or above $10 per bottle. Many of the other acquisitions discussed in the following sections also exemplify this strategic shift to higher price points. TA B L E :
Pinot Noir Acquisitions Dominated the News Pinot Noir was not only one of the fastest growing varietals in 2015 but also the varietal fetching the highest average price among all wine varietals according to Nielsen data. Not surprisingly, 2015 was the year when multiple players made acquisitions to stake out or strengthen their positions in this increasingly popular varietal, particularly at price points of $20 per bottle and above. In fact, it was a one-of-a-kind Pinot Noir opportunity that motivated Constellation Brands to come off the bench after a lengthy hiatus from the acquisition game. In one of the most visible and talked about transactions of 2015, Constellation purchased the Meiomi brand from Copper Cane Wines in August for an announced price of $315 million. Meiomi, the brainchild of
Notable Wine Industry Transactions Announced in 2015
Month
Target
Acquirer
Transaction Type
County/Region
January
Kosta Browne
J.W. Childs Associates
Brand and facility
Sonoma
January
Brewer-Clifton
Private investor group
Brand and facility
Santa Barbara
January
Triere Estate Vineyard
Heitz Wine Cellars
Facility and vineyard
Napa
January
Siduri
Jackson Family Wines
Brand and facility
Sonoma
January
Sugarloaf East Vineyard
Silverado Premium Properties
Vineyard
Napa
March
J Vineyards & Winery
E&J Gallo
Brand, facility and vineyards
Sonoma
March
Cuvaison’s Calistoga winery
Criswell Radovan
Facility
Napa
May
Cypress Ranch
E&J Gallo
Vineyard
Napa (Pope Valley)
June
Benzinger Family Winery
The Wine Group
Brands, facility and vineyards
Sonoma
June
Anderson Valley vineyard
Hall family (Long Meadow Ranch)
Vineyard
Mendocino
July
Circle S Ranch
Peter Read & investors
Vineyard
Napa
July
Fahrig Ranch
Staglin Family Vineyards
Vineyard
Napa
July
B.R. Cohn Winery
Vintage Wine Estates
Brand, facility and vineyards
Sonoma
July
Asti Winery and Souverain brand
E&J Gallo
Facility and brand
Sonoma
August
Meiomi
Constellation Brands
Brand
Sonoma/Monterey/ Santa Barbara
August
Talbott Vineyards
E&J Gallo
Brand, facility and vineyards
Monterey
September
Swanson Vineyards
Vintage Wine Estates
Brand and facility
Napa
September
Chehalem Mountain Vineyard
The Capra Company (Judy Jordan)
Vineyard
Oregon
September
Eola Springs Vineyard
The Capra Company
Vineyard
Oregon
September
Sage Canyon Vineyard
The Capra Company
Vineyard
Napa
October
Diageo Chateau & Estate brands
Treasury Wine Estates
Brands and facilities
Various
16 December 2015 WBM
Merger & Acquisition Review Joe Wagner, is a brand that didn’t exist seven years ago and has since rocketed to more than 700,000 cases with no sign of slowing down. This acquisition represents not only the filling of a “white space” in Constellation’s portfolio for an ultra-premium Pinot Noir brand with significant volume, but also a strategic move to expand and revitalize its market presence in the $20+ price category, joining Robert Mondavi Winery and Franciscan Estate in the portfolio. Similarly, the Siduri acquisition strengthened Jackson Family Wines’ position in luxury Pinot Noir and is also expected to provide an outlet for the company’s growing collection of premium Pinot Noir vineyards on the West Coast. E&J Gallo made a quantum leap in its high-end Pinot Noir business in 2015 with the March acquisition of J Vineyards and the August purchase of Talbott Vineyards. In addition to its well-known sparkling wines, J Vineyards provides Gallo with a respected line of luxury-priced, single-vineyard and appellation Pinot Noir bottlings, supported by more than 300 acres of estate vineyards in the Russian River Valley and Sonoma Coast. The Talbott Vineyards transaction secured Gallo a similarly strong Pinot Noir (and Chardonnay) position in Monterey County at $20+ price points, anchored by the 565-acre Sleepy Hollow Vineyard in the Santa Lucia Highlands. Gallo has no doubt identified Talbott’s Kali Hart label as an attractive product with significant expansion potential positioned at a price point similar to Meiomi.
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E&J Gallo and Vintage Wine Estates Lead the Charge Acquisitions, which once were an occasional opportunistic event at E&J Gallo, have become a central part of the company’s growth strategy. Gallo claimed the unofficial title of most active acquirer in 2015 with the two major brand acquisitions discussed above (J Vineyards and Talbott), a large facility transaction (Asti winery) and a number of sizable vineyard transactions. The Asti acquisition also included the winery’s 535-acre Alexander Valley property and vineyards and, as an afterthought, the longneglected Souverain brand, whose annual sales volume has shrunk to less than 100,000 cases. Vintage Wine Estates (VWE) was in close second position with two notable brand transactions, continuing its strategy of building critical mass through acquisitions with an increasing emphasis on higher-priced brands. In July, VWE acquired B.R. Cohn Winery in Sonoma Valley, adding a 75,000-case brand with an expandable $20+ Cabernet Sauvignon position (Silver Label) plus a winery with a unique location, a liberal public events permit and 70 acres of vineyards. VWE brings resolution to B.R. Cohn’s long quest to increase its influence and traction in the wholesale distribution channel. Soon after the B.R. Cohn transaction, in September, VWE purchased Swanson Vineyards’ brand and winery, adding a respected luxury-priced Merlot-centric brand to its Napa Valley portfolio, which already included Girard, Clos Pegase and Cosentino.
WBM December 2015 17
2015 Y E A R
IN REVIEW
Merger & Acquisition Review
Steady Stream of Vineyard and Facility Transactions
Financial Investors Remain Highly Selective
Vineyard values, as well as the level of vineyard transaction activity, remained high in 2015 as competition for key grape sources intensified. Contributing factors to the interest in quality vineyards included the continued growth in the U.S. wine market, an increased focus on upgrading wine quality consistent with the premiumization trend discussed earlier and the realization following the reduced 2015 harvest that grapes may again be in short supply in the near future. Buyers included wineries as well as financial investors, and the year saw a significant number of transactions involving premium North Coast vineyards, particularly in Napa. The activity began with the January purchase by Silverado Premium Properties of the 160-acre Sugarloaf East Vineyard in southern Napa Valley, which joins nearby Sugarloaf West Vineyard in Silverado’s Napa portfolio. In May, one of Napa’s most iconic properties changed hands when Duckhorn Wine Company acquired Three Palms Vineyard from the Upton family. Duckhorn has bottled a Three Palms Vineyard Merlot since 1978 and began purchasing all of the grapes from the 83-acre vineyard in 2011. In a different part of Napa, Gallo acquired Cypress Ranch and part of the Palisades Vineyard in Pope Valley, also in May. The two properties total 642 gross acres, including 258 vineyard acres planted to Cabernet Sauvignon, Merlot, Zinfandel and Malbec. In June, the Hall family, owners of Long Meadow Ranch in Napa, acquired a 145-acre property in Mendocino’s Anderson Valley planted to 69 acres of Pinot Noir, Chardonnay and Pinot Gris. They joined other Napa and Sonoma wineries that have previously invested in Anderson Valley’s potential for Burgundian varietals, including Duckhorn and Jackson Family Wines. Back in Napa, Staglin Family Vineyards joined forces with a neighbor in July to purchase the Fahrig Ranch property that adjoins both of their vineyards. Also in July, a private investment group purchased Circle S Ranch, an approximately 1,500-acre property in Napa’s Atlas Peak appellation with 26 acres planted to Cabernet Sauvignon and over 200 additional plantable acres. In August, Russian River Partners, a vineyard investment fund, acquired the 31-acre Platt Vineyard, a far western Sonoma Coast vineyard that supplies grapes to a number of highly-regarded Sonoma boutique Pinot Noir and Chardonnay producers. Judy Jordan, founder and recent seller of J Vineyards, jumped back into the fray in September with the purchase of two vineyards in Oregon’s Willamette Valley and one in Napa Valley through the Capra Company, her vineyard company established to fund youth mentorship programs. There was an active market for production and hospitality assets of all sizes in 2015 as a number of facilities changed hands. This interest in facilities reflects the increasing need for production capacity to accommodate market growth, as well as the escalating cost and uncertainty involved in building new facilities in many regions. The huge Asti winery, shed by Treasury Wine Estates as part of its global business rationalization and acquired by Gallo in July, represents an additional 2.5 million cases of production capacity for Gallo in Northern Sonoma, complementing its existing 4.9 million case Healdsburg facility. This is a facility that probably could not be built in today’s Sonoma County regulatory environment. There were two notable Napa facility transactions involving long-established industry names. In January, Heitz Wine Cellars purchased the Triere Estate Vineyard in the Oak Knoll District, which included a production facility with a 45,000-gallon permit. In March, Cuvaison completed its transition to being a 100 percent Carneros-based estate winery with the sale of its original Calistoga facility on the Silverado Trail to a private investment group. The buyer also took over the facility’s existing custom processing business.
The term “financial investor” includes a broad spectrum of private equity firms, family offices and specialized equity and debt funds in the business of making direct private investments on behalf of their limited partners. More than a few of these entities have historically spent time analyzing the wine industry, attracted by its track record of steady market growth. Relatively few have actually invested, typically citing the industry’s convoluted distribution structure, the lack of a public market exit option for all but the largest wineries and competition from the high multiples offered by strategic buyers. Some notable historical exceptions include GI Partners (Duckhorn), Champ Private Equity (Accolade Wines), TPG/Vincraft (Kosta Browne) and Madison Capital (Kirkland Ranch). This year was no exception to the pattern, and the few deals that actually closed tended to involve investors with pre-existing industry connections. In January, J.W. Childs, a Boston-based private equity firm that specializes in consumer investments, announced their acquisition of TPG/Vincraft’s equity stake in Kosta Browne Winery. The founding partner of the firm, John Childs, had a pre-existing relationship with Michael Browne and was an original investor in Browne’s CIRQ Estate. Also in January, a private investor group acquired a majority interest in Brewer-Clifton, one of the top producers of luxury Pinot Noir and Chardonnay from the Sta. Rita Hills appellation. The investor group is led by Ken Fredrickson, a Master Sommelier and founder of a fine wine importer and distributor in Chicago.
18 December 2015 WBM
Continued Activity It was a busy year in all sectors of the industry, with a broad variety of buyers pursuing brand, vineyard and facilities acquisitions. We anticipate continued strength in the M&A market in 2016, particularly in the vineyard sector in the wake of the smaller 2015 harvest as wineries move to secure future sources of supply. With the premiumization trend in consumer purchasing behavior apparently here to stay, we expect that acquirers will continue to show a high degree of interest in premium brands positioned over $20 per bottle, especially those demonstrating rapid growth and strong distribution. WBM
About Zepponi & Company Zepponi & Company is a mergers and acquisitions advisory firm dedicated exclusively to the global alcohol beverage industry. Headquartered in Santa Rosa, California, the firm’s three principals, Mario Zepponi, Matt Franklin and Joe Ciatti, are established wine industry veterans, with expertise in strategic transaction analysis, valuations and creativity in structuring complex transactions. Zepponi & Company served as advisor on a number of notable transactions in 2015, including the acquisition of the Meiomi brand by Constellation Brands, in which the firm served as advisor to the buyer. For more information, please visit www.zepponi.com.
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2015 Y E A R
IN REVIEW
2015 Top People Moves Bob Cabral
George Coope
director of winemaking | Three Sticks Wines
senior vice president | Zepponi & Company
Bob Cabral stepped down from his post as winemaker at famed Williams Selyem in 2014 after 16 years of leading
Veteran food and beverage industry investment banker George Coope joined Northern California-based merger and acquisition advisor Zepponi & Company in February. As the senior vice president, he is responsible for project management and market analysis in the firm’s core wine business, as well as its broader activities in the food and beverage industry. Prior to joining Zepponi & Company, Coope held senior roles at several boutique investment banks in San Francisco and was a founding member of the consumer packaged goods group at Hambrecht & Quist, LLC. Coope also worked in research, development and operations at Miller Brewing Company. He is a former director of Patz & Hall Wine Company and The Coppola Companies. Coope completed his undergraduate degree at Stanford and received his MBA from Harvard and a master’s degree in enology from the University of California, Davis. (See George’s article in this issue, page 14).
the team. Less than a year later, the Pinot Noir specialist made news when he took the director of winemaking position at Three Sticks Wines in Sonoma. “I’ve explored many opportunities since announcing my departure from Williams Selyem last year, and joining the Three Sticks team is the perfect opportunity for me,” said Cabral. “Bill and I share a focused passion for Pinot Noir and Chardonnay, and he is willing to provide the resources I need to continue to make what I expect to be the best wines of my career. I cannot express how much I’m looking forward to our collaboration together. I have longed to work with the grapes from the iconic Durell and Gap’s Crown vineyards. The opportunity to work with these vineyards and Ryan Prichard again sealed the deal for me.” Cabral is a fourth-generation farmer and grape grower from the San Joaquin Valley, who grew up pruning vines and harvesting grapes on his family’s 70-acre ranch near Escalon, California. He joined Williams Selyem in 1998 after previous winemaking positions at DeLoach Vineyards, Kunde Family Winery, Alderbrook Winery and Hartford Court.
Tyler Galts estate president | Madrone Vineyards Estate Tony Stewart, proprietor of Glen Ellen’s Madrone Vineyards Estate, named Tyler Galts as estate president. Galts
comes to Sonoma from British Colombia’s Okanagan Valley where he was a key leader in the development of the Stewart Family’s Quail’s Gate Winery. He joined Madrone Vineyards Estate in January 2015 to oversee the historic estate and its production, marketing and hospitality teams. A native of Calgary, Galts held the role of chief operations officer at Quail’s Gate Winery for 12 years. He oversaw the winery’s production and cellar operations, sales, marketing and distribution, along with the Old Vines Restaurant, hospitality center and visitor programs. Prior to Quail’s Gate, Stewart was based in Ireland, where he worked in senior management for multinational companies, including Elan Pharmaceuticals and Bausch & Lomb. He holds a Master of Science degree from Sheffield University in the U.K. and the WSET Diploma. 20 December 2015 WBM
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2015 Y E A R
IN REVIEW
Top People Moves
Mark Greenspan
Tom Rinaldi
president | American Society for Enology and Viticulture
winemaker | Pellet Estate
Mark Greenspan, president of Advanced Viticulture Inc. and Wine Business Monthly grape growing columnist, was confirmed to serve as the American Society for Enology and Viticulture (ASEV) 2015-2016 president, succeeding Lise Asimont of Francis Ford Coppola Presents.
“Throughout my career, ASEV has been the go-to source for reliable, thoughtful research and science that has been critical to my success and that of my vineyard clients. It’s a real honor to serve as the Society’s new president and to hopefully carry on the impressive work of Lise and the other dedicated ASEV past presidents,” Greenspan said. Greenspan, a Sonoma County resident, provides vineyard consultation in water management, nutrient management, precision viticulture and vineyard design, establishment and management. He has operated Advanced Viticulture for more than 10 years. Previously, he was the viticulture research manager at E&J Gallo, responsible for viticulture experiments on the North Coast and collaborative projects throughout the state of California.
Dan Howard executive director | American Society for Enology and Viticulture After more than three decades of leadership, Lyndie Boulton retired as executive director of the ASEV at the end of June. Replacing her is assistant executive director Dan Howard, who has co-managed operations with Boulton since joining the ASEV in 1996. “Having the opportunity to work under Lyndie’s tutelage has been invaluable. I look forward to carrying on her stewardship and working closely with the Board to explore new opportunities to expand the mission and value of ASEV. I’m excited to play a role in building on the impressive platform Lyndie, the board and hundreds of dedicated member volunteers have built over the last 65 years,” Howard said. Howard’s years of experience include interfacing directly with the ASEV board of directors in the governance and fiscal management of ASEV, playing a key role in the overall operations of ASEV and the Unified Wine & Grape Symposium, and is the anchor staff member for technological development, the website, communications and all member services inclusive of the American Journal of Enology and Viticulture.
In May, Tom Rinaldi joined the Pellet Estate team as winemaker, responsible for managing all aspects of winemaking and production. “I’m energized and thrilled to be joining the Pellet Estate team,” he said. “We are offered only a few chances in a lifetime to do something truly great, and I have certainly had my share. I am honored to be working with Pellet Estate, making wine from this historic site.” Rinaldi’s wine career began at Freemark Abbey, an experience he calls “a great job and a great honor.” In 1978, he became the founding winemaker at Duckhorn Vineyards. After 22 vintages, Rinaldi left that position to help launch Provenance Vineyards and Hewitt Vineyard from the ground up. His 2010 Hewitt Vineyard Cabernet Sauvignon was named to the Wine Spectator’s Top 10 in the world for 2013 and the #1 wine in California.
WBM December 2015 23
2015 Y E A R
IN REVIEW
Ted Seghesio general manager and winemaker | Seghesio Family Vineyards In January, Seghesio Family Vineyards announced that long-time winemaker Ted Seghesio would also oversee all daily winery and cellar operations. Ted, a fourth-generation Seghesio, has been running the wine program for more than 30 years. “The more than three decades I have been winemaker at Seghesio Family Vineyards have been a deeply rewarding labor of love,” said Seghesio. “I look forward to continuing to build upon the legacy that my great grandparents, Edoardo and Angela Seghesio, started when they first planted vines at Home Ranch in Alexander Valley in 1895.” Ted Seghesio grew up on the property adjacent to the winery and developed great respect for the family business at an early age. After graduating from University of the Pacific in 1975 with a bachelor’s degree in business, he returned home and began working in the vineyards and was inspired to enroll in enology courses at the University of California, Davis. From there, he and his family began a mission to convert the bulk winery to premium varietal production, purchasing oak barrels and stainless steel fermenters. The first Seghesio wines were introduced in 1983.
Steven Spadarotto co-chief executive officer | Francis Ford Coppola Presents Steven Spadarotto, former vice president of Ste. Michelle Wine Estates, joined the Francis Ford Coppola Presents (FFCP)
team as the co-CEO in early March. With more than 27 years of experience, he has served in high-level positions at Diageo Chateau and Estate Wines, KendallJackson Wine Estates /Jackson Family Farms, Cambria Winery & Vineyards and Clos Pegase. Spadarotto will oversee business endeavors, including Francis Ford Coppola Winery (FFCW) in Geyserville and FFCP’s second Sonoma County winery purchase, the former historic Geyser Peak facility acquired in 2013, which is yet-to-be-named and operated by FFCW’s American Pioneer Wine Growers division. He will also spearhead efforts for the Coppola Resorts, a collection of boutique hotel properties located in off-the-beaten-path destinations, including Belize, Guatemala and Basilicata, Italy. Café Zoetrope in San Francisco and Mammarella’s Foods, a variety of premium organic pastas and sauces, will also fall under Spadarotto’s responsibilities. Inglenook remains completely separate and independent from FFCP’s operations.
24 December 2015 WBM
Top People Moves “I am honored to have been chosen for this role and excited to be a part of the company’s future,” said Spadarotto. “Mr. Coppola, one of the most talented visionaries in the industry, is graciously presenting me with a remarkable opportunity to continue to push the envelope on innovation alongside him.”
Carolyn Stark executive director | Sonoma County Vintners Carolyn Stark took over the lead role
of the advocacy and trade marketing association Sonoma County Vintners in February, following in the footsteps of Honore Comfort, who served in the position for nine years. Previously, Stark was the executive director for Sonoma County BEST, a program designed to provide Sonoma County businesses with the information, resources and assistance needed to grow and succeed. There, she led an economic development initiative that promotes the expansion of business in the area, working closely with industry and community leaders across many different sectors to develop programs that provided direct value to participants. “I am thrilled to take over as executive director of Sonoma County Vintners,” said Stark. “I look forward to leveraging the momentum generated by the success of 2014, and reaching even more consumers, media and trade around the world to promote Sonoma County wine.”
E.B. “Pete” Downs consulting enologist | ASEV Merit Award Consulting enologist and retired senior vice president E.B. “Pete” Downs of Kendall-Jackson Winery joins a prestigious group of wine and grape industry leaders to receive the American Society for Enology and Viticulture’s (ASEV) Merit Award for outstanding contribution to the society and the industry. As the external affairs senior vice president for Kendall-Jackson Winery, Downs worked with legislators, regulators and other members of the industry on a local, state, national and international level. He served as an advisor for vital industry issues such as wine shipment regulations, and his efforts were pivotal in winning USDA funding for research and control of the spread of the Glassy-winged sharpshooters and Pierce’s disease. He was also part of the World Wine Trade Group that worked to minimize international trade barriers through international labeling requirements. WBM
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Save the Date March 2, 2016 2ND ANNUAL
INNOVATION+QUALITY A one-of-a-kind forum — for ultra-premium wineries — focused on innovations that advance wine quality. Charles Krug Winery | Napa Valley C O M M U N I T Y PA R T N E R
PRESENTED BY
Napa County Farm Bureau
WINE BUSINESS MONTHLY
It’s official. 03.04.15
Business Monthly hosted the first Innovation + Quality conference, an exclusive gathering for ultrapremium wineries dedicated to the concept of using innovation to advance wine quality.
For more information call 707-940-3920, or visit www.winebusinessIQ.com
400 winemakers there performed a taste test comparing wines made in oak, stainless steel and concrete. It was not necessary to count the votes.
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Wineries that attended IQ 2015 A To Z Wineworks Adelsheim Vineyard American Pioneer Winegrowers-The White Doe Amici Cellars Antica Napa Valley Appellations/Italics Winegrowers Araujo Estate Wines Artesa Vineyards & Winery Aubert Wines Aver Family Vineyards Baldacci Family Vineyards Ballentine Vineyards Baxter Winery/ Philippe-Lorraine Wine Beaulieu Vineyard Bedrock Wine Co. Bella Vineyards & Wine Caves Benessere Vineyards Benziger Family Winery Bevan Cellars Bin to Bottle Winery Black Hills Estate Winery Blackbird Vineyards Bokisch Vineyards Bourassa Vineyards Brack Mountain Wine Co./ Enos Vineyards Bremer Family Winery Brian Arden Wines Brick & Mortar/ MSix Wine Group Burgess Cellars C K Mondavi Cakebread Cellars Calcareous Vineyard Caldwell Winery Calera Wine Co. Calluna Vineyards Campana Ranch Winery Canihan Family Winery Cardinale & Lokoya Carneros Vintners Catena Zapata Celia Welch Wines Chappellet Winery Charthia Cellars Chateau Boswell Chateau Margene Chateau Montelena Winery Chateau St. Jean Winery & Vineyards Clos Du Val Wine Co. Colgin Cellars College Cellars of Walla Walla Columbia Crest Winery Conarium Wines Conn Creek Winery
Constant-Diamond Mountain Vineyard Constellation Wines Continuum Estate Corison Winery Courtesan Wines Covert Estate Covington Cellars Creekside Cellars Croma Vera Wines Cuvaison Estate Wines Dalla Valle Vineyards DAOU Vineyards Dark Matter Wines David Fulton Winery Del Dotto Vineyards Detert Family Vineyards Domaine Anderson Domaine Carneros Dominus Estate Don Sebastiani & Sons Donum Estate Duckhorn Vineyards DuMOL Winery E & J Gallo Winery Edge Hill/Rudd Oakville Estate Elyse Winery Envolve Winery Epoch Estate Wines Expression Wine Fantesca Estate & Winery Far Niente Winery Farm Collective Winery Fazeli Cellars Fisher Vineyards Francis Ford Coppola Winery Frank Family Vineyards Frog’s Leap Winery Gandona Estate Geyser Peak Winery Goosecross Cellars Greyscale Wines Grochau Cellars Groth Vineyards & Winery Hagafen Cellars Hall Wines Halter Ranch Vineyard Hanzell Vineyards Hartwell Vineyards Heitz Wine Cellars Herb Lamb Vineyards Heringer Estates Hess Collection Winery Hill Family Estate Hindsight Wines Holman Ranch Honig Vineyard & Winery
S I LV E R S P O N S O R S
Hope & Grace Wines House Family Winery Ideology Cellars Inglenook Invisible Hand Wines J Lohr Vineyards & Wines J Vineyards & Winery Jackson Family Wines James Family Cellars Jamieson Ranch Vineyards Jarvis Jessie’s Grove Winery Joel Gott Wines Joseph Phelps Vineyards/ Freestone Vineyards Kaz Winery Kelly Fleming Wines King Estate Winery Kitchak Cellars Kosta Browne Wines Kuleto Estate Winery Ladera Vineyards Lancaster Estate Larkmead Vineyards Las Positas Vineyards Lasseter Family Winery Laura Michael Wines & Zahtila Vineyards L’Ecole No 41 Long Meadow Ranch Winery Lucia Vineyards & Winery/ Pisoni Family MacRostie Winery & Vineyards Mahoney Vineyards Marciano Estate Napa Vineland Winery Marimar Estate Vineyards & Winery Martinelli Winery Matteo WinesNorthwest Wine Filtration Mauritson Family Winery Maxville Lake Winery Mayacamas Vineyards McEvoy Ranch Meander Wines Melrose Vineyards Merryvale Vineyards Merus Wines Michael Mondavi Family Estate Miner Family Winery Monticello Vineyards Mueller Winery/ Robert Mueller Cellars Mumm Napa Napa Cellars Napa Valley College Estate Winery Napa Valley Reserve
Napa Wine Co.Bonded Winery Number 9 Newsome-Harlow Winery Nichelini Family Winery Nickel & Nickel Nicolette Christopher Cellars Olabisi Wines O’Neill Vintners & Distillers Orpheus Wines O’Shaughnessy Estate Winery Other Guys Ovid Napa Valley Paoletti Estates Winery Paradox Wines Parrish Family Vineyard Passalacqua Winery Pasterick WineVineyard of Pasterick Paul Hobbs Perkins & Harter Phifer Pavitt Wines Pine & Brown Winery Pine Ridge Vineyards Plan B Wine Cellars Plata Wine Partners Plumpjack Winery Ponzi Vineyards Pott Wine Purple Wine & Spirits Co./ Sonoma Wine Co. Quintessa Vineyards Quivira Vineyards Quixote Winery Ranch Winery Ravenswood Winery Raymond Vineyards Realm Cellars Reynolds Family Winery Ridge Vineyards Robert Biale Vineyards Robledo Family Winery Rocca Family Vineyards Rombauer Vineyards Rosenblum Cellars Rudd Wines Winery Rutherford Grove Winery Rutherford Hill Winery/ Terlato Wines Saintsbury Schramsberg Vineyards & J Davies Vineyards Schug Carneros Estate Winery Schweiger Vineyards & Winery Screaming Eagle Winery Seghesio Family Vineyards Seven Stones Winery Shafer Vineyards Shale Oak Winery
Signorello Estate Silver Oak Cellars Sinclair Estate Vineyards Sinegal Family Estate Sloan Estate Sonoma Valley Custom Wine Sonoma-Cutrer Vineyards South Coast Winery, Resort & Spa Spottswoode Winery Spring Mountain Vineyard St. Supéry Estate Vineyards & Winery Staglin Family Vineyard Stag’s Leap Wine Cellars Ste. Michelle Wine Estates/ Chateau Ste. Michelle Steele Canyon Cellars Steltzner Vineyards Sterling Vineyards Steven Kent Portfolio Stonestreet Storybook Mountain Vineyards Swanson Vineyards & Winery Talbott Vineyards Talisman Wines Tangles Vineyard and Winery Terroir Napa Valley Wines Testarossa Winery Three Sticks/ Price Family Vineyards Toquade Wines/ Christine’s Wines Tournesol Wine Trahan Winery Trattore Estate Wines Treasury Wine Estates Treefort Valley View Vintners Vincent Arroyo Winery Vindemia Vineyards & Winery Vineyard 29 Vineyard 7 & 8 Vivier Willamette Valley Vineyards William Harrison Vineyards & Winery Windsor Oaks Winery Wine Foundry Wine Group Winery Exchange Wise Villa Winery Wood Family Vineyards & Winery Z D Wines
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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.
Nitrogen Heaters Cryogenic control for the winemaker
filling or corking with inert gas. By now most people are aware that nitrogen is the gas of choice, primarily because it is inexpensive and has a low absorption rate. Unfortunately, liquid nitrogen in dewars is contained at very low temperatures and under high pressure, which creates some unique problems for the winery. It might be time for you to consider the use of a nitrogen heater. N2 heaters have been around for some time, but every year I still see wineries that could benefit from using them. Several companies manufacture heaters, but recently while visiting a mobile bottler, I discovered a compact, portable unit from Cryogenics Experts, Inc. (CEXI) out of Oxnard, California. A nitrogen heater is a great add-on for three reasons. The first and most obvious reason is to eliminate that chunk of ice that often forms on your regulators. At minus 320° F, liquid nitrogen is most often contained in stand-up or portable dewars on wheels. Before it is dispensed, the gas releases anywhere from 1,700 to 2,000 liters of internal N2 liquid, which passes through an internal vaporizer (a coil) to increase the temperature to around minus 50 degrees. From there it passes through regulators to maintain an even pounds per square inch (PSI) rate to the monoblock, the flow rate always based on manufacturer specifications. It is this constant flow through the regulators that can eventually cause the internal valve to freeze. Unfortunately, when the valve freezes, it usually does so in the open position. The heater I saw from CEXI was the model HBA-ETH-120. Called an “electric trim heater,” it has a rather simplistic assembly with a control box for setting temperature, a breaker switch and an external plate that is warmed with 110V electrical (500 or 1,000 watt). N2 enters cold and exits at ambient temperature—around 70 degrees. Power is supplied with an extension cord, and the portable unit is simply suspended on the dewar with a carbineer. It does not get any easier than that. The second reason is that when N2 is heated, it expands incredibly, and that is beneficial to the winery. When taking N2 from minus 320° F to ambient temperature, the ratio or coefficient of expansion is 692 percent. Having sufficient N2 on bottling day is paramount, and wineries, which are generally required to supply the gas, are notorious for running out. B O T T L I N G D AY I N V O L V E S S P A R G I N G ,
28 December 2015 WBM
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The compact electrical trim heater clips to a dewar and raises the N2 temperature to an ambient 70° F.
This is not good when trying to maintain a daily production schedule and why many mobile bottling trailers are now adopting small, portable nitrogen generators. (See What’s Cool, WBM, January 2011.) If you run out of N2, the bottling line stops until a replacement dewar is delivered. Unfortunately, purchasing a generator is probably not in the budget of most small wineries. I spoke with Greg Quinn, owner/operator of mobile bottling company Top Shelf Bottling, LLC. For Quinn, the heater is a backup insurance policy.
BILL PREGLER
The electrical box contains only a temperature control unit and a breaker.
I spoke with several gas suppliers who confirmed Quinn’s assertion that the heater can extend the life of a dewar dramatically: by up to two-thirds. While this may sound like a negative to the gas company, they really make their money by renting you the dewar. What I heard next really caught my attention. The third reason a nitrogen heater is a great add-on: it results in a dramatic improvement in preventing O2 pickup. Sparging a bottle with warmed N2 has made a substantial difference and is confirmed by winemakers on Quinn’s client list as a “terrific resource.” The good news is that CEXI trim heaters are distributed through gas supply houses and in many cases are available for rent. In my Sonoma County neighborhood, Complete Welders Supply will rent and deliver the dewar and add a trim heater for a mere $8. How could a winemaker pass that up?
BUY SELL
What’s Cool:
As expected, many other industries understand the concept behind high-purity gas vaporization and heating to maintain consistent gas temperature and flow. In electronics it is used for chip manufacturing, in the military for engine and composite research, and it is certainly widespread in the pharmaceutical and medical industries, including operating rooms. “Fin design” heaters are also available, are almost like a radiator in reverse and are used to dissipate the “coldness” of N2. I feel, however, an electrical unit with internal temperature control would best maintain the exact flow requirements of the monoblock manufacturer. What is cool is that these units are available through national distribution and available to gas suppliers everywhere. WBM
For more information contact: Rob Worcester, technical support, at Cryogenics Experts, Inc. at 1-805-981-4500 or www.cexi.com.
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PUBLICATION READY WBM December 2015 29 IF APPROVED
winemaking
2015 WBM Barrel Survey Report
Does Anyone Know How Much Water it Takes to Maintain a Barrel? Curtis Phillips 2015 Wine Business Monthly Barrel Survey are in and, once again, the news dwarfed the significance of the survey results as the wine industry navigated through events out of their control. It seems like no sooner than we started getting the lost wine and broken barrels from the South Napa earthquake cleaned up that we were worrying about drought, wildfires and a lower-than-estimated harvest in several, but by no means all, North American wine-growing regions. The “short” harvest is the most immediate of these events and only began to be apparent after the 2015 WBM Barrel Survey data had been gathered. The 2015 harvest did come in at lower levels than expected for several winegrowing regions in California. “I think we all recognized that it was going to be a smaller harvest, but the amount down was not apparent until we started actually picking,” said Groth winemaker, Cameron Parry. “Early in the season, we were guessing 10 to 15 percent down, but the reality was more like 15 to 30 percent down. In terms of barrels, here at Groth, we have historically ordered about 60 percent of our projected barrel needs early (March-April) for delivery in August, and then made a second barrel order after veraison for the balance—adjusting based on what we are seeing in the vineyard. Because of this strategy, we were able to avoid carrying over any barrels for our Oakville Cabernet program, and minimize the carry over on the other programs.” At Goldeneye, winemaker Michael Fay noted that, “While our harvest yields are indeed lower than the prior three harvests, we are seeing a healthy return to normal 10-year yield averages for our estate vineyards. We’ve had an embarrassment of riches of sorts for the last three harvests, all of which were T H E R E S U LT S F R O M T H E
PHOTOS SCOTT SUMMERS
30 December 2015 WBM
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.
about 25 percent above average. Overall, our 2015 harvest may be 5 percent or so lower-than-average at most. Therefore I held back about 5 percent of our new barrels to barrel down into new oak percentages according to plan but allowing for flexibility to swap with older barrels after further evaluation of the wines. So far the wines are well-structured and concentrated with great fruit character so we will probably hold back the remaining new oak unless we come across lots that need a little boost to their backbone.” Meanwhile Oregon seems to have had a larger than average year. Bryan Croft, winemaker at Firesteed Cellars explained, “Our yields were at the high end of normal in the Willamette Valley this year, though not as high as some of the lag phase crop estimates.” At the south-end of the Willamette, Aaron Lieberman, winemaker for Iris Vineyards, stated that, “The Oregon harvest was rather larger again this year than most people expected it to be when they ordered barrels. Despite that we managed to arrange our fruit contracts in such a way that we produced about the amount of wine we wanted to for this vintage.” As we should expect, the yields were not the same everywhere. Furthermore, even a modest shortfall seems more significant immediately after a string of big harvests. Combined with a three- to six-month lag between ordering barrels and filling them and a tendency among winemakers to make sure that their high-value, barrel-aged, wine programs are covered even in “short” years and we can see record barrel sales alongside headlines trumpeting a greatly reduced harvest in some regions.
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2015 WBM Barrel Survey Report
CHART 1
Will the number of barrels your winery purchases.... (by year-to-year comparison, and by winery size) increase
100%
decrease
stay the same
90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2006 vs 2005 2007 vs 2006 WBM 2015 BARREL SURVEY
2008 vs 2007
2009 vs 2008 2010 vs 2009
2011 vs 2010 2012 vs 2011 2014 vs 2013
Year-toYear Comparison
Expected Barrel Purchases Thirty-seven percent of the respondents expected to increase the number of barrels purchased in 2015 over 2014 with a comparable 41 percent of the respondents noting no change in the number of barrels purchased (C H A R T 1 ). This represents a slight decline from last year in the number of wineries expecting to increase their barrel purchases. The survey results for mid-sized and large wineries are in contrast with the results for the industry as a whole. More than half (56 percent) of mid-sized and large wineries expect to increase barrel purchases in 2015 over those made in 2014. Mid-sized and large wineries were slightly more likely to say that they were either increasing or maintaining their barrel purchases. Small wineries were twice as likely to be decreasing their barrel purchases (22 percent versus 11 percent). This should mean that the wine companies that buy the most barrels are expecting to buy more this year. Thus, in spite of the small decline in the number of wineries stating that they expect to increase barrel purchases, barrel producers may end up having a very good, or even a record, year as industry-wide barrel purchases are driven by a relatively small number of large barrel programs.
32 December 2015 WBM
2015 vs 2014
Small
Mid & Large
Winery Size 2015 vs 2014
What is the Ratio of Barrels You are Going to Purchase This Year? The ratios between the three main oak types (French, American and Eastern European oak), are consistent with previous surveys (C H A R T 2 ). Neither American nor Eastern European oak have made significant inroads into the number of wineries that rely on French oak for most of their barrels despite being slightly more economical and, in the case of Eastern European oak, having a comparable flavor and aroma impact. Eastern European oak barrels are almost exclusively made from Quercus petraea (AKA Quercus sessiliflora or sessile oak) while French oak barrels are made from both Quercus petraea, the closely related Quercus robur (AKA Quercus pedunculiflora), and the wild fertile hybrid between the two (Quercus x rosacea). The most noticeable difference between the two species is whether or not their acorns have stalks. Indeed, that’s what the names Q. sessiliflora and Q. pedunculiflora refer to. Otherwise the two species are remarkably similar. In the absence of genetic fingerprinting, even experts have difficulty telling the lumber of the two species apart. It should be no surprise then that for winemaking, the main differences between the two seem to be more driven by the particular environmental and soil characteristics of their source forests than by their genotype.
CHART 2
What is the percent ratio of barrels you are going to purchase this year? (by year and winery size) Frenck Oak
100%
American Oak
Eastern European Oak
90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2009 WBM 2015 BARREL SURVEY
2010
2011
2012
2014
2015
Mid & Large
Winery Size
Year
American white oak (Quercus alba) is a somewhat different story, being a rather different species and having significantly different flavor and aroma impacts on wine. All the same, the doggedly persistent hold American oak has on 25 to 30 percent of the barrel market would seem to be driven by more than a lower price. If price was the sole driver, we would expect to see a steady
Small
2015
decline in the percentage of American oak barrels bought each year as even American oak barrels have become too expensive for the market segments in which they are currently used. Since this is not happening, we can surmise that the economic pressures are being countered by winemaking and wine quality considerations. Put another way, each oak type has found a stable market niche.
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WBM December 2015 33
2015 WBM Barrel Survey Report
At What Price Point Do You Consider Moving from Barrels to Alternatives? The discussion of oak species (above) is related to the question of: At which price point does it no longer makes sense to use barrels at all? The migration from a traditional Êlevage (barrel-aging) to the use of barrel alternatives and/or micro-oxygenation has been touted as an inevitable cost-cutting move, but the survey data has not borne this out (C H A R T 3 ). Instead, while there seems to be a secure niche for barrel alternatives, traditional barrels still dominate. As we have noted in previous survey reports, one of the reasons that we don’t see any significant movement away from barrels to barrel alternatives is that the change already happened some time ago. Those wineries that were interested in retiring most of their barrels did so many years ago. If we separate out mid-sized and large wineries from the overall survey results (C H A R T 4 ), we see that they are much less likely to use only oak barrels. Interestingly, the number wineries only alternatives is not CHAR T 3 At what price of point do that youuse consider moving from barrels dependent on the winery size. to barrel alternatives? 100% C90% HART 3 80% 100%
At what price point do you consider moving from barrels to barrel alternatives?
70% 90% 60% 80% 50% 70% 40% 60% 30% 50% 20% 40% 10% 30% 0% 20% 10%
We We Under $7 only use only use barrels alternatives
$7 - $10
$10 - $14
$14 - $25
Over $25
WBM 2015 BARREL SURVEY
0% We We Under $7 $7 - $10 only use only use C H A R barrels T 4 At what price point do alternatives
$10 - $14
$14 - $25
Over $25
you consider moving WBM 2015 BARREL SURVEY from barrels to barrel alternatives?
100% 90% 80%
By Winery Size Small
Mid & Large
70% 60% 50% 40% 30% 20% 10% 0% We We Under $7 only use only use barrels alternatives
34 December 2015 WBM
$7 - $10
$10 - $14
$14 - $25
Over $25
WBM 2015 BARREL SURVEY
How Many Gallons of Water Per Barrel Do You Use?
Methodology
Almost half (45 percent) of all wineries don’t know how much water they are using to clean barrels (C H A R T 5 ). This is almost exactly the same response we received the last time we asked this question in the 2011 WBM Barrel Survey. There is simply no way to control what one does not measure. Aside from raising the spectre of enforced water monitoring, which remains a real possibility, controlling water use is pretty surefire money saver. Water is money. Artesian wells notwithstanding, even private well water costs money to lift out of the ground and lift to a cistern or otherwise pressurize for a useful back-pressure. Every untracked gallon is money simply flushed to the leach field.
CHART 5
How many gallons of water per barrel do you use?
100%
Year Comparison
90%
2011
80%
2015
70%
The 2015 Wine Business Monthly Barrel Survey received 227 responses. Slightly less than half (46 percent) of the respondents produce fewer than 5,000 cases, about a third (32 percent) produce 5,000 to 24,999 cases and the remaining 22 percent produce 25,000 or more cases. Due to the structure of the North American wine industry, the results are heavily skewed toward small wineries that produce fewer than 5,000 cases of wine per year. As a result, although the results describe the overall industry, large and mid-sized wineries may deviate significantly from the survey results without having much impact on the overall trends. Eighty-nine percent of the survey respondents reported their job function as winemaker, 32 percent as president/GM, 41 percent as cellar/production, 24 percent as vineyard management/viticulture, 18 percent as purchasing/ finance, 19 percent as sales/marketing, 13 percent as tasting room and 2.7 percent as “other” (respondents were able to choose more than one function). The purpose of the survey was to determine trends in the usage of oak barrels and barrel alternatives. Please note that the findings of this survey are meant to offer a general picture of wine industry barrel use. It is not a scientific study and should be used as a tool and a point of reference for further inquiry. Thank you to all respondents who participated in this year’s survey.
60% 50% 40% 30% 20%
2 BARREL STEAMING MACHINE
10%
AUTOMATED STEAMING!
0% 1
2
WBM 2015 BARREL SURVEY
3
4
Gallons
5
6
7 or more
Don’t know
Small
Mid & Large
Winery Size 2015
The Wrap As noted in previous WBM Barrel Surveys, it looks like most wineries that are going to completely abandon barrel-aging already have done so. Large wineries are the most likely to increase their barrel purchases this year. Most of the wine industry doesn’t know how much water they are using to wash and maintain their cooperage. WBM
e! SavW E W Nater
Caveats The WBM surveys are intended to focus on which winery practices are adopted throughout a highly fragmented wine industry. Despite the roughly 8,990 of wineries in North America, only a handful of wine companies account for most of the wine produced. As a consequence, the results of the WBM Barrel Survey are heavily skewed in the opposite direction and toward small wineries that produce fewer than 5,000 cases of wine per year. Although the survey results describe the overall industry, large and mid-sized wineries may deviate significantly from the survey results without having much impact on the overall trends.
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winemaking
Homogenizing Oak Barrels A variety of cooperages have recently introduced barrels that allegedly guarantee the homogeneity of the tannins and even the chemical components in the barrel from one vintage to the next. John Intardonato
John Intardonato lives in the Napa Valley and has been a wine writer for the St. Helena Star, the Napa Register, Napa Valley Life and WineNews magazine. His articles have reappeared in national and international magazines and websites, and referenced in Wikipedia. He has traveled extensively to the wine regions of Europe, from the Crimea to Oporto.
Vicard Generation 7 According to Christy Thomas, Napa-based business development manager for Vicard Generation 7, “No one likes to talk about the great variation found in the traditional oak barrel. We now know that the grain and tannins can differ not only from one tree to another, they can differ within the same tree.” To remedy this dilemma, she said, Vicard, which has been making barrels for six generations, is offering a new series from its research division called Generation 7 (Gen 7). “We called it our ‘homogenized’ barrel,” Thomas said. Unlike traditional barrels, where oak staves are assembled without regard for tannin potential or consistency, the Gen 7 is designed to produce the same tannin profile (TP) from year to year. “It gives you a wine style you can rely on,” said Thomas. “It’s a new approach to oak. We have a fast and reliable methodology to measure ellagitannin 36 December 2015 WBM
content in the untoasted oak, and combined with our computer-driven toasting system, we can reproduce a truly homogeneous barrel that will remain identical in each new shipment from year to year.” Each stave is scanned for its ellagitannin content using near infrared spectroscopy (NIRS), a scanning technique using the electro-magnetic spectrum, which gives non-destructive measurements quickly and accurately. The staves are then sorted into three categories according to their tannin concentration, and barrels are then coopered based on these tannin levels. Staves with levels below 4,000 micrograms (ugs) are tiered for low tannin potential barrels, staves having between 4,000 and 6,000 ugs are used in medium TP barrels, and wood with 6,000 ugs and above goes into high TP units. Vicard also makes a mixed blend barrel. The toasting process involves a $3.5 million computer-monitored system capable of toasting 60 barrels at a time. According to Thomas, Vicard believes direct fire-toasting by the cooper is inconsistent due to human error and ambient fluctuations. “Because 50 percent or more of tannin content is thermo-degraded during toasting and furanic compounds only begin to convert at 180° C, it is imperative to manage the toasting temperature.” The Gen 7 toasting is gradual and controlled by a thermometer in each barrel. An auger moves measured amounts of oak pellets into the furnace. A patented process keeps heat constant. The toasting time depends on TP. Low toast begins at 160° C to a gradual 185° C. A heavy toast is from 185° C to 210° C, and there are two other gradations in between. “With this process we can target areas winemakers may need help with, such as high tannins, aromatics, mouthfeel and so on,” Thomas said. “They
TONNELLERIE RADOUX
Holy Grail to producing their distinct wine style is reproducing it. Maintaining consistency from vintage to vintage is the conundrum. While coopers can’t correct this uncertainty with regard to the annual grape crop, they can help ameliorate this seasonal apprehension by providing consistency in their own, important product. Several cooperages, in fact, have introduced barrels that they claim will stabilize the oak factor—itself, a crucial component in premium wines. They are guaranteeing the homogeneity of the tannins and even the chemical components in the barrel from one vintage to the next. TO MOST WINEMAKERS, THE
Joe Harden, winemaker at Robert Mondavi Winery, is handling these
VICARD GENERATION 7
can select their own tannin and toast profile, and we can maintain it indefinitely because each barrel is computer programmed.” Geneviève Janssens, director of winemaking for Robert Mondavi Winery in Oakville, said she started using the Vicard Gen 7 when it came to market in 2013. “We purchased some of the Vicard this year, too, for the 2015 vintage. It gives a very nice profile and gives greater complexity and polish to the wine. We like the results we get from this oak arrangement,” she said. “However, we will also continue to use the different coopers we have worked with because we want to keep our diversity to maintain our style.”
barrels for the red wines. “So far, we are very pleased. It gives a nice balance. These barrels are being very respectful to our terroir by enhancing the fruit and not taking it over. Mondavi is known for its big tannins, and they do a great job of smoothing those tannins. The barrels are adding polished tannins and are bringing more length to the wine. We’re using them for the Cabernet in the Oakville, Napa Valley and Mondavi Reserve,” he said. Jeffery Stambor, winemaker at Beaulieu Vineyards in Rutherford, used the Vicard Generation 7 in 2013. “We didn’t buy any in 2014 but are buying more barrels for this year’s vintage. We are only using them with Cabernet Sauvignon and only for aging the wine. We have no thoughts of using them as fermenters. At this point, we have seen some positive, consistent differences over repeated tastings from the 2013 vintage, and we’re now looking at it in finer detail. The two parameters we’re studying are the tannin profile and the temperature of the toasting.” Stambor said he is trying them because the concept is intriguing. “We keep looking for consistency and performance, and we think it’s important to have a close relationship with your cooper, which we have had with Vicard. We also looked at and liked the process they are using. It made sense. We will still blend, but this barrel is another useful tool to help get a reproducible element in our winemaking process.” Matthew Crafton, winemaker at Chateau Montelena in Calistoga, uses Vicard Gen 7. He appreciates that he can maintain the oak tone he wants. “Oak is not the showpiece here, as it is at other wineries. Still, we are interested in these barrels as a good way to highlight who we are. We like seeing that layer of precision, that layer of consistency that these barrels show, and they’re a
at Vis B U it o us o n th if 1 ie 5 2 d 5
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Homogenizing Oak Barrels
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useful tool to maintain a consistent flavor profile. If there is any diversity, we want it in the fruit of that vintage, not in the wood. At Montelena we want the wine drinker to taste the difference in the vintage. We want our wine to be a wine of place.” Justin Seidenfeld, winemaker at Rodney Strong Vineyards, is using the Vicard Gen 7 with their reserve wines as an added component “to give our Cabernet added complexity and refinement,” he said. “It softens the edges, which gives the fruit and wine a higher refinement, an important part of what we want. The generic barrels can be too aggressive, but with these you get consistency. Last year was our first trial. Now we are going to the next step. At first we weren’t sure how these would be, so we went to Cognac to see the process. We like what we saw. We feel we have more control over the wine and now have more than 200 barrels. We like the low input tannin barrel. It wraps the fruit with oak.”
Seguin Moreau ICÔNE Chris Hansen, general manager at Seguin Moreau in Napa, said his
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company has spent 12 years in research on their product, and the barrels are being used at more than 200 wineries worldwide. He said they arrive at barrel consistency by looking at the chemical components in oak wood, which can vary in every stave. “We don’t just analyze tannin or grain. That’s a small piece of the puzzle. There are many other components in the wood, such as aromas, flavors, level of whisky lactones, sweetness and so on, so you need a full chemical profile of them,” he said.
SEGUIN MOREAU
38 December 2015 WBM
Hansen said their research has taken the study to a further level. “We have focused our research on the molecular level of oak and the chemical reactions that take place during aging, which determine a wine’s aroma and flavor quality.” ICÔNE is an exclusive process for oak wood selection by way of its chemical composition. “We identify wood’s capability of generating a particular oak profile for specific styles of wine, which we refer to as the oenological potential (OP) of the wood.” According to Hansen, Seguin Moreau takes samples of wood in quantities proportional to the surface area that each stave will occupy in the barrel. The results of the analysis determine their OP and whether the staves are suitable for the ICÔNE process. Each is precisely targeted to achieve a specific and reproducible result. If the wood does not meet the required oenological potential, it is not used. The ICÔNE process, the chemicals it is measuring and the detection method used are company secrets. Seguin Moreau offers four ICÔNE styles: • Elegance, for full-bodied, red wines from varietals that contain the highest concentrations of polyphenols. It lends structure and balance, increases volume and texture, with round and well-integrated tannins. • Blanc provides a fine oak profile, respectful of varietal aromas while providing more volume and length on the palate. It is primarily intended for high-end, white grape fermentation. • Low Aroma is American oak with an oak profile respectful of the fruit while providing olfactory complexity. • Elevation is American oak that provides an ample and expressive oak profile for a wine that is sweeter, rounder and more concentrated on the palate. Kale Anderson, director of winemaking at Pahlmeyer in Saint Helena,
said, “We’ve been using the ICÔNE since 2009 or 2010. We have more than 100 barrels and are using the Elegance profile. We like its consistency and quality. We also use traditional barrels and are using the ICÔNE as an added spice. It’s a tool on my tool belt but a tool I can use with reliability. And we’re getting killer results. I like it in our intense wines. It gives it more character, a character that shines through. It softens big mouth tannins. It intensifies the wine and softens the tannins, but I don’t think it is for lighter wines. We are trying their low aroma profile this year as well.” Christian Roguenant, winemaker at Niven Family Wine Estates in Edna Valley, San Luis Obispo, also uses Seguin Moreau ICÔNE: “These barrels are a good way to showcase your fruit, and we have been using them for five years. We use the Low Aroma for our Cab, and we get a very soothing result. The ICÔNE Blanc for Chardonnay gives a creamy richness, and wonderful aromas burst out when you open the bung hole. I think ‘sexy’ is a good word. We make our Pinot Noir in the Burgundian style, and the Elegance produces a positive impact on the wine, giving more volume, more length. “You never know from year to year what the fruit will be like in the fall, but I have to order my barrels in April. Some years the fruit can be more tannic, and the new barrels can also be too tannic. With the ICÔNE barrels, depending on the vintage, I can use them in different ratios. Sometimes it is 60 or 70 percent of the blend, sometimes only 30 percent. With traditional [barrels] you never know what you will get.”
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WBM December 2015 39
Homogenizing Oak Barrels
TONNELLERIE RADOUX
Radoux OakScan The homogenized barrels at Tonnellerie Radoux are assembled by selecting the staves according to wood quality, grain, tannin and toast. This selection is in conjunction with its registered OakScan technology, which is a unique process for measuring the content of polyphenols in oak wood. “Our scanning and sorting give us consistency within each barrel,” said Louis Zandvliet, general manager at Radoux in Santa Rosa, California. “We offer 165 profiles for the winemaker, with each profile consistent from year to year. Our researchers, in cooperation with international scientists, have developed the exclusive OakScan process, which enables them to analyze the staves instantaneously and classify them according to the level of their tannin content. We are trying to fit the barrel to the wine.” Mike Cox, winemaker, Schug Carneros Estate Winery, Sonoma, said that traditional barrels can be a little too extractive, making the wine too harsh. “The OakScan barrel gives structure without being overwhelming,” he said. “We are happy with the way they are showing the wine. The nice thing is the wood is measured and sorted accordingly. You’re guaranteed low impact wood if that’s what you want. These barrels have more consistency, and it’s not just based on the cooper making the selection. So you can just dial it in, and it keeps it at that range. I can see moving more and more to this type of barrel.” 40 December 2015 WBM
According to Zandvliet, the OakScan method represents a major step forward in the understanding and control of the raw material. It begins first with selecting wood of the highest quality. “We look for trees that are more than 160 years old and take our wood only from the base area of these trees, looking for the tightest grain.” Zandvliet said that oak has a very heterogeneous tannin make up, and traditional barrels, which do not use scanning technology, will vary widely in their tannin make up. The Radoux OakScan process incorporates NIRS technology to determine the tannin potential of each stave. This ultra-fast method selects staves to match the tannin profile of each barrel. “This year we have already scanned more than 7 million staves,” he said. Each stave is scanned and marked with the index of its tannin potential. This polyphenolic index (PI) is then calculated according to a confidential formula using the OakScan measurements. The polyphenolic richness of the stave is marked with a number from 0 to 100. Based on these numbers, the staves are separated into four selections: • Selection one is made up of staves whose PI is below 21. It is recommended for varietals that are very sensitive to excess tannin from wood.
• Selection two is made up of staves whose PI is between 21 and 56. This selection makes up the majority of Radoux’s production. It is recommended for varietals that are complete and want a richer texture. • Selection three is made of all staves whose PI is between 56 and 67. It is recommended for wine in need of more structure, which can be brought about by oak during the aging period. • Selection four is made of all staves that are over PI 67 and used for aging spirits only. “We believe that in creating an homogenized barrel, we can offer consistency and serve our customers in the best way,” Zandvliet said. “Mixing and mismatching staves causes confusion from one year to the other and can cause a customer to dislike the product. We are trying to fit the barrel to the wine so the winemaker can get the most from our barrels. This is important for wine quality and to our reputation.”
Klein added that the winery is developing a new vineyard southeast of Philo. “It has different soil, a different temperature range and the polyphenols are very different, so we are going to try some of that fruit in these barrels. We are always looking for consistency. If this approach works, it’s a win-win for everybody.”
Conclusion These “homogeneous” barrels have only come to market the past several years, and wineries are only beginning to test their worth. It appears that the winemakers who are using them, see them, at this point at least, as an added spice or a new, useful tool box addition. WBM
© 2015 StaVin Inc.
TONNELLERIE RADOUX
Jim Klein, winemaker at Navarro Winery in Anderson Valley,
Mendocino, said they used the OakScan in 2014 and also used some for this vintage. “We’re still taking a hard look at it. When working with barrels and trying to get consistency from year to year, one of the most challenging things is finding reliability from the wood. One year we got fabulous results from a regular barrel; the next year that brand was at the bottom of our list. I was skeptical about these barrels at first but so far so good. I can’t say where we are headed, but we’re pretty excited.”
One of our staff scientists, Dr. Jeff McCord has developed a micro-oxygenation system which enables stainless tanks to breathe in precisely the same manner as oak barrels. When used in union with StaVin’s array of Oak Integration Systems, The OxBox can effectively transform a stainless tank into the oak barrels of your choice. For about a third of the price.
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WBM December 2015 41
winemaking
Choosing the Best Method for Sanitizing Barrels Which method is best for your winery’s logistical and budgetary requirements? 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.
aware that there are two basic reasons why their barrels need a regularly scheduled washing: to remove Brettanomyces (Brett) and other microbial contaminants, and to remove tartrate crystal accumulation to keep the wood exposed to the wine. With the cost of an American or European oak barrel ranging anywhere from $400 to $1,200 or more, let’s face the harsh truth: maximizing a barrel’s life span is not just so a winemaker can produce good wine. It’s just as much about maximizing a winery’s return on investment. Washing, therefore, is an important part of any barrel maintenance program. While some wineries still rely on chemical-based barrel cleaning, wineries have now mainly settled into two camps—those that prefer cold or hot ozonized water flushes and those that steam clean their barrels. Also to be considered are other available methods of extending barrel life, such as dry ice blasting and the no-water-needed ultraviolet (UV) cleaning solution. With numerous cleansing methods available, choosing the right one for your winery can be tricky. A high adoption rate among wineries may validate the obvious quality of products; however, the popularity of one cleaning method over another is still subjective. What became clear from discussions with those who offer barrel cleaning solutions was the division between those companies that believe cold or hot water and ozone (pressurized or not) are best for barrel health versus the rapidly expanding camp that praises steam heat as the best barrel cleaner and sanitizer. EVERY WINEMAKER IS WELL
The Argument for Ozone John McClain, president of McClain Ozone, pioneered the use of ozone for
barrel cleaning more than 20 years ago. “When you get a barrel contaminated with Brett, you want to do two things. One, you want to kill the microbe in the barrel. Secondly, you want to get rid of the metabolic byproducts, which create the taste and odor issue in the barrel,” he said. “Let’s say you got a Brett barrel that smells like a horse blanket, and you steam it,” he continued. “Now you’ve got a very hot barrel that smells like a horse blanket. But if you take that same Brett barrel and you treat it with ozonated water, it goes everywhere oxygen goes and is a good deodorizer to boot.”
42 December 2015 WBM
McClain referenced a study out of Fresno State University that reported ozone penetrates oak about a quarter of an inch, so the spoilage organisms that the wine industries are concerned about are essentially aerobic critters. “When you use ozone on a barrel, you get a good penetration on the wood using cold water, and you’re not only killing the microbe but you’re getting rid of the metabolic byproducts. You’re oxidizing those byproducts away, so the barrel smells good when you’re done,” McClain said. He added that their cleaning protocol in drought conditions uses half the water that their clients previously used. “What we do is run ozonated water through an ozone compatible pressure washer to a high-pressure cleaner and then use cold water to clean and sanitize. It takes half the time and half the water,” he said. McClain argues that ozone gas is a better solution for barrel storage than sulfur dioxide, which can linger inside a barrel. Ozone, on the other hand, degrades to pure oxygen. “When I first started in the business, winemakers would steam the hell out of everything. Steam is hard on oak and can release the wood’s volatile flavor compounds,” McClain said. “We have had great success with ozone,” said Janet Myers, general manager and director of winemaking at Rutherford, California-based Franciscan Estate Winery and Mount Veeder Winery. “We have found ozone to be very effective for sanitizing our barrels. First we rinse the barrels in 180° F, then we switch to 150° F for three minutes for each cycle. Then we apply the ozone for 75 seconds via mechanized, high-pressure washers. The ozone is mixed with water at around 5 to 6 ppm. “Because ozone has worked so well for us, I have not felt the impetus to switch to steam. We also reuse the water. It is sent to a waste pond where it can be used to water our landscaping. The ozonated water is also recaptured and can then be used to clean floors and other areas of the winery,” explained Myers. Franciscan Estate (part of Constellation Brands) has about 27,000 barrels, according to Myers. She noted that barrels are kept for about six years and in that time may get three or four uses and are cleaned between each use. The barrels are treated with ozone outside the winery, where there is plenty of fresh air so there are no issues with accidental ozone inhalation by workers.
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Choosing the Best Method for Sanitizing Barrels
The Argument for Steam Mark Grote, regional sales manager at ARS Enterprises, which manufac-
tures the SWASH steamer and pressure washer equipment, said, “By adjusting the time steam is on the wood—between three to eight minutes—you can control the amount of extraction on the barrel. I have gotten repeated unsolicited comments from wineries that if they steam a barrel from its first use, they actually get more life out of the barrel. They found that the oaking of the barrel is more consistent and predictable.” “The average Cabernet producer keeps their barrels for three years and then they’ll usually sell them off,” Grote added. “A lot of wineries are telling me they’re getting another year, year and a half, two years out of the barrels that they weren’t getting before because they found out that the oak wasn’t depleted. The oak was plugged up. The difference between French oak and American oak is that American oak has a very open cell structure with big pores. French oak has small pores so tartrates deposited in these barrels plug up those small holes very easily and you can quickly lose about 50 percent of the barrels ability to oak your wine in as little as one vintage. “If you’re steaming in a barrel, even just once a year, not only are you maintaining any microbiological level of cleanliness that you want in the barrel, but you’re also pulling all those little tartrate plugs out of the wood,” Grote explained. Santa Rosa, California-based Punchdown Cellars is a big proponent of steam, according to Robert Morris, president of the winemaking services and logistics provider. “We won’t use ozone inside the cellar anymore. The possible health effects on our workers are not worth using ozone, especially with a steam generator on-site,” said Morris. “Each barrel takes about 5 minutes
to clean with steam. If we notice a rear bacterial contamination we will steam for 10 minutes.” “Steam has saved us thousands of gallons of water,” said Durs Koenig, operations manager at Sonoma Wine Company. “Although steam is pushed out at slightly above 212° F, the accompanying pressurization causes the temperature to go up a bit. It is hard for any organism to survive that. The trick is the right amount of contact time. Accordingly, we have found steam is more effective than using chemicals to clean.” Aaquatools, Inc. offers both ozone and steam cleaning solutions for barrel sanitation. However, president Steve Buchan said steam has definitely been more popular. At last year’s Wines & Vines Oak Conference in Napa, Buchan said there were a number of highly respected industry people who got up to talk about how they care for their barrels. “Most everybody liked steam,” he said. “Ozone is something that is extremely questionable. We sell ozone. Do I think it’s popular right now? Not nearly as it was.” Buchan said one reason may be that there are a lot of unknowns in ozone, but there have been some really favorable articles on steam. “I mean, we are just killing it with steam right now.” Buchan said many of his winery clients will first perform a high-pressure wash and then steam the barrel for the final kill. “When you go in with that much temperature that steam produces, that’s your sanitation process. Now that’s not to say that there aren’t some winemakers hanging in there with ozone rinses. We’re not fond of ozone. I have heard it summed up as the next attorney’s dream because there’s a lot of liability; there’s a lot of degassing in the air. Steam is a much more practical and verifiable way to sanitize the barrel,” Buchan said.
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44 December 2015 WBM
“In all of our barrel processes, there are no chemicals. There’s no gas (ozone) unless somebody wants to buy it. Steam is pretty miserly with water and averages about 8 gallons per hour and it is not just for barrel work but for cleaning all parts of a winery,” Buchan added.
Using Both Steam and Ozone Since 1983, Tom Beard has been devoted to creating barrel cleaning solutions for the wine industry. As founder and chief engineer of The Tom Beard Company, now part of P&L Specialties, he has been selling a self-contained portable unit (TCB2-US) that cleans and sanitizes barrels with plant-supplied hot and cold water and dissolved ozone water supplied from a separate ozone generator. The wash water is boosted to the necessary cleaning pressure with an integral pump, and fluids are controlled via pneumatically actuated valves and controlled by a touch screen panel. But as Tom Beard, adapting to winery demands, pointed out, “Steam is gaining in popularity. Ozone was the big deal for a while. They have used steam for a long time in Europe. The European winemakers think that the advantage to steam is that you can steam the barrel and bung it; and as the barrel cools down, the organic matter that’s trapped in the wood pockets is actually pulled out and killed because the steam is over 180° F degrees for some period of time. They actually feel that that treatment is good for the barrels, especially if you have Brettanomyces in your wine, or some other bacteria that you’re trying to get rid of. Initially, here in the last five years it’s been looked at as a sterilizing agent, or a sanitation agent.” The downsides to steam and ozone? Beard said steam can be very dangerous because you can get scalded with it, and steam generation requires a lot of energy. But ozone can also be detrimental to your health, Beard said. “It won’t scald you, but if you get a real lung-full of it you are going to the emergency room. Ultimately which system a winery uses is a balance between labor, water and time.” According to Tom Beard Company’s sales and service general manager, Jesus “Chuy” Mendoza, the company is working on a unit that allows both washing and steaming. “We have built some customized equipment for washing and steaming, but beyond these one-off designs, we are working on a wash and steam machine—the TBC2 Steamer—for general sale.” Expected delivery is the first quarter of 2016.
Which Method is the Right Choice? Adding some academic gravitas to the argument for either solution is professor emeritus of enology at Fresno State University, Kenneth Fugelsang, who thinks steam is a good choice because of its high temperature and ability to penetrate wood. While he thinks ozone is the right choice for the smooth surfaces of tanks, hoses and pumps, it is not that effective in barrels. That’s because ozone has a short half-life and it outgases out of its water solution quickly in the barrel. Steam saves water but makes up for that with its high demands for electricity. Steam also can possibly scald workers if not applied correctly. Ozone has also proven to be dangerous to workers who breathe it in. Robert Tracy, proprietor of BevTrac Mobile Quality Systems, a quality assurance/quality control service, performs periodic sanitation audits at wineries to test whether barrels are actually microbe-free after their washing routine. “I scrape the interior of barrels and collect wood shavings after their normal cleaning and sanitation processes. I take those shavings back to the lab, soak them in saline then plate onto petri plates to look for any wine spoilage microbes,” Tracy said.
WBM December 2015 45
Choosing the Best Method for Sanitizing Barrels
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From his quality assurance perspective, Tracy thinks it’s a good idea for winemakers to check their barrels quarterly or semi-annually. When asked about the relative results he has found from barrels treated with an ozone solution or steam, Tracy said, “Steam seems to be the best at knocking back the microbes in barrels.” But, Tracy adds, some winemakers who use ozone have a “stigma” about steam, that it extracts color and flavor out of the oak. “I’ve talked to winemakers who say steam actually improved the life of their barrels. But there’s also a group that say steam also negatively impacts their barrels. There’s kind of two camps about it. Whenever I recommend steam, I always say, ‘This is the best method we know that really will reduce microbial populations in the barrels.’ That’s all I would say. I wouldn’t say it improves the lives of barrels because I don’t have any data on that,” said Tracy. Navigating through all the pros and cons of ozone and steam, the final decision for winemakers must be based on a number of factors, such as the size of a winery, the sheer number of barrels, financial limitations and the winemaker’s previous experiential observations with barrel cleaning regimens.
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With water conservation now a major concern, alternative, water-free methods of barrel cleaning are a worthy consideration. Of course, winemakers are often traditionalists, so convincing them to try a new process for barrel cleaning takes some successful examples. Some forward-thinking winemakers are now reporting excellent results with dry ice barrel blasting. For $75 a barrel, Barrel Blasting owner Vic Vasquez applies his automated, patented, Rajeunir rejuvenation process, which blasts the barrels with recycled carbon dioxide dry ice crystals about the size of a grain of rice. “We basically remove a thin layer of wood. It doesn’t matter if you’re using hot water, cold water, ozonated water or steam. Whatever you may do to try to clean the surface of your barrel, you’re only going to be cleaning that surface of the barrel. Our process literally removes approximately a millimeter of the old, used-up portion of the toast without having to re-toast,” explained Napa-based Vasquez. “If the winery has a larger quantity of barrels justifying sending our equipment and the entire team, then we’ll do that. If it’s smaller quantities of barrels or depending on the distance that they are, we can pick up and bring the barrels back to our location and clean them there. It just depends on the situation of the winery and the quantity of barrels,” said Vasquez. “Most importantly, 30 percent of the wine barrels that we open have blisters. They’re holding wine, wine residue, cleaning chemicals, or a combination of all three. Virtually all of them are holding the first vintage, some of the second vintage, and possibly some of the third,” Vasquez explained. “We’ve got special tools that we’ve made that shave these blisters open to relieve that pocket, and let that wine drain out. Imagine you have a two- or threeyear-old barrel, and you’ve cleaned it. It’s got a blister in it that’s holding a glass of wine. You go in and you steam it. Steam is great for microbial, but it’s horrible for cleaning those inside blisters. We put it on our automated system. It goes through and blasts with the dry ice. We go through 15 to 20 pounds of dry ice per barrel,” he added. One convert to Barrel Blasting is Steve Reynolds, owner/winemaker of Napa-based Reynolds Family Winery. “Barrels do get used and the life leached out of them, oftentimes their faults masked by access. The process of barrel blasting opens up the barrel to view its faults, such as blistering
or impurities, so they can be scraped clean and addressed first hand—no Band-Aids. The blasting itself then opens the pores and sterilizes the surface to a whole new level, in some ways adding to the flavors. With the addition of stave inserts the barrel is, in my opinion, 90 percent as good—and sometimes 100 percent as good—as a new barrel in a blind tasting,” said Reynolds. Seconding Reynolds is Julie Johnson, owner/winemaker at St. Helenabased Tres Sabores Winery. “We realized that while some barrels had their first Barrel Blasting treatment, a handful were being rejuvenated for the third time. With the past two harvests being big ones we needed to reserve and reuse more barrels than we had originally planned to and looked to Vic and his team to provide their services,” said Johnson. “Whether you have to use particularly old barrels, or just love using neutral barrels, there is nothing like using barrels that have been revitalized by the Barrel Blasting methods.” BLUEMORPH ULTRAVIOLET (UV) SANITATION
The future of wine cellar sanitation just might be ultraviolet. At least that’s what Alex Farren, CEO of Oakland, California-based BlueMorph, has in mind. Ultraviolet Germicidal Irradiation uses short-wavelength UV light to kill or inactivate microorganisms. It uses light, not water, and application is conducted via mercury vapor lights. First developed for cleaning wine tanks, the portable UV device weighs about 35 pounds and uses a programmable touch-screen which lets cellarworkers set its timer and easily move from tank to tank. Sanitation times vary based on the size of the tank from three minutes for a 3,000 gallon tank and up. The larger the tank, the more mercury vapor lights are needed.
Now available is a UV unit created specially for barrel cleaning. The BlueMorph UV55 is a handheld ultraviolet light used for sanitizing kegs and drums. The UV55 is designed to replace chemical sanitization methods as well as steam and ozone. The unit fits over any 2- to 3-inch opening, sanitizes 55-gallon drums in six minutes and breaks downs kegs in only 3 minutes. “I think the advantage of UVC, beyond not using water, is the fact that it’s not an oxidizing agent. So it will have less of an effect on the life span of wood probably than any other sanitizer. Steam is probably the most effective on wood. But, then again, it can dissolve a lot of the flavor components over time. UVC avoids that,” said Farren. Jackson Family Wines’ senior sustainability manager Julien Gervreau said, “We’re always looking for new technology to help us make the highest quality wine with the lowest environmental footprint. Because water is such a sensitive issue in the regions where we do business, using a UV sanitizing system really made sense to us.” Gervreau estimates a 70 percent water-savings with BlueMorph’s UVC along with a 60 percent reduction in labor and a 50 percent savings in electrical costs. This new waterless technology is predicted to save 250,000 gallons of water a year at each Jackson Family production facility where it is in use. BlueMorph has partnered with the Tom Beard Company to engineer and design custom units to fit unique operational needs. Jackson Family Wines was the first winery to successfully test the first available tank system. (Editor’s note: For a more detailed look at BlueMorph’s UV design read Bill Pregler’s What’s Cool column in the October 2015 issue of Wine Business Monthly.) WBM
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WBM December 2015 47
winemaking
Square Fermentation Tanks Save Winery Space, Water and Energy Costs By switching from round to square tanks, Rodney Strong Vineyards was able to increase capacity by 28 percent and reduce water use by nearly 90 percent. John Intardonato
John Intardonato lives in the Napa Valley and has been a wine writer for the St. Helena Star, the Napa Register, Napa Valley Life and WineNews magazine. His articles have reappeared in national and international magazines and websites, and referenced in Wikipedia. He has traveled extensively to the wine regions of Europe, from the Crimea to Oporto.
RODNEY STRONG VINEYARDS
considered a negative. But in the wine business, if it can give you both a financial and quality edge, keep your winemaking under one roof without added construction costs and revitalize an old storage shed, perhaps going square can turn out to be pretty hip. Such seems the case for Sonoma’s historic Rodney Strong Vineyards in Sonoma County, California. By converting to square tanks, Rodney Strong created room to install an additional 17 fermentation tanks in a building that originally could only accommodate 40. This Russian River landmark has been innovative and cutting-edge since Strong left his Broadway dancing career to go west. He was one of the pioneers in creating the AVA system, helping develop both the Chalk Hill and Russian River AVA designations. He also introduced mail-order wine sales and personalized bottle labeling. The winery has never shied away from trying something new. “We needed tanks that would hold 6,000 gallons and handle 20 tons each,” said winemaker Justin Seidenfeld, who helped design the system. “With regular, round fermenters, we could only squeeze in 40 tanks. With the square design, not only were we able to install as many as 57 tanks, which will now accommodate our full harvest, it has left us some extra room for any surprises. The round tanks left us 20 percent short of our needs. With the square tanks we were able to increase our capacity by 28 percent in the same space.” B E I N G S Q UA R E I S O F T E N
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In a unique partnership with La Garde of Quebec, Canada, a 50-year-old manufacturer of high-quality, stainless steel products, Rodney Strong winery has now become the largest square tank winery in the world. “Our goal is to be sustainable and to maximize our efficiency,” said Seidenfeld. “These tanks were designed and built especially for our new winery, which we created from an old 11,000-square-foot warehouse. The building was already on our property and was just sitting here, taking up space. It was called ‘the bone-yard’ because it’s where we kept all our old stuff.” The new facility, however, is now a state-of-the-art, out-of-the-box winery intended to handle the company’s new ultra-premium Bordeaux blend. Its fruit source is from a newly planted 200-acre vineyard leased from the 19,000-acre Cooley Ranch. Located north of Lake Sonoma and west of Cloverdale, the vineyard sits between 800 and 2,000 feet elevation. Rodney Strong has a 70-year lease for 390 acres on the property, and the money paid will help to preserve and maintain the remaining land as a permanent ag preserve. Seidenfeld added, “We estimate that the vineyard will produce about 1,000 tons, and we want to process this exceptional fruit all under one roof. We discovered that if we used the standard round fermenters in the building, there was only capacity for 40 tanks; that’s only about 80 percent of the harvest.”
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RODNEY STRONG VINEYARDS
“Because the tanks are made of sheet metal rather than rolled steel, they’re three times thicker than round tanks. This allowed us to nano-polish the interior to a very smooth surface so wine residue doesn’t get into the pores. This makes it so easy to clean the tanks with just hot water. No caustic chemicals or excessive scrubbing is needed to remove the wine deposits.” Justin Seidenfeld, winemaker, Rodney Strong Vineyards
He said he started looking around for alternatives and got the idea for the square tanks when he visited the La Garde booth at the Unified Wine & Grape Symposium in Sacramento several years ago. The problem, at the time, was that the company only made small tanks—just 250 to 1,000 gallons. However, La Garde director and designer Jostran Lamontagne told Seidenfeld the company could custom-build tanks to the winery’s specifications. Lamontagne then sent his engineers to the winery. The tanks were built and installed in time for the 2014 Clooney Ranch harvest. While the La Garde units were double the cost of similar-capacity round tanks, Seidenfeld said that difference has already been paid back. “With their increased capacity they actually cost us less per capacity than if we had to expand the facility,” he said. “It’s an investment that paid itself off in one and a half years of winemaking.”
Savings on Water and Energy Costs The tanks have produced additional benefits in production and labor costs, time saved and wine quality, Seidenfeld added. “We are awed by the units. The craftsmanship is truly the best I’ve seen. The interior of the tank is smooth and seamless, almost as if it was made out of one solid piece. Because the tanks are made of sheet metal rather than rolled steel, they’re three times thicker than round tanks. This allowed us to nano-polish the interior to a very smooth surface so wine residue doesn’t get into the pores. This makes it so easy to clean the tanks with just hot water. No caustic chemicals or
50 December 2015 WBM
excessive scrubbing is needed to remove the wine deposits.” As a result, Seidenfeld claims they have reduced their water use by almost 90 percent and reduced their cooling and utility costs by 50 percent. The tanks, he added, have improved wine quality through enhanced extraction and more balanced fermentations. “Because the tanks have a wider area, the cap is spread out more, which gives a better skin contact with the juice. This also provides better cooling of the must. We have more consistent fermentation curves, and it reduces heat spikes. It gives a cleaner fermentation with no off characters that we don’t want in our wine,” he said. “The cooling package is actually reduced in size because the tanks are cooling each other. With square tanks there is more metal to metal and less air space to keep cool.” According to Seidenfeld, the tanks are completely enclosed and can be alternately used as storage, blending and aging containers. Each tank can also be used for smaller quantities. “It has six cooling jackets, with the upper and lower jackets on separate controls. They are very versatile containers. I have used these tanks to ferment as little as 4 tons and as much as 22.” Winery owner Tom Klein is equally enthusiastic. “We wanted to get a certain quality in this new wine and wanted a special fermenter to accomplish this in the space we had. If we didn’t have these specific goals in mind, we never would have tried these tanks,” said Klein. “Now, when you think about it, it doesn’t make sense to put round tanks in a square building. We saved a lot of wasted space. We’re finding that we’re using less water and less energy. The results are remarkable. Justin was very clever.”
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RODNEY STRONG VINEYARDS
According to Lamontagne, who now lives and is headquartered in St. Helena, the tanks were constructed in Quebec and brought to Sonoma by truck where they were installed and reinforced for earthquake resistance. Each container is welded and thoroughly bolted onto six-foot, specially designed metal collars to limit movement. They are designed to be earthquake-resistant to a level 6 on the Richter scale. “Our tanks are designed for winemaking by winemakers, enologists and engineers,” Lamontagne said. “We produce our tanks ‘sur mesure,’ meaning that they are tailor-made to optimize every single inch of the winery’s space. We can adapt the height, width and depth of the tank to reach the exact volume of wine you wish to produce and reduce your construction cost.” A very important feature, Lamontagne added, is that their tank’s contact surface can be increased by up to 50 percent over a round tank. “Our cubic design maximizes the contact ratio of must-to-juice to produce a thinner cap. This optimizes extraction to create more flavor, color and complexity in the wine.” Lamontagne also believes that a thinner cap facilitates more efficient pumpovers and reduces cooling costs. The cooling system itself is 50 percent more efficient, he said. “Our cooling jackets are 10 inches high with a half-inch 52 December 2015 WBM
Wine Trials: Round v. Square Tanks
wide interior flow area. It is the largest spacing of any tank made and allows the glycol to flow within the jacket with less head loss and a more rapid flow. This reduces pressure, makes the heat exchange more efficient and, combined with the thinner cap, requires less energy to cool the wine.” All tanks are made of 304 stainless steel Grade LA GARDE 11. The interior is a 2B polished finish, with the corners rounded. Lamontagne said the material reduces cleaning and water use by 75 percent or more. La Garde is a subsidiary of Sani Metals Limited (SML) and has more than 200 employees. According to Lamontagne, the company has been manufacturing high-quality, stainless steel equipment since 1965. Its other winery clients include Silver Oak, Alpha Omega and Far Niente.
Seidenfeld said he is a believer. He recently did a blind tasting of the 2014 vintage with eight staff members. “As an experiment, we fermented the fruit in round steel, 600-liter oak barrels and square tanks. All were processed in the same way, with 21-day skin contact.” The consensus: the square tanks produced a better wine. “We made a winery out of nothing,” he added. “The old shed has been revitalized from top to bottom. Even a special, sloping floor of resin and fiber was added to support the tanks, along with heavy insulation, extra stabilizers and an extensive catwalk.” He said he is getting two full runs: the earlier-ripening Pinot Noir and the Clooney Ranch varietals. Although excited about the great fruit and the exceptional new facilities, Seidenfeld is modest about his own participation. “Square tanks have been around a long time so we didn’t reinvent the wheel. When we began to think about the tanks, we were a little hesitant but not anymore,” he added. Is he happy with these tanks? Don’t get him started. WBM
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Flash Détente Evolves Now used as tool for higher-end and smaller-production wines Ted Rieger Ted Rieger, CSW, is a wine journalist based in Sacramento, Calif. and a writer for wine trade media since 1988.
F L A S H D É T E N T E , A T H E R M O V I N I F I C AT I O N
technology for enhancing positive sensory characteristics in winegrapes, is increasingly being used by California winemakers as a regular winemaking tool for every vintage, not just for poor quality grapes in problem vintages. Flash is now used to produce award-winning and 90+ rated wines that include Napa Valley Cabernet Sauvignons priced up to $100 per bottle. Winemakers have also discovered that flash can be used to produce wines with a unique palate profile and have patented the winemaking process that creates this palate sensation. Flash détente systems have been used since the 1990s. More than 120 systems are installed at wineries worldwide. With the exception of a small test unit trialed in California during the 2000 crush, flash détente equipment has only been available and used in California since 2009. For the 2015 crush, six units were operational in California, one in Texas and one in Ontario, Canada. Industry insiders believe units will be added in 2016 at E&J Gallo’s Livingston, California facility and at a Constellation Wines’ facility in Monterey County. Winemaker and technology consultant Rick Jones, who has studied and worked with thermovinification equipment internationally, spoke at a UC Davis meeting in July (“Crush Strategies to Maximize Quality”) that focused on flash détente use with winemaker discussions and wine tastings. “Heat is used in Europe a lot for wine production, and we’re still at the beginning of ways it can be used for winemaking in the U.S.,” Jones said. SCOTT SUMMERS
Della Toffola unit at Carneros Vintners 54 December 2015 WBM
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Flash Détente Evolves
What is Flash Détente? Flash détente is a two-step process in which destemmed grapes are heated in a thermal tank up to 185° F then transferred to a cooler vacuum chamber where the grape skins rupture and release anthocyanins, tannins and aroma compounds from the grape cell walls. The two main manufacturers of flash détente machines used in the U.S. are Della Toffola and Pera Pellenc. Jones said flash détente was created to address two downsides of more traditional thermovinification processes: how to extract tannins in a better way for better color stability and structure, and how to cool the must down quickly and efficiently. “It also has the added benefit of removing pyrazine into the flash water, which is what caught the interest of people in California,” Jones said. “Think about a flash chamber like you think about a press and tailor the processing parameters to the type and condition of the grapes for each load.” Two of the busier flash units in California are a Della Toffola unit at Lodi Vintners and one at Carneros Vintners in Sonoma County—custom crush facilities that are both owned and operated by the Rippey family. Many California winemakers were introduced to flash technology by necessity during cool, damp harvests in 2010 and 2011 when bunch rot was a major issue. Carneros Vintners’ winemaker Dave Dobson observed, “Enough high-end producers were forced to have two years’ experience with the machine to get them to start thinking not just about using it to salvage a crop, but also to think about how they can use this technology to make wines better every year.”
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56 December 2015 WBM
Flash Détente Evolves
Flash Détente Benefits and Uses Users of flash détente listed the following potential uses and benefits: • Intensified color, concentrated fruit, increased sugar concentration by 10 percent. • Heat denatures enzymes in grapes and reduces laccase from Botrytis. • Removes unwanted characteristics by evaporation of volatiles in flash water: mold, pyrazine, smoke, freeway exhaust, dairy/manure to cleanse “air-oir” of harvested grapes. • Faster ferments with less competition for yeasts from other microoganisms. • Allows fermentation of red wines like white wines without skins and seeds, to increase tank capacity or enable barrel fermentation of reds. • Reduces or eliminates cap management. • Extends the life of a vineyard—low sugar, under-ripe character and low color can be improved in fruit from vines affected by grapevine red blotch-associated virus and grapevine leafroll-associated viruses. • Potential to increase vineyard yields or reduce/eliminate crop thinning. • Potential to process and release wine sooner than with traditional processing. • Ability to fine-tune wine tannin profile, aroma, flavor and style characteristics. • Potential to produce wines capable of longer bottle aging. SCOTT SUMMERS
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58 December 2015 WBM
Dobson further explained: “People now know they can use it to reduce herbaceousness and pyrazine characters and to get good color extraction. Now the direction they are going is tannin management, with options to use only skin tannins, to separate and blend different amounts of seed and skin tannins, and look at other options of when to press, whether or not to barrel ferment and other tools and options.” Tyson Rippey, director of operations at Lodi Vintners, said the facility processes an average of 5,000 tons through its flash unit each vintage. Like the unit at Carneros Vintners, its minimum capacity is about 25 tons, or one truckload of grapes. Flash lot sizes can range up to about 500 tons. For 2015, Rippey said the Lodi unit flashed Barbera, Cabernet Franc, Cabernet Sauvignon, Cinsault, Malbec, Mourvedre, Petit Verdot, Tannat and Zinfandel. Scheid Vineyards installed a Pera Pellenc flash détente unit at its winery in Greenfield, Monterey County for the 2012 harvest. The unit can process 30 tons per hour, with a minimum of a 25-ton truckload. Tony Stephen, Scheid’s director of winegrape marketing and sales, said it provides benefits for both product quality enhancement and processing efficiency. “It improves color, it makes more tannins and anthocyanins available, it can cut fermentation times in half, and it improves our throughput on a daily basis,” he said. The flash unit is used for Scheid’s fruit and as a custom service for clients, and processes up to 10,000 tons per year. Stephen said Scheid always uses flashed juice as a blending component. The majority of winemakers use flashed lots as a blending component, but even some Napa Valley Cabernet Sauvignons have been produced with 100 percent flashed juice. While flash is primarily a tool for red grape varieties, some producers use it with white varieties such as Chardonnay and Sauvignon Blanc.
The Vertical Palate and Concrete Wine Consulting winemaker Barry Gnekow is probably the most experienced flash détente user in California and one of its biggest advocates. He was one of the earliest to use the Pera flash unit installed at Monterey Wine Company in King City in 2009 to produce wines for Hahn Family Wines and Smith & Hook. With clients throughout California, Gnekow also uses flash units at Lodi Vintners, Carneros Vintners and runs smaller lots at Flash Wine Technologies in Kenwood. Concrete Wine is a brand produced at Lodi Vintners as a joint project by Gnekow, Tyson Rippey and winemaker Joseph Smith. Gnekow and Smith, who have worked together on a number of wine brands since the 1990s, began noticing a sensory characteristic in their flash-produced wines they call the “vertical palate profile” or “vertical palate.” Gnekow explained: “We now have commercially produced wines in the marketplace that have a ‘vertical palate’—the wine flavors in the mouth go up and hit the top of the palate, rising to the roof of the mouth, in addition to moving horizontally across the tongue. We love this characteristic, and we pursue it in producing these wines.” Gnekow also described the sensation as “like a sparkling wine with no bubbles.” Gnekow obtained a U.S. patent for the “Vertical Palate Winemaking Process” in March 2015, described in the patent abstract as a “Multi-stage fermentation process for making red/white/rosé wines having a unique, unexpected and intense ‘vertical palate’ of aroma, flavors and exceptional finish.” The abstract also describes vertical palate (VP) wines as a blend of three to four feed stocks and notes that quantitative assays show the wines have two to three times more phenolic components as compared to traditional fermentation process wines.
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Flash Détente Evolves
The VP style is produced in the Concrete Lodi Old Vine Zinfandel with a blend of three processing components: one-third is 100 percent flashed juice that is barrel-fermented, one-third is traditional stainless steel tankfermented must with no flash treatment, and one-third is flashed juice and skins fermented together in a concrete tank. Lodi Vintners has 35 concrete tanks built at the facility in the 1940s that range in capacity from 16,000 to 32,000 gallons. After primary fermentation, the tank-fermented wines are aged in oak barrels up to 14 months. The winemakers taste the barrel-aged lots and make selections for blending right before bottling, with the three components blended together in the bottling tank. Gnekow said, “The Concrete Zinfandel is the most definitive and the benchmark of how the VP performs on the palate.” He said VP is described by the winemakers based on varying degrees of expression in each wine. The Concrete Zinfandel is called “full-on vertical,” the Concrete Napa Valley Cabernet Sauvignon, is said to be “pushing vertical,” and other wines are described as “slight vertical.” The Concrete wines are barrel-fermented in oak from several different coopers. Smith noted that Tonnellerie Radoux worked with the winemakers to produce a special barrel type that has a particular combination of wood with different grain tightness and toast levels. The flashed juice goes directly into the barrel through the bunghole and is capped with a silicone bung designed to release pressure from fermentation. Rippey noted the flash process removes all microbial competition with the yeast, and the juice in barrel completes fermentation quickly—in three to five days. Rippey said, “We’re using flash on great quality fruit and on some of the best lots we have.”
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Flash Détente Evolves
Wines are also produced under the Rippey Family Wines label with flash components of varying degrees in their final blends. A 2013 Rippey Napa Valley Sauvignon Blanc includes about 50 percent flashed juice to tone down pyrazine and grassy characters and express a wider range of aroma and flavor components. Smith is also winemaker for Klinker Brick Wines in Lodi and produces a Syrah from a vineyard that can be overcropped and have a “reduced” character. By using flash and barrel fermenting the flashed juice for part of the blend, it removes the reductive character from the wine. The Klinker Brick Old Ghost Zinfandel is produced with flash and displays VP character.
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Napa Valley Wines Utilize Flash Several Napa Valley wineries produce high-end wines with flash components, and some display VP character. Jamieson Ranch Vineyards has produced its Double Lariat Napa Valley Cabernet Sauvignon since the 2011 vintage that has grown in annual production from 3,000 cases in 2011 to 7,100 cases of the most recently released 2013 vintage, priced at $65 a bottle. The wine is a blend of three parts: 33 percent flashed juice barrel fermented in French oak, 33 percent flashed must fermented on the skins in stainless steel, and 33 percent traditional non-flashed grapes fermented in stainless steel. Jamieson Ranch winemaker Juan Jose Verdina, who worked at Hahn Estates in Monterey with Gnekow prior to becoming winemaker at Jamieson, said, “Flash is one of the greatest tools to provide the best components for the final blend.” Hypothesis wines, produced by Roots Run Deep Winery, is another wine Gnekow produced using flash. Hypothesis 2011 and 2012 vintages of Napa Valley Cabernet Sauvignon were made with 100 percent flashed fruit, with 50 percent barrel fermented, then aged 15 months in French oak. It’s priced at $40 a bottle. The 2013 vintage used 85 percent flashed fruit, was 45 percent barrel fermented, aged 18 months in French oak and is priced at $45 a barrel. Gnekow is also winemaker for Napa Valley brand Roberts + Rogers. This winery produced a 2012 Howell Mountain Cabernet Sauvignon with more than 70 percent flashed fruit, aged 24 months in French oak and priced at $100 a bottle. The winery also produced a 2013 Napa Valley Chardonnay with 70 percent flashed fruit, barrel fermented in French oak and priced at $50 a bottle. Other recent releases produced with flash and showing VP include: Roberts + Rogers Louer Family St. Helena Cabernet Sauvignon and Napa Valley Cabernet Sauvignon, Educated Guess Napa Valley Merlot and Smith & Hook Central Coast Cabernet Sauvignon. Gnekow summarized, “Flash extracts anthocyanins and other components that are usually lost with the pomace during traditional red fermentations. With this extraction, you can drink the wine sooner, but it’s aging more slowly. With the extraction you’re getting, it provides more substrate for aging and stability.”
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Regarding the VP phenomenon, Gnekow observed: “What’s interesting to me is that even among wine industry professionals, some get it right away and others just don’t. What’s really important is whether the consumers (and judges and critics) like it or not, and the sales and awards say they do.”
Flash Wine Technologies Serves Smaller Lot, Premium Wines Winemaker and consultant Rudy Zuidema operates a Della Toffola flash détente unit at Kunde Family Winery in Sonoma Valley as a service through his company, Flash Wine Technologies. “Our goal is to bring this tool to smaller wineries to use every vintage, not only for problematic ones,” Zuidema said. The unit can process lots as small as 10 tons. Zuidema has capacity for about 1,300 tons a year and has processed an average of 800 to 900 tons per year to date. Flash Wine Technologies began operation during the high-volume harvest of 2012 when winery capacity was an issue. As Zuidema explained: “Wineries needed quick tank turnaround and processing, and they turned to us to help
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WBM December 2015 63
Flash Détente Evolves
TED RIEGER
WineSecrets president Eric Dahlberg in front of his 1-ton capacity Della Toffola flash détente unit, available for mobile service
out and create tank space. They used flash by necessity at first, but now they come back every year to make better wines.” One high-end Sonoma County Pinot Noir producer ran out of space in 2012 and sent Zuidema fruit to process quickly. The winery liked the result and now flashes 40 tons each year to produce a richer style of Pinot, and as a blending component with traditionally processed lots. Kunde also uses flash when capacity issues occur, and to prepare red juice for barrel fermentation. Zuidema works with a winery that produces an Alexander Valley Reserve Cabernet Franc. The fruit comes from a hillside vineyard with two distinct blocks—an upper block with good exposure that ripens well with good characteristics and a lower block that receives shade from nearby trees, tends to ripen slower with lower Brix and was not always used in the final blend. After experimenting with flashing the lower block of 12 tons, the quality of both blocks was more balanced. Zuidema noted, “Now we pick everything the same day, flash the lower block to enhance and balance out its flavor, and now the entire vineyard is in the reserve blend rather than just 75 percent.” Zuidema summarized: “I’m sure more applications will arise as people become more familiar with flash and become more innovative. Flash is still new in the U.S., and my client base tends to be more adventurous in winemaking. My idea has been to have a small unit to tap into that market.”
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Kosher Wine Applications Zuidema has processed grapes with flash since 2013 for Covenant Wines, a kosher wine producer based in Berkeley owned by Jeff and Jodie Morgan and Leslie Rudd. Covenant started making mevushal kosher wines with flash in 2013 under the labels “Mensch” and “The Tribe.” More commonly, mevushal kosher wines go through a heat pasteurization process after the wine is made, but heating wine can make the alcohol more susceptible to oxidation and potentially impact wine character. Using flash to heat and pasteurize the juice and skins prior to fermentation still meets mevushal protocols but can produce a better quality wine. Zuidema says the process is overseen by a Rabbi who pushes the buttons on the flash unit. After flashing, the juice is pressed off the skins and fermented in barrels. With a mevushal wine, anyone, kosher or not, can open the bottle and serve it, enabling the wine to be served at restaurants and by caterers that may not have kosher wait staff. Covenant produces two “Mensch” blends, each sold at $20 a bottle: a California Red and a California White (a co-ferment of Roussanne and Semillon). In 2014, wines made under “The Tribe” label included a Proprietary Red from Dry Creek Valley for $38 a bottle, and a Lodi Chardonnay for $32 per bottle.
Flash Arrives in Texas Bending Branch Winery in Texas Hill Country installed a specially-built
Della Toffola flash unit in 2014 that processes 5 tons per hour. The unit is designed to be transported by truck for use at other wineries. Bending Branch winemakers Robert Young and John Rivenburgh farm 20 acres and specialize in robust premium red wines made from Tannat and Cabernet Sauvignon. In addition to enhancing color, flavor and tannin extraction for desired wine styles, the winemakers also see flash as a way to improve wine quality during unfavorable growing seasons. “The frequent weather challenges we have in Texas make this application perhaps more important than other winemaking regions that have more consistent growing conditions,” Young said.
Winesecrets Offers Mobile, Small Lot Service Winesecrets operated a small Della Toffola flash unit during the 2015 harvest
that is capable of processing grape loads of 8 tons or less with a minimum lot size of 1 ton, either as a mobile service or for use at the company facility in Sebastopol, California. “This machine is portable and small, making it practical for estate wine programs or for research scale wine lots,” Winesecrets president and founder Eric Dahlberg said. “It can be useful for a Napa winemaker, or one with high-end grapes, who is interested in the technology but doesn’t want to bet a full 10 tons of fruit.” Dahlberg planned to take the machine on the road to Oregon and other North American wine regions where harvest runs later. He said, “This little machine will help winemakers answer detail questions, and it will help winemakers all over North America deepen their understanding of this technology.” Rick Jones provides consulting services for Winesecrets and believes small flash machines, or mobile flash services, have great potential for helping small wine regions in the Midwest and Eastern U.S. improve wine quality. “One of the futures of this technology is in non-California winemaking regions with variable climates where wine growing is dependent on hybrids,” Jones said. “Where flash has been used on eastern-grown hybrid varieties, the ‘foxy’ flavors went away, and there was better color extraction.” For mobile service, the Winesecrets unit requires a footprint of about 8 feet by 20 feet and some basic utility functions such as 480 volt electric power, compressed air and adequate refrigeration capacity to run glycol and water through the unit. Clark Smith used the Winesecrets flash unit to fine-tune the flavor profile of a 2015 St. Laurent produced under his WineSmith label, sourced from a small planting in the Ricci Vineyard in Carneros. St. Laurent is more common in Austria, Germany and the Czech Republic where it is that country’s “Cabernet Sauvignon,” said Smith. Smith has produced St. Laurent since 2013 and says it has good color and is very dense but also soft with no harshness or astringency, so it needs some tannic structure and framing and an element of bright fruit for balance. From a 5-ton load of grapes, Smith had half (2.5 tons) flashed then co-fermented the flashed and non-flashed portions together in stainless steel. After the wine finished malolactic fermentation, Smith observed, “The flash worked great; it gave us the brightness we were looking for, good color and the correct balance and structural framing.” He plans to use flash for future vintages to repeat this experience. WBM
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winemaking
Insight & Opinion:
5 Things I Learned About Weathering the Weather as a Team When weather in Missouri made it difficult to grow grapes, Andrew Meggitt and the St. James Winery team banded together to remain successful. Andrew Meggitt Andrew Meggitt joined the Missouri-based St. James Winery team in 2002 and has been enjoying life in the wine business for more than 20 years. A three-year-long travel adventure around the world following university influenced not only his outlook on life but also his perception of winemaking styles and methodology. Meggitt creatively stretches the boundaries of traditional winemaking while integrating both old- and new-world techniques he learned while working in New Zealand and France.
SCOTT SUMMERS
M I D W E S T S U M M E R S A R E I N FA M O U S
for being hot, sticky, humid and—above all—unpredictable. I learned this very quickly when I first began making wine in Missouri after stints in New Zealand and France. This summer has been particularly difficult for Midwest winemakers because of its unseasonably cool temperatures, heavy rainfall and high humidity—the perfect recipe for diseases like downy mildew and black rot. Missouri’s June rainfall was nearly double that of recent years. Add that to slightly cooler temperatures (averaging a high of 84° F compared to an
average of 87° F) and above-average humidity, and you can see how the weather has presented some unique challenges for our winery. Fortunately, those challenges also provided us with a good opportunity to drive home a culture of commitment, open communication and being proactive. Here are five lessons this summer has taught me about weathering even the harshest growing conditions as a team.
1. An empowered team is an effective team.
2. Scared actions aren’t good actions.
It’s crucial that everyone is focused on the same set of goals. If each person on the team understands how the work he/she does fits into the bigger picture, everyone works more effectively. For instance, my team’s goal is to make the best wine we can, so our decisions and culture harken back to that goal. That means reinforcing that trimming or spraying the grapes is not a lesser job than monitoring the fermentation process. Our customers can’t enjoy the wine if nobody is handling the transportation process, and a single breakout of black mold could ruin a whole batch of wine. Nobody’s job is unimportant, and it’s vital for the whole team to know that. By empowering people and including them in the winery’s mission and goals, they gain the autonomy, skills and confidence to be the best employees they can be—leaving you more time to spend in the vineyard.
With the wrenches this summer’s weather threw into our production, our weekly vineyard staff meetings became even more important. During these meetings, we discussed areas for improvement, but we tried not to dwell on the negative. Positive energy is so important to winemaking—when a batch goes bad, we ask what we can learn from it. When we have an issue in the fields, we realize there will always be more seasons and more wine to make. That positive energy was essential for my team to feel confident about making decisions in my absence, especially as I began spending more time in the field dealing with this year’s fungus and the repercussions from it. My team needed to know that I would want to know what the rationale was for decisions made in my absence, but I wouldn’t be upset—even if a decision didn’t prove to be the right one—if there was clear and logical reasoning behind the choice.
66 December 2015 WBM
3. Keep your boots on the ground. Rainy or hot Missouri weather means it’s easy to spend your days inside in air-conditioned comfort. But laid-back summer afternoons don’t grow grapes, and they certainly don’t make great wine. I’m personally embedded in the vineyard every single day, and I make a point of ensuring the rest of my team is too. It’s our job to prevent an outbreak of disease, and the only way to do that is to watch the grapes closely. When we notice fungus, I work with my team quickly, efficiently and safely to get rid of the problem. This personal approach to monitoring is very important to me. Even with 17 acres, someone still needs to walk every field. While many other wineries automate tasks such as leaf removal, we still do these types of activities by hand because the additional pressure of the machines can damage our fruit.
4. Negative situations can breed positive energy. Hard times make you take an in-depth look at processes to determine what’s working, what’s not and how you can improve. When hard rains made the ground soft and encouraged fungus growth, for example, my team realized we needed to change our practices by thinning
our crop and scouting the vineyard every morning and night. We put GPSmarked guard plants in place that we track daily for changes. We also use a placebo vineyard as a baseline to determine what fungi and diseases could be breaking out.
5. You’re in this together. At St. James Winery, we usually make decisions as a committee made up of the farm manager, the viticulturist and myself. We take walks through the vineyard together to ensure we’re making the best and most informed management decisions we can under the difficult circumstances. The simplest way to keep a positive mindset is to acknowledge that there could be an issue, work together to deal with it head-on and move forward. Your team works with you because they care about your vineyard, and they should approach problems with a straightforward, no-nonsense mentality. This means not complaining or getting frustrated, but putting on the rain boots, grabbing the clippers and getting down to business in the fields. The best advice I can give to other winery leaders and their employees is that you’re in this together. No one person is responsible on his or her own at our vineyard—we share the heartache of tough seasons, but we also share in the sweet success of awards and wonderful wine. WBM
WBM December 2015 67
grape growing
2015: Well… That Was Weird! The recent growing season was unusual and hopefully will not be repeated often. Mark Greenspan
I can say about this growing season/vintage but that it was weird. And not altogether one we would be desirous of being repeated. I last wrote about a difficult vintage exactly five years ago when describing the 2011 vintage in the North Coast and how it was washed out by harvest rainfall. There were many growers that year saying it was among their worst season ever. Not sure, but I think this one might have topped 2011 (or should I say bottomed it?). I think the only good thing that happened (or didn’t happen) was a rainy, wet harvest. My experience is mostly from the North Coast in California. From my travels and colleagues in the Central Coast, I think there were a lot of similarities with some of the problems of the season. I don’t believe that translates to the inland regions, which I understand was fairly normal, aside from the “d-word.” THERE’S NOT MUCH ELSE
Drought As in 2011, I don’t really know where to start. There were just so many things that happened. But since I mentioned it already, let’s start with the “d-word,” which is “drought” in case you hadn’t already sleuthed that one out. But what can I say about the drought that you don’t already know? It’s dry, which means different things to different parts of the state. For the Central Valley, it means no snowmelt so highly restricted surface water deliveries and groundwater that is in overdraft mode. For the Central Coast, it also means tapping further into dwindling groundwater reserves. But for the North Coast, spoiled as we are, it nonetheless means above 20 inches of precipitation. It’s been below average for a few years running, but this year featured a huge rainfall event in December (the standard rainfall year runs from July of the previous year to June of the “current” one), followed by rain in February. January and March were unusually dry, and the remainder of the spring was also quite dry. For the North Coast, that meant that the soil profile was not completely full of moisture (i.e., field capacity) at budbreak, which is quite unusual for us. However, it was very close to full, and that would not have been an issue had it not been for a scarcity of spring rain, usually provided by the sky, that tops up the soil moisture profile as the vines go into bloom. That said, in most North Coast locations, there was plenty of soil moisture to avoid stress during bloom and set. This was not the case in much of the Central Coast, where many or most growers needed to irrigate to keep vines from stressing during fruit set. And not to pat myself on the back, but most of my clients were able to get through the season using less irrigation than usual or ever before. Okay, a little patting there. 68 December 2015 WBM
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.
The Winter That Was Not The relatively dry conditions during winter were upstaged by weather that was warm enough to have made the Yeti go to the barber for a buzz cut. For illustration, I looked at the month of February for the Windsor CIMIS weather station, right in the middle of Sonoma County. The average air temperature over the last 15 years has been 45.8° F. In 2015, it was a balmy 52.4° F—a full 6.6 degrees warmer than average. Looking at the soil temperature averages for that location, which have been, on average, 51.1° F, it was 55.4° F in 2015. The warm winter caused early budbreak throughout the North Coast. Where we typically see budbreak occurring from midMarch through early- to mid-April, we saw budbreak in mid-February through mid-March. With some exceptions (e.g., Anderson Valley), mild spring temperatures helped us avoid catastrophe from frost, but I do know of some vineyards that did not fare so well. The early budbreak pretty much set the tone for the rest of the season, all the way through harvest. I tended to see a lot of uneven bud push, probably due to many factors, including variable temperatures during March, drier than usual soils and possibly also due to incomplete dormancy caused by lack of chilling hours.
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2015: Well… That Was Weird!
By the way, I’ve been strongly encouraging growers to irrigate (if not dryfarmed) after harvest, as well as apply small amounts of fertilizer (mostly nitrogen) to their vines to allow them to recover. I believe that too many growers neglect their vineyards after harvest, only to become upset the following spring at the weak and uneven bud push. One irrigation after harvest is not enough unless the fall rainfall starts up shortly afterward.
Poor Nutrition Perhaps due to the early budbreak, which possibly caused shoot growth to grow past what the root system could supply, or perhaps due to drier soil conditions than normal, I saw some early potassium deficiencies cropping up, sometimes severely impacting early canopy development. Application of foliar potassium fertilizer seemed to snap them out of it, so it was a shortlived condition as long as it was recognized and corrected quickly. When rainfall is not plentiful and the soil becomes depleted in moisture, nutrient availability also suffers. Even if irrigated (through drip), the nutrient shortages can occur because we wet only a tiny fraction of the overall soil volume when we drip-irrigate. In most soil types we find in coastal regions, if we try to irrigate with large volumes using drip irrigation, water percolates deeply and unevenly and fails to wet a large fraction of the soil as we might hope. Therefore, with the poor spring rainfall we received, we also saw other nutrient deficiencies besides potassium, but most commonly, nitrogen was in short supply. Some vineyards needed some spring N to get them going, whether conventional, Biodynamic or organic. We had to be careful not to apply too much or apply it too close to bloom and set, but many vineyards needed something. I found that N was in short supply throughout the season, and we had to apply a little more than we usually do all the way up to harvest. And yet, many winemakers found low YAN numbers in their musts.
Crop? What Crop? I’m burying the lede here, because the biggest story this year for coastal growers was very poor yields. Very poor. While the local paper reports yields down 15 to 25 percent overall, I think it was much worse than that. Maybe because the two varieties I work with most are Pinot Noir and Cabernet Sauvignon, I would suggest that yields were down 30 to 50 percent. Even then, it was hit and miss everywhere, even within vineyards having different clones, some of which were near-normal and some that were barely harvestable (though I think every last grape was picked this year, including some second crop). This was among the longest bloom and set period in memory, with the process taking close to one month within some blocks. That is, if it set at all. I wrote an article analyzing the problems with fruit set this year in the September issue of WBM (with charts appearing in the October WBM issue). While I’ve heard the drought and big crops the last few years being blamed for the light crop in 2015, it was mostly the cold, overcast, slightly rainy weather during the entire month of May that caused fruit set to be abysmal this season.
Disease Grape growers always face diseases, and in some ways, 2015 was no different from any other year. It’s usually just the suite of diseases that helps to define the year. This year’s winner goes to Powdery Mildew. Yes, kind of like the Yankees, it is often found at the top of the list. Mild weather conditions with no heat events during spring created perfect conditions for mildew. Funny, I
70 December 2015 WBM
got called to do an interview by a Bay Area radio station to discuss what they called the “powdery mold” issue. I had the feeling they were fishing for some bad news item about moldy grapes for the 2015 harvest. I had to correct them about what the issue was and that we had ways, including organic, to treat the problem. Still, it was a tough year for mildew. Some good, early canopy management and well-scheduled spray intervals kept most vineyards under control. But, Chardonnay was a beast as it always is; and if anyone said they had no mildew on their Chardonnay, they were lying or didn’t go out to look. Pierce’s Disease has made a comeback, much to the chagrin of everyone. I saw quite a lot of PD in vineyards last year, but this year it was even worse, with early-spring symptoms of vines failing to push out normal shoots. We tested several such vines, and they were positive for the causal agent, Xylella fastidiosa bacteria. The odd thing about this outbreak was that it was not restricted to vineyard areas bordering riparian zones. Usually, some alternate host plant was in the vicinity, but the symptomatic vines were not necessarily clustered near the putative source. Rather, there were vines in the middle of blocks with PD. That means there may be another vector besides the sharpshooters that are known to vector the bacteria. There is a team of researchers working on this now. PD seems to come in waves; and while it has been way back in people’s minds, it is now coming back into their conscious thoughts. A difficult disease to manage, this could end up being a quite devastating revelation.
Low Yields, Weird Ripening We knew going into the ripening period that things were going to get weird. The uneven budbreak, followed by the uneven and greatly extended bloom and set, led to a very uneven and greatly extended period of veraison. And the very low crop load created a situation that the ratio of canopy leaf area was quite high relative to the amount of fruit. Combine that with the very early year with long, warm days and grapes had no problems accumulating sugar (except for those with Red Blotch). I knew this would create a problem from the get-go because we normally have little problem attaining Brix here in California, but this was going to make sugar accumulation more rapid. And, for most vineyards, it seemed that way. Remarkably, it seemed that skin and seeds matured ahead of schedule, but the pulp did not want to break down like we wanted it to. Coupled with high acids and low pH levels, fruit was left to hang even though Brix targets had been reached. A bad vintage, potentially, for those picking only on the Brix metric. Because most clusters this year were of the hens-and-chicks category, the little seedless berries began to shrivel up before the larger berries had matured. This is a normal situation with hens-and-chicks, but it seemed worse this year because of the accelerated sugar accumulation combined with the arrival of hot weather in August and September. But despite the disjointed maturation, most fruit was ready weeks before normal harvest dates. We were picking Pinot Noir quite heavily in mid-August, and most other varieties were cleared before the third week in September. That is, except for Cabernet Sauvignon and some cool-site Syrah, which hung on until early October. Harvest was pretty much over by then, though some wineries kept it going for a couple more weeks, perhaps because their pipelines were full. The low yields reduced the severity of that issue, however. Red Blotch afflicted some vineyards as I received some calls about Brix in Cabernet being stuck around 22°. Eventually, even those vineyards made sugar (I think), if only shriveling due to the late-season heat.
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2015: Well… That Was Weird!
It’s Not the Heat, it’s the (Lack of) Humidity
science
The unusual ripening was compounded by some pretty good heat waves. 66th ASev The season was rather heat, but much of the heat a p l a tnormal f o r m f o rwith p r orespect g r e s s tonational conference was received during ripening in 2015. Heat waves occurred in August and June 15–18, 2015 September, with the big heat event occurring September 8 through September Portland Marriott Downtown Waterfront Hotel 10. While we’ve had hotter events, this one featured extremely low, single-digit Portland, relative humidity levels. The drying power of those weather conditions was Oregon USA felt by growers who still had fruit hanging at thatS time—mostly on Bordeaux P e c i A l e v e n t S varieties as most of the Pinot and Chardonnay had been harvested by then. • Merit Award Presentation — E.B. “Pete”ifDowns, As we swelter here in October as I write this, weMr.wonder this is an effect Consulting Enologist and of climate change, of the building El Niño or justRetired something we have to deal Senior VP for External Affairs, Kendall-Jackson, California with. I’d say all the above; and while we love to complain about the weather, • Extension Distinction Award Presentation every year brings new challenges. I think that’s why we do this farming thing • 2nd International Symposium on instead of engaging in a more predictable line of work. Nitrogen in Grapes and Wine • Tour of Columbia and Wineries From what I hear, winemakers have nonetheless been Gorge happy with the Visit our website for updates • Research Reports quality of the fruitoncoming of this harvest. Let’s hope they say the same the 2015out program. • Oregon Regional Wine Reception www.asev.org WBM thing nine months from now. And let’s hope next season is less weird. • Industry Seminars & Supplier Displays 530-753-3142
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WBM December 2015 73
grape growing
Vineyard Trial:
A Comparative Study of Traditional vs. Plant Sensor-based Irrigation The study finds that plant sensor-based irrigation promotes more conservative vineyard water use and improves vineyard economics. Thibaut Scholasch
C A L I F O R N I A ’ S P O P U L A T I O N G R O W T H A N D greater awareness of environmental water requirements have increased the pressure on agriculture to use water more efficiently. By monitoring plant water use continuously, new irrigation techniques can be implemented to promote more efficient irrigation strategies. However, those irrigation methods are new and more expensive compared to the traditional methods, and the industry has been slow to embrace new techniques. In order to demonstrate the benefits in terms of energy and water savings, as well as vineyard performance, we (Fruition Sciences) designed an experiment across multiple vineyard sites. First, we wanted to validate that traditional irrigation techniques overuse water. Second, we wanted to show that a plant sensor-based approach to irrigation could be effectively implemented throughout the state of California. Third, we wanted to demonstrate that more conservative irrigation practices could be adopted compared to traditional, even in the context of drought, while evaluating the consequences of irrigation reduction on vineyard performances. To validate our hypothesis, six vineyard sites were selected and split to compare the effect of two irrigation strategies in three distinct areas of California: Sonoma, Napa and Paso Robles. Under traditional strategy, irrigations are based on empirical knowledge, visual observations and a climatic model. Under the experimental strategy, irrigations are triggered based on the continuous monitoring of plant water use combining sap flow sensors with climatic data. We analyzed the effect of the two irrigation strategies on water saving, energy saving, yield and fruit composition. Results show that water and energy input related to irrigation could be reduced by 40 to 100 percent in the experimental treatments. Yield was not affected, and fruit composition was positively affected in the experimental treatment. Furthermore, by designing a framework that incorporates plant sensing data from a few reference sites it is possible to extrapolate irrigation decisions over large areas and remotely. The approach can be deployed under contrasting soils and climates throughout California, and it leverages pre-existing vineyard information, such as historical weather data and other plant or fruit measurements. Our study concludes that plant sensor-based irrigation promotes more conservative vineyard water use and improves vineyard economics.
74 December 2015 WBM
Thibaut Scholasch holds a Ph.D. in viticulture from the French National Institute of Agronomy at Montpellier, France. His research focused on vine water status variations under dry climates and their consequences on berry ripening. Scholasch also serves as a scientific consultant for various high-end vineyards in Napa Valley. Prior to his Ph.D., Scholasch worked as a winemaker for various companies throughout the world (Chile, California, France and Australia). In 2001, he was hired by Robert Mondavi winery as a research viticulturist: his projects focused predominantly on mapping vineyard variability and analyzing vineyard practices and vine water deficit impact on fruit composition. Scholasch earned a master’s degree in viticulture and enology in 1997 and a master’s degree in winemaking in 1998 from SUPAGRO, one of the top agronomy schools in France.
Introduction In September 2013, reports from San Luis Obispo County claimed that a rapid decline in well levels coincided with a surge in large vineyard plantings. In this climatic context, the goal of this project was to push forward a plant sensor-based approach to optimize water use in viticulture. Prior to this project, various testimonials had reported that a plant sensor-based approach to irrigation has a positive impact on water savings in viticulture. Additionally, because vineyard water deficit benefits fruit composition, wine quality has been reported to improve. The objective of the study was to compare traditional methods of irrigation (control treatment) with a plant sensor-based method (Fruition treatment) over six vineyards in 2014 located in the Paso Robles, Napa and Healdsburg areas. Our main objective was to demonstrate that water savings can be done through better irrigation practices based on plant measurements. The main hypothesis is that a treatment that triggers irrigation according to plantbased measurements saves water and improves fruit composition. Using sap flow sensors, we wanted to quantify how much more conservative irrigation could be. To reach that objective we will: • Compare two irrigation treatments: plant sensored-based irrigation versus traditional irrigation and analyze the impact on water savings. • Show the impact of reducing water input on plant water use and fruit composition. If successful, this demonstration should incentivize winegrape growers to switch more quickly to plant sensor-based irrigation and save water without compromising their quality or revenue.
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A Comparative Study of Traditional vs. Plant Sensor-based Irrigation
Material and Method SITE LOCATION
shows the approximate site location of each vineyard site where the split treatment experiment took place on the California map. The six vineyard sites belonged to six different wineries located between Paso Robles (PR), Napa (NP) and Healdsburg (HB).
FIGURE 1
FIGURE 1
Map of California showing block location with code name
VINEYARD PROPERTIES
All sites had been planted between 1999 and 2008, with an average of 1,700 plants per acre. Different varietals (Cabernet Sauvignon, Syrah and Merlot) and rootstocks (110R, 101-14, St. George) have been monitored for this experiment. Extra information related to block properties and layout are available upon request. EXPERIMENTAL LAYOUT
We used weekly aerial pictures (NDVI) to identify areas of uniform vegetative expression within each vineyard and to select the split treatment location. Experimental areas were divided into two sections for treatment application, referred to as “Fruition” or sap flow-based (experimental treatment) and “Traditional” (traditional treatment). The goal of the experiment
FIGURE 2
76 December 2015 WBM
Experimental design: Uniform vineyard block is split for treatment comparison
is to compare the effect of each irrigation treatment on block performance (yield and fruit quality) across six distinct vineyards (F I G U R E 2 ).
ENVIRONMENTAL MONITORING Weather station: Climatic measurements include four parameters to
• Traditional treatment: This is the control treatment where irrigation is applied according to historical vineyard management practices.
compute ETref according to the Pennman-Monteith equation: temperature, relative humidity, global radiation and windspeed. Weather stations were used to compute site-specific climatic demand.
• Fruition treatment: This is the experimental treatment where irrigation is triggered according to plant-sensor data. The water deficit index is calculated daily. Irrigations are triggered each time vine water use falls below a threshold of plant water deficit. Blocks under treatment are divided into two areas where the two irrigation treatments are applied side to side. The boundary line splits the two treatments. The white circles in F I G U R E 2 point to the sap flow devices’ locations that are referred to as the “Smart Point.” It is important to note that experimental sites were selected in situations where row orientation was parallel to the slope and never perpendicular. Consequently, even if irrigation water could have overflown on surface after irrigation (a potential concern on a steep slope vineyard site), it should not have impacted treatment integrity. In practice, no surface water overflow was reported after irrigation, and water penetrated vertically under the dripper (maximum horizontal wetted diameter of the soil never exceeded 70 cm).
Water Input Irrigation gauges were installed at each Smart Point to monitor the amount of water applied through the irrigation line. For each treatment, a rain gauge recorded the amount of water from the dripper. To ensure reliability of irrigation gauge data, gauge calibration was tested. For that, we collected the volume of water emitted by the dripper into a graduated container and compared the volume collected with the volume of water reported by the gauge under the same dripper. Our results confirmed that manufacturer calibration was reliable.
WBM December 2015 77
A Comparative Study of Traditional vs. Plant Sensor-based Irrigation
FIGURE 3
Sap flow sensor and stem section: The sensor is wrapped around the stem to monitor vine sap flow.
PLANT WATER USE MONITORING Continuous Measurement: In each treatment, one row was selected. In
each selected row, two vines were equipped with one sensor each. Each sensor measured the vine sap flow rate every 15 minutes. The two selected vines were within 25 meters of each other within the same row. Sap flow sensors were wrapped around the stem section (F I G U R E 3 ). To ensure good control over the amount of heat applied on the stem, vines used for the measurement were insulated with aluminum foil (F I G U R E 4 ). The energy balance method was used to measure sap flow with a Sap IP system (supplied by Dynamax in Houston, Texas). Sap flow rates measured on each vine were averaged on an hourly basis within each row. Water Deficit Index Computation: Water Deficit Index (WDI) is the ratio
between actual and maximum vine transpiration, defined as: WDI (t) = T (t)/ Tmax(t). WDI represents the level of daily vine water use by reference to its maximal level. WDI = 100 percent maximal level of vine water use is observed; there is no vine water deficit. WDI = 0 percent, there is no vine water use; the vine is dead. T is daily measured transpiration from sap flow, and Tmax is daily maximal vine transpiration obtained under dry soil conditions when soil moisture is non-limiting, as in Allen et al. (20091).
FIGURE 4
Two vines equipped with sap flow sensors and insulated with aluminum foil
ancillary data to extrapolate information collected within the Smart Point area to the rest of the block under treatment. Thus, by combining aerial pictures with plant-based and fruit-based measurements, we monitored the uniformity of the plant development rate as well as the plant response during the season for the whole area under treatment.
Results IRRIGATION Number of Irrigation Events: Between June 1 and harvest, less than five
irrigations were triggered in the Fruition treatment versus six to 30 times with the traditional treatment. F I G U R E 5 reports the number of irrigations traditionally applied at each location. Volume: On average, 65 percent of water was saved in the Fruition treat-
ment. F I G U R E 6 reports the volume of irrigation (in mm) applied between June 1 and harvest. On a side note, vineyard managers and winemakers have confirmed that they reduced their traditional irrigation volumes because they were observing how vines were responding to reduced irrigation in the Fruition treatment.
Tmax (t)=KcB (t) ETref : ETref is the reference evapotranspiration and a coef-
ficient linearly related to the leaf area index (Picón-Toro et al., 2012). FRUIT DATA
During the maturation phase, we sampled berries at each Smart Point. We analyzed berry weight and juice coposition at key stages of the fruit production cycle. At each site we compared the fruit maturation profile with the vine water use profile. Berry skin composition was also analyzed (data not shown). LEAF AREA DYNAMICS AND SPATIAL EXTRAPOLATION
At each Smart Point, shoot length was measured over four vines on five shoots per vine and during the rapid phase of shoot elongation (from early May to the end of June). At the same time weekly aerial pictures were provided. After image processing, aerial pictures reflected the amount of chlorophyll (i.e., biomass) covering the ground based on the analysis of a vegetative index called NDVI. NDVI spatial distribution was used as
78 December 2015 WBM
FIGURE 5
Comparison between number of irrigations under each treatment for each site
Take Aways: By computing WDI daily, a threshold to trigger irrigation can
be used to apply a lower amount of water. This strategy leads to an average of 60 percent water savings compared to the traditional technique. Reducing water use in the vineyard does not necessarily translate into imposing more water deficit to the vine. Paradoxically, applying more water with more frequent irrigations contributes to increasing the severity of water deficit experienced by the plant, particularly during the second part of the season (post-veraison period). YIELD
FIGURE 6
Volume of total irrigations, comparison between treatments for each site
Take Aways: The observation that more conservative irrigation practices
can be adopted has an immediate effect over larger production areas. Traditional farming behavior can be “psychologically impacted” by observing a small experimental area. This is encouraging and suggests that the Fruition strategy could quickly become a new normal to implement more conservative irrigation over large areas. TREATMENT EFFECT ON PLANT WATER STATUS Water Deficit Index: The concept of the Water Deficit Index (WDI), the
positioning and number of sensors per area as well as the method for spatial extrapolation are explained in the previous Material and Method section. We computed an aggregated daily WDI for each treatment to compare treatment effect over the entire season (F I G U R E 7 ).
shows that yield levels are similar for the two treatments. On average, production levels are higher under the Fruition treatment even if less water is applied. In the most dramatic yield increase situation (site PR-1), yield levels are 20 percent higher in the Fruition treatment despite a water reduction of 75 percent. Yield decline under the Traditional treatment can be interpreted as a carry-over effect of more frequent irrigation. When more water is applied in the early season, maximal berry size is programmed to be larger due to an increase in berry cell numbers. However, this strategy imposes higher water needs to maintain berry turgidity after berry growth stops, and it increases berry susceptibility to dehydration. This is particularly noticeable when heat waves happen before harvest (which is the case for the end of August in site PR-1). TA B L E 1
TA B L E 1
Traditional
Fruition treatment
(tons/acre)
(tons/acre)
PR-1
2.58
3.13
PR-2
4.67
4.55
• In the Fruition treatment, before veraison, water deficit index declines more rapidly. A moderate vine water deficit during that period is induced. Early season water deficit is desired as it benefits fruit quality at harvest. Despite the lack of irrigation before veraison, WDI remains higher than 50 percent. After veraison, three irrigations were triggered to impose a higher vine water use. Following each irrigation we observed a rise in WDI.
NP-3
2.12
2.08
NP-4
2.86
2.91
SO-5
1.98
2.03
SO-6
2.80
2.95
• The effect of irrigations last longer in the Fruition treatment due to larger application volumes.
Average
2.83
2.94
• In the traditional treatment, vine water use can be severely limited after veraison compared to before veraison. Consequently, after veraison, the water deficit index drops to lower values (WDI < 50 percent) indicating higher water stress, whereas before veraison no water stress is detected (WDI > 50 percent).
Site
Yield Comparison
FRUIT COMPOSITION AND QUALITY
Similar maturation profiles (sugar accumulation and berry weight) were obtained for both treatments. From a winemaker standpoint, rate of sugar accumulation was not significantly different between the two treatments. T A B L E 2 reports variations in the total amount of sugar per berry and the sugar concentration before harvest. Maturity levels were considered appropriate for winemaking purposes, regardless of the treatment.
FIGURE 7
WDI seasonal profile (June 18 to Sept. 15)
WBM December 2015 79
A Comparative Study of Traditional vs. Plant Sensor-based Irrigation
TA B L E 2
Winemaker of Site NP-3:
Sugar Accumulation
(Average Over the Last Three Sampling Dates Before Harvest)
Site PR-1
PR-2
NP-3
NP-4
SO-5
Average
“In-house phenolic analyses were run during fermentation and at pressing time. We found that the Fruition treatment was higher in color compared to traditional treatment (an 8 percent increase). For us, color is the most important aspect of phenolic analysis as the color is where flavor and concentration come from in winemaking. When tasting the blocks individually, we gave an edge to the Fruition blocks.”
Treatment
Sugar amount (mg/berry)
Sugar concentration (Brix)
Traditional
261.4
25.1
Fruition
261.2
25.9
Traditional
171.4
24.7
Fruition
177.1
24.6
“I feel like the tannins came around faster in the Fruition treatment and perceived less greenness.” [Note: This testimonial was featured on an NPR interview from December 15, titled “Market Place.”]
Traditional
270.6
25.9
Winemaker of Site SO-5:
Fruition
273.3
26.9
“I observed an earlier maturation in the Fruition treatment. Fruit quality is surprisingly good in the Fruition treatment despite having applied less water.”
Traditional
200.5
24.9
Fruition
187.8
25.3
Traditional
188.6
22.9
Fruition
184.2
22.8
Traditional
216.7
25.1
Fruition
218.5
24.7
Owner of Site NP-4:
Winemaker of Site SO-6:
More complex chemical analyses performed on skin composition (i.e., polyphenols extractibility) revealed that skin polyphenol concentration is systematically higher under the Fruition treatment. Higher color or polyphenols concentration is generally desirable from a winemaking standpoint. This overall improvement of fruit quality under the Fruition treatment was reflected through the following winemaker comments: Owner of Site PR-1:
“Despite applying less water we observed no decline in yield. Average Brix coming from combined sample of juice extracted while the fruit was harvested: 27° Brix in Traditional versus 26.5° Brix in Fruition. It means that contrary to what one would have expected, there is more dehydration in the traditional treatment (coherent with lower yield).” In conclusion: “There was no yield difference even though we would have thought that more dehydration should have occurred to the Fruition treatment. The physiological maturity level is better in the Fruition treatment, which suggests that vines suffered less. An asset for wine quality under the Fruition treatment.” Owner of Site PR-2:
“Sections within the experimental block where WDI was maintained lower pre-veraison show more polyphenols. In the Fruition block 11 we have observed a rise of 30 to 40 percent in phenolics. The return on investment increases because the Fruition wine was used in our $100 bottle while before it made it into our $56 bottle. The wine in the Fruition treatment is clearly superior. It is more beefy, darker, more intense.”
80 December 2015 WBM
“Wine quality has been assessed post-drain, and Fruition treatment was preferred for its broader and more concentrated mouthfeel.” WATER AND COST SAVINGS
shows that under the Fruition treatment reductions, in irrigation amount are systematic. Water savings are important, and sometimes dramatic. The lowest amount of water savings was reported in the coolest and wettest area (40 percent water savings, site HB-JP). The highest amount of water savings was reported in site NP-K, which was dry-farmed (100 percent of water savings). TA B L E 3
Comparison of Water Volumes Applied According to Treatment
TA B L E 3
(Irrigations are Cumulated from June 1 Until Harvest) Traditional (mm)
Fruition treatment (mm)
Water and cost savings
PR-A
88
25
71%
PR-D
51
28
45%
PR-H
57
27
53%
NP-K
27
0
100%
NP-M
91
50
53%
HB-JP
44
26
40%
Average
60
26
60%
Site
Conclusions
Thank You from Fruition Science
Under the Fruition treatment, the vineyard behaves normally despite the reduction in water volume.
We would like to thank the Innovative Conservation Program, funded by the Bureau of Reclamation, the Central Arizona Project, the Metropolitan Water District of Southern California and Southern Nevada Water Authority for the financial support in this study. Also, we would like to thank the Fruition team and interns for participating in the fieldwork and technical support. Last, we thank the wineries, which accepted to partner with this project, for their help, trust and financial contribution.
• Aerial pictures reflected no differences between treatments in terms of leaf area development. • Winemakers have confirmed that no leaf losses were observed under the Fruition treatment. • Plant physiological “behavior” is “normal.” This is reflected through the maintaining of similar leaf area sizes in both treatments and through leaf photosynthetic activity, allowing proper fruit maturation levels. • By training the vine in the early season to experience moderate water deficit, irrigation requirements are postponed until after veraison. Berry volume reduction, thus yield loss, is less sensitive to late season heat waves. This resulted in average yield being higher under the Fruition treatment while more severe fruit shriveling is observed under Traditional treatment.
References 1
(4) Allen, R. G. & Pereira, L. S. (2009). Estimating crop coefficients from fraction of ground cover and height. Irrigation Science, 28(1), 17–34.
2
Picón-Toro, J., González-Dugo, V., Uriarte, D., Mancha, L.A., & Testi, L. (2012). Effects of canopy size and water stress over the crop coefficient of a “Tempranillo” vineyard in south-western Spain. Irrigation Science, 30(5), 419–432.
Take Aways:
Dramatic reduction in irrigation, even during a drought, does not necessarily affect vineyard performance or vineyard production. We used an analytical framework to implement more conservative irrigation practices in vineyards and to monitor their impact on vineyard performance. Vineyard data was analyzed, discussed and confirmed with each winery participant separately. Overall, results show an average of 65 percent water savings compared to the Traditional irrigation strategy. Moreover, financial benefits in terms of production and vineyard performance have been associated with the implementation of more conservative irrigation strategies in each location: yield is maintained or slightly increased, fruit quality is better and, in some cases, an increase in wine bottle price is reported. The method was implemented under contrasted climates and over vineyards of various sizes. The method consisted of extrapolating plant-sensing data over larger areas from a few references sites located at strategic vineyard locations. Irrigation was triggered according to a threshold of vine water deficit, which was computed daily. Our study demonstrates that vineyard economic performance is positively affected by the adoption of a more conservative approach to irrigation, particularly early in the season. The experimental treatment for irrigation optimizes vineyard water use and improves vineyard financial performance. Our study shows that the approach is scalable and can be simultaneously implemented in contrasted situations. Prior to a large scale trial, the same treatment had been implemented successfully three consecutive years in the same block. Results observed in 2012, 2013 and 2014 are similar to the ones described. By providing real-time analytics to the decision process, the framework successfully enables the adoption of more conservative irrigation strategies and improves vineyard performances. WBM
WBM December 2015 81
sales & marketing
Music in the Tasting Room: Are You Breaking the Law? Performing Rights Organizations (PROs) are monitoring wineries—what you need to know before pressing “play.” Emily Rasmussen
Born and raised in small-town Iowa, Emily Rasmussen moved to Sonoma County in 2011 with an English degree and a bright-eyed fandom for the wine industry. She has lived and worked in Sonoma wine country ever since, with the exception of one harvest spent in Hawke’s Bay, New Zealand. Now with an Advanced Certification from the Wine & Spirits Education Trust, Rasmussen works as a full-time communications manager in Carneros and lives outside of Glen Ellen with her husband Cody and their golden retriever.
universal that it occasionally fades into the background: the soundtrack to a wine tasting experience. For some wineries, ambient music is as simple as streaming a radio station; for others, a specifically-crafted playlist features just the right combination of highs and lows, energetic beats and soothing tones to set the scene for a winery visit. But there’s more to playing music in a winery than wiring a sound system and pressing the “play” button. According to Chris Passarelli, senior intellectual property counsel at Napa’s Dickenson, Peatman & Fogarty law firm, a number of Sonoma and Napa wineries have recently received legal notices from copyright owner groups regarding songs subject to copyright protection being played. “It’s actually an ongoing saga,” Passarelli said, “and not exclusive to the wine industry.” These legal notices come from a performing rights organization (PRO), such as ASCAP, SESAC and BMI, which exist in order to liaise between a collection of musical artists and the commercial establishment seeking to play that artist’s music. “Musical compositions, like other intellectual property, belong to their creators,” performing rights organization SESAC explains on their website. “If you are using someone’s property (song) there is a moral and legal obligation to obtain the owner’s permission,” said Bill Lee, senior vice president, licensing operations for SESAC. “When a person writes a song, they copyright that song, and they own that song—it’s their property. It’s only fair that if someone wants to use that property, they should be compensated for it.” To confirm the legality of music being played, a performing rights organization sends representatives to visit an establishment and note any songs from their repertory. If a song from the PRO’s portfolio is played without a license, the society will send to the winery details of their infringements and instructions on how to rectify the situation: either by desisting from playing the songs in violation or obtaining the appropriate license needed to play the music. That license is most often a form of “blanket licenses,” which vary in price ($359 to $1,314 per year) based on the size of the establishment, the potential IT’S AN AMENITY SO
82 December 2015 WBM
Performing Rights Organizations in the U.S. These organizations exist in order to liaise between a collection of musical artists and the commercial establishment seeking to play that artist’s music and include: • ASCAP (American Society for Composers, Authors and Publisher): est. 1914 • SESAC (formerly Society for European Stage Authors and Composers): est. 1930 • BMI (Broadcast Music, Inc.): est. 1939
audience and the manner in which the music is performed. A blanket license authorizes the performance of a collection of compositions in the PRO’s repertory; each sale generates revenue that is then divided into royalties paid to each artist or musical group in the catalog. As ASCAP described in a May 2015 press release, “ASCAP ensures its members can earn a living from their art by licensing the public performances of their songs, collecting those license fees and distributing royalties to its members.” Passarelli added that without the PRO, “Up-and-coming artists, in particular, would never be able to reach each individual winery or establishment.” The blanket license was created to be a practical means for venues to play music legally but what was once designed to be a convenient solution is now facing the challenge of the musical world’s changing landscape. “Our members need policies that are understandable and transparent,” said Caroline Shaw, executive vice president of Jackson Family Wines and WineAmerica chair, in a September 2015 press release, “so they can book local singers and songwriters, stream internet radio and remain an attractive place to enjoy a local wine.” It was this need that led WineAmerica—the national trade organization that represents American winery interests before the federal government—to join the MIC Coalition, a group advocating a rational, sustainable and transparent music access system.
Exceptions to Musical Copyright Law: the Homestyle Exemption A winery is not liable for royalties if: • Your tasting room has less than 3,750 gross square feet of space. This includes areas that are not accessible to the public, such as kitchen space, preparation and storage rooms, as well as back offices. Parking lots are excluded. • - and – plays radio or television, where copyrights are covered by the broadcasters. Does not apply to music intended for personal use, i.e., CDs or downloads. • - or – Your tasting room has 3,750 gross square feet of space or more • - and – uses no more than six loudspeakers, of which not more than four loudspeakers are located in any one room or adjoining outdoor space • - and – if television sets are used, there are no more than four televisions, of which not more than one is located in any one room and none has a diagonal screen size greater than 55 inches. (SOURCE: WINEAMERICA)
“This is an important issue for wineries, and we wanted to be a leader in effecting change,” Michael Kaiser, WineAmerica director of public affairs, explained. The first step, he said, is education. “There’s a lot of misinformation out there, and that’s one of the main goals of WineAmerica: to educate the industry about issues like this and others that may affect the industry at a federal or state level.” Chris Passarelli said that PROs have been targeting restaurants for quite some time, but the increase in winery targets “simply correlates to the popularity of wine industry tourism. Wineries are peculiarly situated economically and are likely to comply; with a winery, it’s easier for the rights society to satisfactorily resolve the problem with money flowing to them. It’s an effective monetization of their intellectual property.” Copyright law applies to live music as well, even when performed at a private event. Passarelli’s advice for wineries with regard to live performances is to ask the musicians whether they’ve secured the rights to play their song selections, or if they are performing original music. “Never assume,” he said. “Due to liability, you are under a responsibility as a venue. Make sure those performers have appropriate permissions, or you could be on the hook for their infringement.” For recorded music, a few options exist to assure full compliance with copyright law: playing royaltyfree music, for example, or using the radio or a third-party service, such as Sirius XM or Pandora for Business, whose services include securing the proper licensing for the songs in their playlists. In the event that a notice of copyright infringement arrives in the mail or for those seeking to confirm the legality of music being played, Chris Passarelli’s advice is to contact your lawyers. The risk of ignoring a cease and desist—or even unknowingly playing music that isn’t compliant with copyright law—is, at best, the significant effort and expense involved in obtaining the correct licenses from each performing rights organization. At worst, it risks a lawsuit, one wherein an establishment could be liable for hundreds of thousands of dollars. In addition to attorney fees, damages can start at $750, according to WineAmerica, and can go up to $35,000 per song or even $150,000 if the violation is considered willful. WBM
Knowing is half the bottle. Know more about your business so you can sell more wine.
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WBM December 2015 83
sales & marketing
Retail Sales Analysis:
Off-Premise Wine Sales Up 6.5 Percent sales increased 6.5 percent from the same period of the previous year in the four weeks ending Sept. 12, 2015, according to Nielsen-tracked data. In the 52 weeks ending Sept. 12, wine sales increased 4.5 percent. Domestic wine sales increased 6.8 percent while imported wine sales increased 5.7 percent in the four weeks ending Sept. 12. In case volume during that same period, domestic case volume grew 2.6 percent while imported case volume increased 1.2 percent. The New Zealand, French and Portuguese categories lead the growth for imported wines: New Zealand wines are up 21.9 percent in sales and 19.5 percent in volume; French wines are up 20 percent in sales and 13.9 percent in volume; and Portuguese wines are up 10.6 percent in sales and 9.3 percent in volume. Sales and case volume for wines from Australia, Argentina and Germany decreased in the four weeks ending Sept. 12. Sales for wines in the $15 to $19.99 price point segment had the most growth, increasing 18.6 percent in sales and 16.8 percent in volume. Nearly all price point categories had good growth in the four weeks ending Sept. 12: the $9 to $11.99 segment grew 9.4 percent in sales and 7.9 percent in volume; the $12 to $14.99 segment increased 14.4 percent in sales and 13.5 percent in volume; and the more than $20 segment grew 13.3 percent in sales and 15.2 percent in volume. Sales and volume for the less than $2.99 segment dropped in the four weeks ending Sept. 12. O F F - P R E M I S E T O TA L TA B L E W I N E
$millions
By Varietal RosĂŠ table wine above $7.99, as a category, saw a 76 percent increase in sales and a 71.1 percent in volume in the four weeks ending Sept. 12. The category holds just a 1.1 percent market share in sales and 0.5 percent market share in volume. Blended table wine, as a category, is up 9.3 percent in sales and 4.7 percent in volume in the four weeks ending Sept. 12 and holds a 12.8 percent market share in sales and a 13.4 percent market share in volume. Of all the blended table wine, blush leads the growth. In sales, blush blended table wine sales are up 68.3 percent, and volume is up 55.7 percent. Red blended table wine is up 10.7 percent in sales and 6.6 percent in volume, and white blended table wine, meanwhile, is down 1.6 percent in sales and down 2.4 percent in volume. Pinot Noir, Pinot Grigio/Gris and Sauvignon Blanc also showed good growth in the four weeks ending Sept. 12. Pinot Noir grew 9.3 percent in sales and 5 percent in volume; Pinot Grigio/Gris grew 9.4 percent in sales and 8.2 percent in volume; and Sauvignon Blanc grew 17.2 percent in sales and 13.1 percent in volume. Cabernet Sauvignon grew 8.3 percent in sales and 4.5 percent in volume. Cabernet Sauvignon was the second largest selling varietal on the market in the four weeks ending Sept. 12, representing 15.4 percent of all wine sales and 13 percent of case volume.
Total Table Wine (last 13 4 week periods)
1,200
2014
1,000
2015
800
Year Ago 600 09/13/14
10/11/14
Source: Nielsen. 4 Weeks Ending 09/12/15
84 December 2015 WBM
11/08/14
12/06/14
01/03/15
01/31/15
02/28/15
03/28/15
4 W EEK S EN D I N G
04/25/15
05/23/15
06/20/15
07/18/15
08/15/15
09/12/15
WineDoc速-Winery Consulting Winery Design:
Chardonnay, the top-selling varietal on the market, holds a 20.1 percent market share in sales and a 20.3 percent share in volume in the four weeks ending Sept. 12. During that period, Chardonnay grew 6.1 percent in sales and 1.7 percent in volume. Sales and volume for Syrah/Shiraz, White Zinfandel and Merlot have all decreased in the four weeks ending Sept. 12. WBM
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Nielsen Table Wine Category Segments U.S. Expanded All Outlets Combined Plus Liquor/Convenience/AAFES Dollar Volume
weeks ending: September 12, 2015
4 WEEKS ENDING 9/12/15
52 WEEK ENDING 9/12/15
PERCENT CHANGE vs. YEAR AGO 4 WEEKS 52 WEEK ENDING ENDING 9/12/15 9/12/15
TOTAL TABLE WINE
$979,016,935
$13,044,995,015
6.5
TABLE WINE 187 ML
$21,302,112
$269,810,130
6.7
5.0
TABLE WINE 375 ML
$1,156,967
$14,388,247
38.2
11.1
TABLE WINE 750 ML
$686,183,735
$9,190,853,667
7.9
5.5
$2,518,000
$33,549,932
(9.0)
26.7 (0.5)
TABLE WINE 1 L TABLE WINE 1.5 L
4.5
$170,198,380
$2,296,696,245
1.4
TABLE WINE 3 L
$41,007,168
$512,426,388
12.0
9.8
Premium 3 L Box >$10
$32,787,453
$387,880,592
20.7
18.2
TABLE WINE 4 L
$7,805,364
$107,796,298
(4.9)
(1.2)
TABLE WINE 5 L
$39,223,553
$512,744,876
0.1
0.8
$459,103
$1,987,036
974.0
459.9
TABLE WINE REM SZ TABLE RED WINE
$468,253,037
$6,672,674,019
5.7
5.1
TABLE WHITE WINE
$449,571,992
$5,605,885,973
7.2
4.2
$60,952,636
$755,314,752
8.2
1.4
DM TABLE WINE
$714,868,289
$9,509,012,991
6.8
5.3
IMP TABLE WINE
2.5
TABLE BLUSH
$264,148,644
$3,535,982,014
5.7
ITALIAN TBL
$83,613,158
$1,140,144,376
8.6
6.0
AUSTRALIAN TBL
$52,793,803
$735,582,938
(2.9)
(5.5)
ARGENTINE TBL
$29,335,776
$424,291,412
(2.0)
0.5
NEW ZEALAND TBL
$29,793,423
$328,646,959
21.9
16.9
FRENCH TBL
$24,249,374
$288,329,778
20.0
7.0
CHILEAN TBL
$19,556,619
$278,926,083
0.9
(1.3)
SPANISH TBL
$11,357,521
$158,548,957
0.5
(0.8)
GERMAN TBL
$6,720,299
$99,118,836
(3.1)
(5.9)
A/O IMP COUNTRY TBL
$2,207,382
$28,818,069
35.0
12.8
SOUTH AFRICAN TBL
$2,133,060
$27,501,338
(13.7)
3.0
PORTUGUESE TBL
$2,388,238
$26,073,329
10.6
7.5
VARIETALS
$838,452,663
$11,143,502,479
6.2
4.4
GENERIC
$140,564,272
$1,901,492,514
8.5
5.1
CHARDONNAY
$197,155,922
$2,466,795,727
6.1
3.0
CAB SAUVIGNON
$151,000,745
$2,126,904,296
8.3
7.6
BLENDED TABLE WINE
$125,354,954
$1,716,749,605
9.3
9.0
$100,828,072
$1,416,512,307
10.7
10.8
$8,879,675
$120,516,532
12.7
7.1
$21,290,750
$274,654,129
(1.6)
(1.5)
BLENDED TABLE WINE RED SWEET RED BLENDS BLENDED TABLE WINE WHT
$3,236,134
$25,603,138
68.3
40.9
PINOT GRIGIO/GRIS
BLENDED TABLE WINE BLUSH
$95,236,184
$1,157,103,997
9.4
6.7
PINOT NOIR
$64,669,953
$906,030,991
9.3
8.8
MERLOT
$60,109,576
$867,972,334
(1.8)
(3.0)
SAUVIGNON BLANC
$63,985,365
$720,164,295
17.2
11.8
MOSCATO/MUSCAT TBL
$49,747,240
$690,553,907
7.0
5.7
WHT ZINFANDEL
$25,480,271
$352,352,251
(4.4)
(6.2)
MALBEC
$19,900,421
$289,488,097
1.0
3.6
RIESLING
$19,605,791
$268,514,462
2.7
(0.2)
ZINFANDEL
$16,907,001
$242,180,935
1.8
0.5
SYRAH/SHIRAZ
$10,442,951
$156,370,411
(9.3)
(10.9)
ROSE TABLE 750ML BE >$7.99
$10,721,059
$78,287,482
76.0
43.2
GLOBAL TBL BE $0-$2.99
$61,651,912
$831,034,163
(2.6)
(1.1)
GLOBAL TBL BE $3-$5.99
$302,501,761
$4,019,477,006
1.9
(0.1)
GLOBAL TBL BE $6-$8.99
$123,937,849
$1,685,742,079
1.0
(2.0)
GLOBAL TBL BE $9-$11.99
$225,369,674
$2,988,388,284
9.4
8.0
GLOBAL TBL BE $12-$14.99
$131,629,782
$1,722,580,953
14.4
12.4
GLOBAL TBL BE $15-$19.99
$73,253,638
$959,302,462
18.6
15.3
GLOBAL TBL BE >$20
$60,133,118
$831,661,352
13.3
8.1
Source: Nielsen
WBM December 2015 85
technology & business
Industry Roundtable:
Demand for Vineyard Properties Increases In our annual report on the lending environment for vineyards, leading bankers report continued strong demand for vineyard investments, combined with low interest rates and increased banker competition to secure new loans. Michael S. Lasky
Editor’s Note: This is the second part of a two-part report on the lending environment for the wine industry. This article focuses on lending to vineyards. Part One, which focused on lending to wineries, was published in the September 2015 issue of Wine Business Monthly. year, Wine Business Monthly surveyed leading bankers to the wine business to assess how wineries and vineyards are performing, the prospects for the wine business in the next year and how much money is available for new loans. In this cycle we also inquired about how the prevailing drought conditions factored into their loan-making decisions. The bankers interviewed for the report on vineyard lending include: • David Barnes, director, senior relationship manager, Union Bank • Bill Beyer, principal, Prudential Agricultural Investments (Prudential Mortgage Capital) • Ruth Edwards, commercial banking regional manager, Bank of Marin • Jason Hinde, vice president, Exchange Bank • Adam Keatts, vice president, Banner Bank • Tom McGuire, vice president, Farm Credit West • Rob McMillan, executive vice president and founder, Silicon Valley Bank,Wine Division • Bill Rodda, vice president, American Ag Credit
AS WE DO EACH
How does lending to vineyards differ from lending to wineries? Barnes : There is obviously the ag component to any sort of vineyard property,
meaning that you’re subject to natural risk, whether that be drought, water or climate. It could be which varietals are trending, but it has that basic ag risk component to it that has to be factored in. If a winery is purchasing a vineyard, you have the whole winery company that’s there to help balance out the risk of the specific property.
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Michael S. Lasky is the former editor of AppellationAmerica.com and is the author of hundreds of articles for national magazines and newspapers.
On the other hand, if you’re buying a specific property as a grower, then a banker is going to think about it a little bit differently. We have to consider all the variables that would go into making an optimal crop or ruining a crop. That could be frost control, water availability, land quality and all those kinds of things. You’re going to have to definitely feel like you’ve got a wellbalanced loan. You need sufficient equity in the property to balance out that risk. If you own a winery that’s taking a part of its whole enterprise, then you’ve got some balancing factors there that can offset some of the natural ag risk that you’re looking at. Beyer: With a loan to a winery we are dealing with a branded business for
the most part compared to a vineyard. The Napa vineyards are different than Monterey or Lodi, but a loan to a winery is more of a business loan than a vineyard loan because you’ve got to look at so many other factors as far as ability to sell the product and the quality of the product. You have that with the vineyards too, but vineyards are more of a generic type of lending process really. From the lender’s viewpoint, if you ever got those assets back in foreclosure, a vineyard is easier to find someone to manage it. That’s not the same with a winery because that’s more of a specialized asset. The evaluation and underwriting are a little bit more intense with a winery than a vineyard. Edwards : We typically lend to wineries that are acquiring vineyards versus
just straight vineyard owners. That’s definitely an area where there’s opportunities for lenders, but we typically will lend for vertical integration—that is for a vineyard purchase when the winery is trying to acquire the grapes. You’re not going to find vineyards being acquired by just people who want to grow grapes for a living. If you’re going to plant any vineyard, you’re looking at a lower loan to value because of the risks. You need a little more skin in the game for actually developing a new vineyard. You’re not going to see as many high limited
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Demand for Vineyard Properties Increases
“There is more risk in a vineyard development, and really, most of the risk lies in the extended payment period where you have no cash flow whatsoever.” Adam Keatts, Banner Bank
a processor, you’re dealing with more risks that are associated with sales demand. Then when you’re looking specifically at vineyards, what a banker has to consider is an understanding of its productive capacity and the remaining useful life of a vineyard. What is the historical tons per acre that are produced? Price points? Is it planted in an appropriate spot? You’re really looking at the useful life of an asset and figuring out whether or not the loan could be repaid in that asset’s useful life. Or if it can’t be, figuring out what other sources of repayment you have to find to make that work.
Who is buying vineyard property right now? Barnes : It’s who I would call strategic buyers, meaning wineries that are
property value transactions for vineyard development, but for loans for existing producing vineyards, definitely. They have long term contracts for wineries or using them for their own production. Hinde : With winery loans, one risk is their being able to sell the wine.
Distribution has been and always will be an impediment and a challenge for most wineries. When recessions hit, people stop buying wine in restaurants. Sitting on that much inventory requires a lot of capital. Whereas for vineyards, probably the biggest risk is weather, which you have no control over. Some would say that, yes, that’s riskier, but I think any seasoned lender that lends both in good times and in bad times realizes that you’re going to have bad years where the fog never burns off, it rains during bloom and so on. As long as the vineyard is being farmed correctly and that particular varietal is still in demand from the consumer, the loan is there. But loans for vineyards and for wineries are all connected. I would say weather and then at close second is consumer demand. That demand trickles back through the wineries, back to the lender and the grower. Keatts : In my opinion, there is more risk in a vineyard development, and
really, most of the risk lies in the extended payment period and the extended period where you have no cash flow whatsoever. I guess in a nutshell, the development of a new vineyard is one of the more significant in lending in that category because you’re relying on some other source of cash-flow to service that debt for several years until it starts producing. McGuire : Really, the vineyard is more, at least for our area, a commodity.
vertically integrating backwards into the vineyards and/or adding to their vineyard portfolio. Accordingly, we are really seeing wineries continue to be strong buyers of vineyard properties primarily because they then can take the fruit input off those properties and convert it into wine or product where they can get margin out of it. It’s more difficult for the pure vineyard operator. Beyer: From what I can see it looks like more wineries are buying vineyards,
but there is also a cache of institutional buyers as well as international buyers investing in vineyards. Edwards : We lend primarily in Napa and Sonoma counties. We are seeing wineries in those counties seeking out already planted acreage and looking to even Lake and Mendocino counties to buy areas for new vineyards or acreage they can plant out. Hinde : I think a lot of wineries are looking to have better control over their
grape supplies. Wineries predominantly have been probably the biggest buyer, at least from what I’ve seen. A close second to that are investors. Keatts : In the Walla Walla Valley, I’d say it’s substantially different than the
Columbia Valley or other parts of Washington. In Walla Walla, it’s mostly investors and wineries. McMillan : There are strategic buyers (wineries) that are looking for additional acreage to support their different brands that they have out in the market. And there are institutional investors who recently purchased a fairly large block of land in the Central Coast. That’s more of an investment for their portfolio.
General, larger factors and basic supply and demand affect the pricing and ultimate profitability of vineyard operations. With wineries, it’s very specific to wineries themselves. You can have two wineries side by side, and one be successful and one not, based on their marketing and business plan. There are so many different varieties, or different variations of business plans, that success or failure depends on that particular one and how well they can execute it. I’d say, in general, wineries are a higher risk than vineyards because of the complexities and the specific demands of that business plan.
Rodda : We’re also seeing more investor type groups come into the market,
McMillan : You can think of a winery, if you want to, in gross terms, as a
Barnes : I think vineyard prices have held up reasonably well, particularly in
food processor. Let’s say as a food processor, you’re making frozen diced bell peppers. Well, the risks of that are far different than they would be if you were a grower of bell peppers. When you’re a grower of bell peppers, you’re dealing with weather, pests, sometimes commodity risk. When you’re
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and that would be a consortium of people that pool money together and are buying vineyards without some sort of a structured basis. We’re also seeing people who have large vineyard operations, like Silverado Premium Properties and other large corporate grower types.
Has vineyard pricing risen in the past year? Napa and Sonoma, because the platform available for vineyard development is sort of static at this point. There’s a number of factors that go into prices of these vineyard lands that are not just related to grape prices, and a lot of that, again I think, is just the availability of supply of vineyard properties. Prices have held steady and generally are rising up compared to the last cycle.
Demand for Vineyard Properties Increases
“There’s good availability in capital for vineyard projects and vineyard purchases. The capital markets and the banking markets still have a lot of liquidity in them, so that capital needs to be put to work.” David Barnes, Union Bank
Keatts : I would say we had a lack of transactions during the recession, so therefore the distressed vineyard sales were what made the market. I think it may have appeared that there was a dip in prices for a while and it’s come back up now, but really, now that there are legitimate market sales again, I think they would have just picked back up where they left off. I wouldn’t say they’ve risen tremendously, just maybe slightly. McGuire : Vineyard prices have continued to rise. There haven’t been a lot
of transfers but some. I think what we’ve seen so far is that the existing vineyards have continued to strengthen. McMillan : Depends where you look in terms of the degree to which they’re
rising, but generally speaking in wine segments than can produce a $10 bottle and above, vineyard prices are rising. Below that, I couldn’t say that they are rising.
Is there as much money available for loans for vineyards now compared to a year ago?
What proof do you need from clients about available water supply before you will make a loan? Barnes : I think in any situation, water is obviously an important factor. It
depends also how the vineyard has been farmed from a historical practice standpoint. There are still some vineyards obviously that are dry-farmed. It doesn’t mean that as the water table keeps falling that that’s not still an important factor as well. I’ve seen everything from looking at well permits and well history and having that codified for us in terms of what the pool rate is, what the history of the pool rate is on those wells. We also have to consider how much water a vineyard needs, whether or not they have a reservoir for storage capacity, whether, again, they have some sort of riparian rights that they’re drafting from. We also check to see if vineyards have certain rights, easements if you will, to neighboring properties for water. Beyer: We want to make sure they have sufficient water. We’ll check into
whatever their water sources are, surface or well. Many of the vineyards we land on have been farming them for 25 years, or it’s been in agriculture for a very long time. Many times we’ll ask them for well pump tests to confirm what the [gallonage] is on the wells. That would be the case with all the coastal vineyards. Edwards : In the appraisal process there’s an analysis done on the flow of the water. We haven’t actually so far seen a significant number of clients with water issues yet. We’re definitely interviewing people about how the water supply is, but at this time people pretty much have a handle on it. People can still drill wells as needed. They don’t need special permits for them. I think that’s still probably true in Sonoma and Napa counties. Hinde : Most water, at least from Sonoma and Napa counties, is either going
vineyard purchases. The capital markets and the banking markets still have a lot of liquidity in them, so that capital needs to be put to work. I think generally what we see is a relatively more healthy supply/demand equation for the wine markets. In general, I think the statement would be that there’s available capital from lenders and other sources of capital providers where the vineyard acquisitions are developing.
to come from a well or reservoir. A lot of times just walking the property will tell you a lot. If it’s a reservoir, does the property well run off even in the light winter enough to return to the reservoir? Then, you look at how many acre feet are in the reservoir versus the demands of the vineyard. If a well that’s been drilled for 20 or 30 years has been producing X amount of gallons per minute, we check records to see if that is still the case. There’ve been other droughts, not as severe as this one, but some of it is the unknown. Nobody has a magic box where they can scan the aquifer underneath the land that we farm on.
Beyer: I don’t think much has changed in this regard. Money is still quite
McGuire : The well drilling companies do a well test. They go out, and
available for loans.
Hinde : Just from a year ago, I wouldn’t say so. I think all the regular lenders
they’ll examine the system, check out the system and they’ll run the pump continuously for several hours, over 24 hours. They watch the production and measure the production and the output throughout that period, and determine whether it can sustain it for a long period of time. Typical set is 10 or 12 hours. They’ll run it for at least 12 hours to see what the well can put out. That’s documentation they can provide us.
out there now were here a year ago. Are there more players than there were three years ago? I’d say yes.
McMillan : We’re always looking at wells and getting historic information. I
Barnes : I think there’s good availability in capital for vineyard projects and
Edwards : There’s more. There’s a lot more competition now. I think even banks that weren’t traditionally lending on vineyards are doing so now.
McGuire : I think the market has been reasonable. The grape market was
problematic a few years ago, and I think it strengthened a little bit with some concern about potential over-production. I think this year, with the lower crop, that’s going to positively affect prices but not the availability of loan money.
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don’t think that’s really changed. You get historic information on the level of water that’s available. You’re looking at regions and more and more there are increasing technologies out there to show you what kind of surface water is available, what’s happening to aquifers underneath that area. The information is improving, and it’s good because there’s greater need now for that information in a more volatile weather pattern that we’re presently in.
Do you see more of a consolidation of grape supply? Barnes : I do think that as we move forward in time that vineyard proper-
ties, especially ones that are strategically critical to wineries that they don’t own or don’t have long-term leases on, will continue to be attractive targets for wineries. Obviously, the larger your balance sheet or clarity or resources, then they have more capital capacity to purchase those kinds of properties. I just think over time, this is sort of a natural progression. For example, I think companies like Jackson Family Winery have been very aggressive and very strategic in terms of picking up and purchasing vineyard properties, and I think a lot of other companies are doing it as well.
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Edwards : I think a lot of the big wineries are buying vineyards. Obviously,
there’s been a lot of transactions where family wineries are being purchased by larger wineries. This trickles down to consolidate the vineyards into few hands. I definitely think there’s consolidation now. Hinde : Yes, but I would preface it with I don’t think we’re anywhere near a
super mature industry where it’s like the 80/20 rule (80 percent of all vineyards are controlled by 20 percent of the owners). In terms of consolidation, if you just take Sonoma and Napa, there’s still room to grow in Lake and Mendocino counties and some of the periphery counties, but in Napa and Sonoma, there are no more large swaths of land to plant out to vineyards. McGuire : There are still a tremendous number of 40-acre vineyards out
there. There are some larger ones, and some of the new vineyard owners are larger. There are and will be bigger players selling grapes. But there are still a tremendous number of small fields, so it’s pretty diverse. McMillan : No. I see the wineries that are looking to lock down supply for
certain price point wines, and they are continuing to find those vineyards and buy them. By the same token, there are a lot of people that are wanting to be in the business, and strategic investors are trying to be in the business. We still see a significant amount of grapes being planted throughout the West Coast and, for that matter, nationally. We have wine regions in most states now, in some form or another, and each of those areas are going through their own level of, generally speaking, growth.
Do you expect your clients to be more profitable this year than last? Barnes : I do, although I think it’s from a winery standpoint. The large
vintages of the last three years are still moving through the pipeline. There is quite a bit of volume out there, and you do see some pricing strategies going on that include discounting at the shelf. That’s going to tend to put some squeeze on margins. This goes for a large volume producer in that under $10 market. The higher-end market is doing quite well.
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Edwards : Sales are growing. You’ve got top wine revenue growth kind of
across the board. Then there were a lot of clients over the last couple of years who increased their very high-end wine labels. They’re selling out of those, and the gross margins on the highest end product are pretty significantly higher. Because of the fiscal discipline coming out of the recession around expenses and expense control, I see significant focus on the bottom line and improvement.
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WBM December 2015 91
Demand for Vineyard Properties Increases
“I think with the small harvest this year some of the capacity issues will start working their way through the system. I think that there’ll be a little be less pressure on the space constraint.” Ruth Edwards, Bank of Marin
depends on the strength of the dollar that’s also putting that competitive mix of imports into our business as well. That would tend to keep a lid on prices and therefore impact our markets. Beyer: I think demand for wine will continue to increase. The key here is
we need to get some rain all over the state. The lack of water just is affecting everyone in different ways. Then there is the issue of the strength of the dollar. This affects exports a little bit. You can have more imports coming in. There’s a number of variables that affect the supply, but I think demand will stay pretty good. Edwards: I think with the small harvest this year some of the capacity issues
McGuire : This year, I think with yields down vineyards will suffer some
profitability. That’s kind of an across the board thing that I think is a good general assumption to make. Everybody is reporting that yields are down a little bit at least—sometimes substantially. I think profitability will suffer a little this year with vineyards. Wineries, I think in general, will be steady to increasing. McMillan : If we are talking about vineyards, it’s all regional, right? So if
you’re planted in the Central Coast, you might not see the same kind of yields. If you’re planted up in Oregon, you might see very good yields. Then you’re going to see, depending on the varietal, in the North Coast, varying yields. So while prices of grapes may or may not have gone up, what’s going to be the determining factor this year in vineyard profitability, like many years, is going to be the yield itself, and I think it’s going to be variable in the West Coast.
What surprised you this year? Edwards : With all you read in the general area about California and the
drought, it seems like everybody’s really managing it well and has a plan for their water—both company-wide and county-wide. I’m pretty impressed and surprised with how well everyone’s working together to handle it. McGuire : I suppose the expected decline in grape yields this year surprised
me a little bit. I think everybody expected there to be a little bit of a decline in production. But this year, some varieties, particularly Cabernet, are expected to be hit hard. The particular decline of that variety is a surprise. It’s not realized yet, but widely anticipated anyway. McMillan : What has me taking notice is the firmness of the pattern of
consumers trading up to higher price points. Generally speaking, the trading up pattern that we’ve seen now for some time, since the great recession, has continued and perhaps even gone a little stronger than I might have otherwise expected.
What changes or trends do you expect in the next year? Barnes : I think the water situation is what everybody is focused on right
now. We’ve had relatively good timing on water for the industry for a while now, but depending on all the chatter about El Niño and all that, I think it’s sort of a declining game almost, if you will, in terms of if we just keep having low water years. Eventually, it’s going to catch up. Maybe everything just
92 December 2015 WBM
will start working their way through the system. I think that there’ll be a little bit less pressure on the space constraint. That might take a year or two to get through the system. I think there will be further industry consolidation with the larger wineries buying up the smaller family wineries. I see the distributors having less ability to really sell through on the smaller producers’ products. Hinde : Look at the world stage now. The stock market has dropped 30 to 40
percent in recent months. We’re in a de facto state of currency war worldwide. The question in my mind is with these macroeconomic issues happening worldwide, trade is slowing down, wholesale inventories are up—I’m talking real macro stuff—that is building all the telltale signs of a potential slowdown. Will that translate into consumer buying habits? I think it does have the potential to affect wine sales. McGuire : I’m expecting that we’ll get more than average rain, and that will
flush the vineyards out and eliminate the potential for even further declines in yields from build-up of salts in vineyards. When we have a long period of dry weather, we get a build-up in the vineyards of salts, just from irrigation water putting salts in the soil. That can severely impact yields over time. As far as new plantings, I think we’ll continue with the moratorium. I think most vineyard operations will concentrate on re-planting older vines. McMillan : I would watch the activities of the core consumers—the higher
spending drinkers. It’s the Boomers who are the larger consumers; but as they move off into retirement, what’s the expectation? Are they going to continue to buy? Are they going to slow up in their consumption patterns? Are the Millennials—long-rumored to be the savior of the wine industry—going to step up and take over? These are the trends I am going to watch closely.
Conclusion With a stronger than ever economy and the consumer demand for wine still growing, wineries and investor type groups are the significant players in vineyard acquisition. Wineries, of course, see the need to control their own grape supply. Investors are buying vineyards for a perceived good return as grape demand continues. Still, other major buyers of vineyard property include large corporate grower types. Overall the healthy financial climate combined with continuing low interest rates and plenty of money to go around have only increased banker competition to secure new loans. WBM
people Wineries & Winemaking Peju Province Winery in Rutherford, California named Abdullah Vural as the new president. With a career spanning over 28 years in the luxury hospitality industry he adds another level of expertise to the winery, located in the heart of Napa Valley. Vural is the first president of Peju since the winery was established in 1983. The winery is owned by the Peju family, which includes Tony and Herta Peju, as well as daughters Lisa and Ariana. As president of Peju Province Winery he plans on leveraging his knowledge of luxury hospitality, first-class customer service and food and beverage excellence. Doubleback announced Walla Walla native Josh McDaniels assumed the role of winemaker. Consulting winemaker Chris Figgins handed over the reins in order to focus more fully on his Leonetti Cellar, Figgins Estate and Toil Oregon projects. McDaniels, a talented up-and-coming winemaker, has been an integral part of Doubleback for years. Effective 2015 harvest, McDaniels will be responsible for producing Doubleback Cabernet Sauvignon, Bledsoe Family Wine and the Signature Series Wines consisting of currently produced Stolen Horse Syrah and upcoming additions of Rose’ and Chardonnay. Silverado Vineyards promoted Elena Franceschi to the role of associate winemaker. A dedicated employee of Silverado Vineyards for 20 years, Franceschi has worked shoulder to shoulder with Silverado’s long-standing winemaker, Jon Emmerich, to craft Silverado’s estate-grown wines. Franceschi is a graduate of the Enology Department of Fresno State University where she also served as a teaching assistant. Prior to joining Silverado Vineyards, she worked with Chateau St. Jean, Sonoma-Cutrer and Mumm Napa Valley.
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Wine Creek, LLC, hired Sam Tesconi as sales and marketing associate for its Quivira Vineyards and La Follette Wines. Tesconi joins Wine Creek from Benziger Family Winery in Glen Ellen, where he was a marketing and sales analyst for the Benziger and Imagery brands. He has experience in a variety of brand marketing and sales functions, including quantitative analysis, direct-to-consumer programs, copywriting and sales support programs. Prior to joining Benziger, Tesconi worked for Mauritson Family Winery and Trione Winery, handling social media and direct-to-consumer sales. King Estate Winery hired longtime public relations leader Jenny Ulum as its managing director of strategic communications. In this new role, Ulum will oversee all marketing, public relations and public affairs work for the winery’s brands, including King Estate, North by Northwest and Acrobat. Ulum previously held a variety of communications and government relations leadership positions for PeaceHealth, and owned public relations firm The Ulum Group from 1995 to 2008. She has a master’s degree in journalism from the University of Oregon. Monterey County’s family-owned Albatross Ridge appointed Marc Cutino to vice president of sales. Cutino now oversees the sales program for Albatross Ridge’s small portfolio of estate-grown Chardonnays and Pinot Noirs, while working with its existing distributor partners, and establishing Albatross Ridge in new markets throughout the United States. Cutino joins Albatross Ridge after eight years as the Pacific Northwest regional sales manager for Monterey’s Talbott Vineyards. While at Talbott Vineyards, Cutino oversaw an expansive territory that included the winery’s largest wholesale market, Northern California. Hedges Family Estate named Matt Rule assistant winemaker. A native Californian, Rule pursued a career in law enforcement when the recession curtailed job opportunities. He joined a supply company in California and through this position became familiar with agriculture and viticulture practices in the state’s Central Valley. This led to an interest in wine and an introductory wine class. Shortly thereafter, Rule enrolled in the enology program at California State University, Fresno. The three-year program included a part-time position in the university’s on-campus commercial winery. Upon graduating in June 2014, he was hired as Fresno State’s full-time assistant winemaker. A month into his position, he was asked to take over as head winemaker for this 8,000 case per year winery, a role which also included teaching a winery production course. After a year at Fresno State Winery, Rule decided he wanted to broaden his horizons and learn more about other regions and winemaking styles. He jumped at an opening at Hedges Family Estate. Treasury Wine Estates appointed of Megghen Driscol to the position of vice president, public relations and corporate communications for North America. Driscol oversees all media relations, corporate communications and event marketing initiatives for TWE and its portfolio of brands including Beringer, Penfolds, Chateau St. Jean, Stags’ Leap Winery, Lindemans, Matua, and 19 Crimes. Driscol brings more than two decades of luxury and commercial wine business experience to Treasury Wine Estates and has extensive experience in all areas of marketing communications. She has held senior-level positions with Allied Domecq Wines, Diageo Chateau & Estates and Southcorp Wines.
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Frank Family Vineyards promoted winemaker Todd Graff to general manager. He will continue in his role as winemaker in this position. Graff joined Frank Family Vineyards as winemaker in 2003 and has played an essential role in Frank Family’s steady growth over the last thirteen vintages. Graff has applied his deep expertise in making both still and sparkling wines to the portfolio, and has been an integral player in defining Frank Family’s reputation as a world-class producer of Napa Valley Cabernet Sauvignon and Chardonnay. He directed the construction of Frank Family’s new stateof-the-art winery in 2008, worked closely on the acquisition of the historic Wood Ranch Vineyard in Rutherford in 2012, and in 2015 helped Frank Family receive “Napa Green” certification for both land and winery. Wes Hagen, winemaker and vineyard manager at Clos Pepe Vineyards and Estate Wines in Lompoc for 21 years, has left his family’s vineyards in the hands of Hall/Walt Wines of St. Helena to become the full time consulting winemaker and brand ambassador for J. Wilkes Wines in Santa Maria. Sustainable Long Island honored Bedell Cellars and CEO Trent Preszler at the 3rd Annual Sustainability All-Star Awards. Bedell Cellars is one of two honorees being awarded because of their dedication to advance sustainability initiatives Island-wide. Bedell Cellars composts all their grape seeds and skins and vine cane prunings each year, spreading them back in the vineyard as natural fertilizer. Such responsible re-use of on-farm nitrogen sources protects Long Island’s fragile groundwater supply. CEO Trent Preszler has also led the charge as a founding member of the Long Island Sustainable Winegrowing organization, which provides licenses and education for Long Island vineyards that ensure a safer and healthier environment and workplace.
Euro Machines added Colin Baker to the sales team as a sales and service manager working along with Rick Austin in support of Central Coast customers. Baker has grown up around wineries since he was 11 years old, leading him to a career in the wine industry. During this time, while working at several wineries, he has worn many hats including cellar master, facilities manager, and assistant winemaker. Baker has worked with a multitude of equipment and winemaking styles and understands winemaker’s needs on both an equipment and winemaking level.
Associations & Education Cal Poly’s College of Agriculture, Food & Environmental Sciences welcomed new Wine & Viticulture Department head Benoît Lecat. Lecat joins Cal Poly from the Burgundy School of Business in Dijon, France, and has a strong background in wine business. He will play an integral role in helping to raise the additional funds needed for the new Center for Wine & Viticulture. Lecat earned his undergraduate degree in management and two master’s degrees (in management and political science) from the Catholic University of Mons in Belgium; and his doctorate in management and marketing from the LOUVAIN School of Management in Belgium. His research interests are wine pricing, tourism and branding, wine and spirits tourism and the management of luxury goods. WBM
Industry Services & Suppliers Sylvie Langlois began her new role as sales representative for Saxco International’s West Coast wine business. She assumed responsibility for existing winery accounts and cultivate new business in the wine category, bringing strong industry relationships, a keen knowledge of wine and spirits packaging and expertise with glass and closures from previous sales roles. Todd Whiteford joined the Cork Supply USA team as a sales consultant and will be representing our capsules and sparkling wine products to clients in Sonoma. Whiteford brings a history of demonstrated sales success to his new role, including 20 years in technical biological sales management. He and his wife, Amy, co-own a portion of Warnock Vineyards in Napa Valley’s Soda Canyon. To oversee the complex financial aspects of the now much larger company, Tapp Label announced today the appointment of Gerald Hauprich as their new CFO. Hauprich brings over 30 years of accounting, finance and manufacturing operations experience in start-up, mid-sized, and large public companies. For the past 10 years, he has served as controller of CamelBak and chief financial officer of Dilithium Networks and, most recently, Mighty Leaf Tea. Hauprich spent 14 years in accounting and manufacturing operations positions of increasing responsibility at Molex, an international electrical connector manufacturer. WBM December 2015 95
advertiser index Thank you to all of our advertisers! Company
web address
page
Company
web address
page
Acrolon Technologies, Inc.
www.acrolon.com
65
Nomacorc
www.nomacorc.com
11
Alain Fouquet French Cooperage
www.alainfouquet.com
38
Owl Ridge Wines
www.owlridge.com
17
Alfa Laval Tank Equipment, Inc.
www.gamajet.com
39
P&L Specialties
www.pnlspecialties.com
46
All American Containers
www.aacwine.com
85
PA Trellising Systems, Inc.
www.patrellising.com
81
American AgCredit, CoBank, Farm Credit West, Northwest Farm Credit Services
www.farmcreditalliance.com
69
Portocork
www.portocork.com
3
American Tartaric Products, Inc.
29
44
Premier Wine Cask
www.premierwinecask.com
www.americantartaric.com
American Vineyard Foundation
89
71
Rabobank, NA
www.rabobankamerica.com
www.avf.org
Amorim Cork America
45
21
Rack & Maintenance Source
www.rmswinebarrelracks.com
www.amorimca.com
Ramondin USA, Inc.
www.ramondin.com
19
Ranch Winery
www.ranchwinery.com
2
Revolution Equipment Sales
www.revolutionequipmentsales.com
29
Santa Rosa Stainless Steel
www.srss.com
17
Scott Laboratories, Inc.
www.scottlab.com
46
Shur Farms Frost Protection
www.shurfarms.com
76
Spec Trellising
www.spectrellising.com
38
St. Patrick’s of Texas
www.stpats.com
67
StaVin, Inc.
www.stavin.com
41
Sunridge Nurseries
www.sunridgenurseries.com
77
Tom Beard Co.
www.tombeard.com
35
Tonnellerie Orion
www.tonnellerieorion.com
65
Tonnellerie Quintessence
www.tonnelleriequintessence.com
34
TricorBraun WinePak
www.tricorbraunwinepak.com
55
TW Boswell
www.twboswell.com
33
UC Davis Wine Executive Program
www.wineexecutiveprogram.com
51
Unified Wine & Grape Symposium
www.unifiedsymposium.org
13
Union Bank
www.unionbank.com
87
Vintage Nurseries
www.vintagenurseries.com
73
Vitro Packaging, LLC
www.vitropackaging.com
43
WECO Sorting and Automation
www.wecotek.com
57
Westec Tank & Equipment
www.westectank.com
58
Western Square Industries, Inc.
www.westernsquare.com
63
Wine Industry Technology Symposium
www.wineindustrytechnologysymposium.com
99
WineDoc® - Winery Consulting
www.winedoc.com
85
Winejobs.com
www.winejobs.com
93
WiVi Central Coast
www.wivicentralcoast.com
22
Pacific Coast
APCOR Portuguese Cork Association www.realcork.org
25
ARS/Swash Cleaning and Sanitization www.cleanwinery.com
63
Barrel Builders, Inc.
www.barrelbuilders.com
37
Bergin Glass Impressions
www.berginglass.com
5
Bucher Vaslin North America
www.bvnorthamerica.com
52
California Sustainable Winegrowing Alliance
www.sustainablewinegrowing.org
60
Castoro Bottling Co.
www.castorobottling.com
76
C-Line Express
www.c-linexp.com
95
Criveller Group
www.criveller.com
47
ETS Laboratories
www.etslabs.com
49
Euro-Machines, Inc.
www.euromachinesusa.com
61
Flexcube – The New Cooperage
www.flexcubegroup.com
62
Flextank Inc.
www.flextankusa.com
52
Ganau America, Inc.
www.ganauamerica.com
Granbury Solutions
www.granburyrs.com
83
Grapes & Bulk Wine
www.winebusiness.com
72
Gusmer Enterprises
www.gusmerwine.com
31
GW Kent, Inc.
www.gwkent.com
59
Hinman & Carmichael, LLP
www.beveragelaw.com
94
Innerstave, LLC
www.innerstave.com
53
Innovation + Quality
www.winebusinessiq.com
La Garde
www.lagardeinox.com
7
Live Oak Bank
www.liveoakbank.com/wcb
91
Lux Barrel Bungs
www.luxbarrelbungs.com
38
Monvera Glass Décor
www.monvera.com
9
Moss Adams, LLP
www.mossadams.com
15
Nadalie USA
www.nadalie.com
56
Napa Valley Vintners
www.napavintners.com
75
(a division of SML Stainless Steel Group)
96 December 2015 WBM
100
26, 27
Half-Price Sale I can do, Jake,” Chuy tells me. “It shows my solidarity with the grape growers who are running just 40 to 50 percent of their normal crop this year.” Nobody tells Chuy Palacios what to do, especially when it concerns his Burrito Palace. If the best cook in wine country wants to have a half-price sale, then who is this detective to argue? I decide to have his divine breakfast burrito made with Chuy’s homemade chorizo, Yukon Gold papas and farm fresh huevos. Of course there is cheese and Burrito Palace chile sauce to take the thing over the top. I sip on my coffee, which has been doctored with a shot of Pura Sangre Añejo tequila as the sizzling sound of chorizo hitting the hot pan sails through the room, along with the heavenly aroma of pork, chile and garlic. Within minutes, Chuy proudly sets the plate in front of me. “Here you go, carnal, the Burrito Palace Breakfast Burrito Half-Price Special.” Jake Lorenzo looks at the plate. I look at Chuy. I look back at the plate. “Carnal, there is only half of a burrito here.” “Like I told you, amigo, it’s a half-price special. You didn’t really expect to get a whole burrito for half of the price, did you?” he asks. “Did the growers offer their grapes at half price, just because they only had half of their grapes? They did not. They would have gone broke. Are you trying to put me out of business, Jake?” I sigh and shake my head. No one ever wins an argument with Chuy, not in a courtroom, not in the Burrito Palace. I decide to eat my half burrito and keep my mouth shut. I do nudge my coffee cup so Chuy refills it and hits me with another shot of tequila. If I’m going to be on the Burrito Palace half-price diet, I might as well drink. Burritos aside, 2015 has been a tough year for growers. Shatter and shot berries have made for small crops, with accurate tonnage estimates all but impossible. Once grapes were picked, the reality turned out to be worse than predicted. Crop size varied depending on variety, but Pinot Noir, Syrah and much of the Cabernet got hit particularly hard, sometimes coming in at only 50 percent of normal. People worry about the growers. Imagine getting just half of the income you expected. Jake Lorenzo feels for the growers, but I don’t worry about them. After all, they are coming off three very good years: vintages that produced high quality and good quantity at mostly high prices. The growers had plenty of time to salt away some cash. Hadn’t their mothers told them to save for a smoky day? No, this detective worries about all the ancillary people affected when crops are just half of normal. How about the pickers? Pickers are not rich. They don’t own hundreds of acres of prime vineyard land. They work their butts off in hot, dusty fields, lugging heavy boxes of grapes while trying to limit MOG and get everything picked before the heat of the day. For the workers who are here year-round, working in the vineyard, helping on the bottling line, handling maintenance on equipment and buildings, the harvest is a time for them to make some real money, sort of like a bonus. Not this year. Not with just half the grapes. Sales people are going to have a lean year. I can hear barrel orders being cancelled while I decide on whether or not to order another half-price burrito. You don’t need glass to bottle wine you didn’t make. Less glass means
“IT IS THE LEAST
fewer corks, capsules and labels. All those sales people work on commission. You don’t get commission by selling less. Half the wine probably translates to half the commission. Getting half the grapes, even when most of them come in early, means that most wineries had a lot of empty tanks. It would take a pretty persuasive winemaker to convince an accountant that he should buy more tanks for the 2016 vintage. Fewer tanks mean fewer valves, doors, vents and thermostats. Hell, you can probably save on glycol. There is only half as much to keep cool. It doesn’t matter if your tanks are made of stainless steel, concrete or wood; if wineries don’t have wine, they don’t need to buy tanks. It is bad enough that pickers didn’t make any money and that sales people are getting hit in their commissions but what about consumers? Half the grapes means there will be half the wine. As sure as climate change, a wine
It is bad enough that pickers didn’t make any money and that sales people are getting hit in their commissions but what about consumers? Half the grapes means there will be half the wine. shortage is coming. If you think all the available bulk wine isn’t being gobbled up in a frenzy right now, then you deserve to pay $15 for a glass of mediocre wine in your neighborhood restaurant. Wineries know that their wine clubs have first priority. After all, those are the profit centers. In a year or two, with only half the wine available for sale, the wine clubs get first dibs. What does that leave for distributors, restaurants and off-premise stores? How is a wine salesman supposed to make a living? Jake Lorenzo knows that if I am working the streets, then it behooves me to get acquainted with the foreign side of my book right now, ahead of the curve. I need to start convincing my customers that a lovely Côtes du Rhône will do fine where that California Grenache used to be. I need to remind them of how unctuous and delicious Argentine Malbec can be, especially now that they have toned down all that oak. Hell, Malbec is a Bordeaux variety. They can sell it in place of really expensive California Cabernet. Once I show them the prices and direct them to the delicious treasures available, they will thank me for steering them in the right direction, especially when California wine prices go up, as they almost certainly must. Half the grapes is just the beginning. All sorts of people connected to the wine industry are seeing their incomes diminish. Less income means less spendable cash, especially for luxury items like expensive wine. Let foreign wines get a bigger foothold in our restaurant wine lists and on our store shelves, and it will be very difficult to regain those spots once we again have the wine available. You think this is bad? What if we get another year of drought? If El Niño doesn’t deliver plenty of rain, along with lots of snow, then half the grapes is the least of our problems. Jake Lorenzo thinks he’ll pass on the burrito special. I’m heading to the store to buy wine, while I can. WBM WBM December 2015 97
ILLUSTRATION BY BOB JOHNSON
jake lorenzo
winemaker of the month
Irv Geary, winemaker, Wild Mountain Winery, Taylors Falls, Minnesota “From the first time I read Wine
Geary, winemaker
WINERY NAME AND LOCATION:
Wild Mountain Winery in Taylors Falls, Minnesota, specializes in locally
grown, cold-hardy grapes. ANNUAL CASE (OR GRAPE/TONNAGE) PRODUCTION: 2,500
cases
16 acres of cold-climate grapes from University of Minnesota and Elmer Swenson. Varietals include: Marquette, LaCrescent, Frontenac and Frontenac Gris, St. Croix, Prairie Star, Sabrevois and Marechal Foch PLANTED ACRES:
CAREER BACKGROUND: I
started with an interest in grapes and wine in 2000, when I planted my first vineyard. After making many mistakes, I planted my current vineyard in 2003. I originally was growing for other wineries and then partnered up with another grower to open Wild Mountain Winery in 2011. My winemaking education consists of 17 years of cold climate trials on my own along with various short courses. I am currently the president of the Minnesota Grape Growers Association which has over 500 members and 36 winery members. We are currently creating a Best Practices manual for growing grapes in the upper Midwest cold climate. To us cold climate is based on yearly winter lows ranging from -25° F to -35° F, which is why we grow the hybrids that we do.
WHAT HAS BEEN YOUR BIGGEST PROFESSIONAL CHALLENGE? Learning
how to make quality wine from high acid hybrids has been both challenging and rewarding. Many of these varietals lend to high aroma profiles and can make wonderful wines, but acid reduction is a must (no pun intended). As a result, most people assume all of our wines will be sweet to offset the high acids. I always tell our customers that I don’t aim for sweet or dry but instead look for balanced wines. Our goal is to make high-quality sweet and dry wines that can stand on their own with other nationally recognized brands. The other challenge is getting our wines into the greater market. Getting locally made wines into liquor stores is not easy without a distributor. Distributors don’t want to carry non-nationalized labels which put us in a catch-22. I completely get the need for the three tiers but it has definitely been a difficulty for new, small wineries trying to get into the market.
Our Frontenac Rosé has had great success. As a Rosé it has won numerous medals from Finger Lakes to Indy to the recent North American Rosé competition. As a varietal it has higher acidity and great fruit aromatics which begs to be a Rosé. Our customers tell us over and over that they think it is one of the best Rosés on the market. Our other venture we are excited about is our new Ice Wine made from 100 percent Frontenac Gris. We believe this is a wine that can allow our wine region to compete nationally. We’re pretty good at freezing grapes on the vine. It’s guaranteed to happen this far north. VARIETALS THAT YOUR WINERY IS KNOWN FOR:
98 December 2015 WBM
“
NAME AND TITLE: Irv
Business Monthly I was hooked. It always has the latest trends in the market as far as what’s working and what’s not. The information is always very relevant for not only large wineries but small Midwestern wineries as well. I appreciate that WBM covers all the categories of the industry from growing to technology to sales and marketing. I very much enjoy Mark Greenspan’s growing articles each month. I’m always interested in his insights as I firmly believe that the wine is made in the vineyard. Not to be left out, my favorite monthly column is Jake Lorenzo. It is entertaining on all levels. I especially enjoy the contributing winemakers that are interviewed for differing varietals or regions each month. I always like to hear other’s opinions and techniques on fermentations. I particularly enjoyed the May Cool Climate Vineyards article. This is a close resemblance to what we deal with each harvest. The contributing wine makers describe a good point in that ripeness is not always about high Brix, which took me a long while to understand.
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