In last month’s column, I reported about our little secret in the wine industry—so-called “beverage wines” or, better termed, “instant headaches.” The Thunderbirds and Richard’s Wild Irish Roses are the leaders in the “wino” group and make up a significant portion of the bottom line for Gallo and Canandaigua. I also think consumers of those wonderful products are a significant factor in our already very low consumption per capita, which resides around 2.5 gallons per year.
The spirit and beer markets, however, are constantly coming up with new ideas and products. As you’re probably aware, the latest fad is craft beer. I’m not sure what the total meaning is, but I think the idea originated as microbreweries, but then Bud and Miller joined the fray, so I guess they needed a new name. Many of my beer-drinking friends think it’s a great addition to the world of beer. Remember the old saying that it takes a lot of good beer to make good wine (a crush pad tradition)?
The other big product coming out is flavored spirits such as Absolut Tune—a blend of Sauvignon Blanc and vodka, and Smoke, which is a Muscato and vodka blend. There’s also a multitude of other blends with various fruits. Arbor mist (Canandaigua) has its own version of a Slurpee. One of them is a frozen wine cocktail that’s a blend of Pinot Grigio and white pear liqueur. Freeze it and eat it, and it’s actually quite tasty.
On another topic, I’m going to congratulate myself since no one else will. As many of you might remember, it was about 10 years ago that I started my crusade about wine labels listing an AVA from within Sonoma County should also include the words “Sonoma County.” This law is called the Conjunctive Labeling Law and took effect January 1, 2014. No longer can a winery that has Alexander Valley wine only put Alexander Valley as the appellation. How many people know where Alexander Valley is except for the lucky few who are fortunate enough to live here? It’s even truer of most of our lesser-known appellations. It took forever to overcome all of the egocentrics in the local industry to finally realize that having Sonoma County on the label is a positive. God only knows I was sweating blood and tears for many years trying to get this idea across. By the way, the print size must be at least 2 millimeters and not obscure. (Just thought I’d throw that in!)
Speaking of Sonoma County, we have a new, large-scale winery making its home in Healdsburg. Originally located in a Hopland facility that was recently purchased by Duckhorn Cellars, Rack & Riddle has moved into a 67,000-square-foot facility behind City Hall and, just recently, added the 50,000-square-foot Murphy-Goode Winery in Alexander Valley to its operation. Plans eventually call for annual case production of 1 million. The company specializes in sparkling wine, but also does still wines. Fundamentally, it’s a custom crush facility.
Custom crush facilities are a very intricate piece of our diverse wine industry. First, a person can get into the wine business without the great expense of building a winery. It’s also an alternative outlet for a grower who couldn’t sell all of his or her fruit. Once the wine is made, the grower can have it bottled with his or her own label and then try to sell it. I emphasize the word “try,” since selling is most certainly the hardest part of the entire wine/grape industry.
Should the grower decide to sell rather than bottle it, there’s a very big bulk wine industry where it can be marketed. The bulk wine industry is another of those little secrets the industry has developed. It’s composed of two major league players, Ciatti and Co. and Turrentine Wine Brokerage, and a few smaller players scattered throughout the state. They’re strictly paper-handling companies where a winery or grower would list what they have for sale and the brokers will then offer samples to interested buyers (other wineries). Once accepted for a given price, the wine is shipped from seller to buyer. Now you know what all of those stainless steel tanker trucks are doing on the road all year. Each carries about 8,000 gallons, or about 171,000 glasses.
Prices can range from less than $1 to $25+ per gallon, depending on various market conditions. (Remember my rule: Price isn’t based on quality, but rather on availability.) If someone is looking for bulk wine, the major questions are variety, appellation, vintage, gallons and price. Once a buyer decides on these, he or she requests samples from the broker, and they’re tasted and evaluated. If his or her needs are met, the wine is purchased and shipped. The wine is sold by the gallon and, typically, the highest-priced wines come from Napa and Sonoma. The lowest-priced ones come from the Central Valley. Today, some Sonoma County Chardonnay is $25+ and Napa Cabernet about $30+. San Joaquin Valley wines might go for $2 to $3 per gallon. Wines for Two-Buck Chuck (actually $2.49 now) might be purchased for less than $1 per gallon. There are 2.37 gallons per case of wine, so $2 per gallon bulk is about $5 worth of wine per case. Obviously, at $25, that’s about $60 for the wine in a case. There are millions of gallons available now and the prices will start to drop soon and get very low by the next harvest as tanks need to be emptied. To satisfy your curiosity, go online to www.turrentinebrokerage.com and see a complete listing of what’s available, and remember, that’s only one of the brokers in the state.
With a yield of four tons per acre, you’re getting 160 gallons per ton (depending on how much water the winery added—but that’s just to wash the gondolas, of course). That equates to 640 gallons per acre. At even $5 per gallon, that’s a gross revenue of $3,200 per acre—far below our costs of production, which range from $5,000 to $8,000. With low-yielding Pinot Noir vineyards, yields could be two tons per acre or less, and operating costs could be up to $10,000+ per acre, thus equaling about $31 per gallon. Is that why I don’t drink Pinot Noir?
Next month, I might look at our most critical issue in the entire industry: water, fresh and waste. As of this writing, it’s still very dry, so let’s hope by the time this column gets published it will have rained lots!
