Positive signs of recovery for the wine industry in 2010. We can all breathe a sigh of relief that consumers are drinking again. Well, they never stopped drinking, just now they're drinking the good stuff. Consumers are now buying $25-$50 bottles of wine whereas last year and the year before they were buying bottles under $15.
I got to thinking about what it costs to produce a bottle of wine. Things that factor into the price have a lot to do with the work done in the vineyard. Each time vineyard workers go through the rows and touch the vines, it costs money. In good vintages, a winery will get good fruit with less touching of vines, hence, less cost basis. In a bad year, a winery might have to do a significant amount more work just to get fruit to a good place by harvest. From vintage to vintage, these are unfixed costs that can't be controlled. If a winery is buying fruit from another vineyards, there might also be a fluctuation of what the fruit costs per ton. In 2010, many vineyard in Northern California lost 20-30% of their crops because it was a cool summer. Grapes weren't getting ripe, so vineyard managers cut leaves off the vines that normally act as shade from the sun. Mother nature, it seems, has a sick sense of humor. Shortly after leaves were cut off, there was a heat spike over 100 degrees for a few days. That turned 20-20% of grapes into raisins. Without the normal leaf shade, the grapes didn't stand a chance.
One (somewhat) fixed cost in wine is the cost of oak barrels. A brand-spanking new French oak barrel costs somewhere around $800-1200. A barrel can be used a few times before it becomes "neutral," or doesn't impart oaky flavor. American oak is an option, but French oak is the preferred choice. Wineries order pallets of oak barrels each year. Do the math with me. If a winery buys 500 new oak barrels at an average of $1000 per, that's $500,000 in barrels.
Here's where my brilliant idea for financial recovery comes into play: Use less oak. Simple, huh? In 2010 I tasted more overly oaked wines than I cared to. Why on God's green earth are winemakers oaking the shit out of their wines? This is a debate that's been around for years, but I'm really baffled. Cut the amount of oak down 25% on your next barrel order. Actually make wine that expresses the vineyard and don't cover up flaws with an orgy of French oak. Not only could wineries save a few hundred grand, but they might actually make a better wine. Why has nobody done this?
Take for example the 2007 Quilceda Creek Red wine from Washington state. For years I've been a lover of QC wines, and have ordered from their mailing list. After drinking (or trying to drink) this wine, I decided to drop off the list. At 15.2% alcohol, the lower tier QC resembled Vodka and Robitussin rather than a world class wine. There was so much oak on this wine, my wife and I literally could not finish it. We ended up making a sauce instead.
In Napa and Sonoma I've experienced something similar. Dozens of overly oaked wines that really have no reason to be so oaky. Robert Parker isn't helping any by giving these behemoth's inflated scores, and essentially rewarding them for oak.
So there it is, use less oak. That reduces the carbon footprint for shipping. It saves more trees. Wineries save on costs and wine drinkers get a better wine. What do you think?