Author: Cyndi

The Refined Palette of Investment

Cyndi

Exploring Wine as a Strategic Asset

wine bottle laying on blue silk

By: Shana Orczyk Sissel – Founder, President & Chief Executive Officer of Banríon Capital Management

In a time period marked by the unpredictable swings of traditional markets, many investors are turning their attention to more tangible assets that provide not only financial returns but also offer a personal and luxurious experience. Among these alternatives, fine wine is becoming increasingly appealing. As a long-time observer and participant in the alternative investment space, I have seen a significant uptick in wine investment interest, particularly among investors aiming to diversify their portfolios while adding a uniquely personal touch.

Why Wine?

  The appeal of investing in wine is layered and robust. Historically, fine wine has shown remarkable resilience in the face of economic downturns, often outperforming traditional stocks and bonds during inflation and market instability. This resilience is largely due to wine’s status as a luxury item, with its value driven by limited supply and increasing global demand. The finite production of certain vintage wines means that as bottles are consumed, the remaining ones become rarer and potentially more valuable. This positions wine not just as a hedge against inflation but as a compelling means for capital preservation.

Wine Fundamentals for Investors

  For those new to wine investing, understanding the fundamentals is crucial. Key factors to consider include the reputation of the vineyard, the quality and rarity of the vintage, and proper storage conditions to preserve the wine’s value. Investing in wine requires a strategy for buying, storing, and eventually selling:

●     Selection: Focus on well-known regions like Bordeaux, Burgundy, and Napa Valley, which historically produce wines that appreciate in value.

●     Storage: Proper storage is critical and should be in a climate-controlled environment to protect the wine’s quality and longevity.

●     Insurance: Like any valuable asset, wine collections should be insured, especially as their market value increases.

●     Exit Strategy: Knowing when and how to sell is as important as knowing what to buy. Most fine wines reach a peak market value at a certain point of maturity.

Personalization at Its Best

  Investing in wine is a deeply personal experience. Each bottle has its own story, tied to its origin, vintage, and the subtleties of its taste. This personal dimension allows financial advisors to engage with their clients on a deeper level. Offering wine as dividends, for instance, instead of traditional cash payouts, forges a more meaningful connection between investors and their investments. Imagine the moment of pride an investor feels when uncorking a bottle from “their” vineyard’s wine while entertaining at home.

Strengthening Relationships

  For advisors, the wine industry offers a distinctive way to deepen client relationships. Discussing wines, sharing tastings, and exploring vineyards can be powerful relationship-building experiences. These interactions allow advisors to connect with clients in settings that extend beyond conventional business environments, fostering a sense of camaraderie and shared interest.

  In the same vein, effectively marketing a vineyard or winery to financial advisors can enhance these relationships further. Invite advisors to your property for tours, tastings, and in-depth discussions about your production process and business philosophy. When advisors are familiar with a vineyard’s story, its commitment to quality, and its unique offerings, they are better positioned to recommend these investments confidently to their clients.

Diversification Through Wine

  Wine offers substantial diversification benefits. Its low correlation with conventional financial assets like stocks and bonds means it can help smooth out portfolio volatility, providing steadier returns over time. Incorporating wine into an investment portfolio can act as a buffer against market swings, appealing to those seeking more stability in their investment journey.

Avenues for Investing in Wine

  There are several options when it comes to investing in wine, each offering unique benefits and risks. Direct ownership of bottles or cases is the most traditional method, providing control over selection and requiring knowledge of wine regions and proper storage. Alternatively, wine funds offer ease through professional management, though they lack liquidity and involve fees. Those preferring a more traditional market approach might consider wine stocks, which involve investing in publicly traded companies related to the wine industry. Wine futures, or “en primeur,” allow investors to buy wine before it is bottled, potentially at lower prices, but this comes with its own set of risks related to market and production quality.

  Emerging trends like wine exchange platforms and crowdfunding are modernizing wine investment. Exchange platforms provide transparency and liquidity, enabling the trading of wine much like stocks. Crowdfunding platforms let investors buy shares in vineyards or wine projects, reducing the barrier to entry and allowing participation in potential profits from wine production without substantial upfront investment. We work closely with advisors to help them tailor and better understand the investment options that work best for individual clients.

Seizing Opportunities in the Regulatory Landscape

  Recent shifts in regulatory frameworks have opened new avenues for winemakers and investors. With the ability to raise capital from the public more freely than before, vineyards and wineries can now explore new ways of funding their operations and expansions. However, despite the high demand, there are surprisingly few wine funds available, offering a niche yet potentially lucrative investment opportunity. A thorough understanding of the market and regulatory environment will ensure investors can identify and capitalize on the best offerings.

Targeting a Broader Investor Base

  The demographic of wine investors is expanding, with women in particular drawn to the combination of cultural appreciation, luxury, and investment potential that fine wine offers. Wineries have a significant opportunity to cater to this demographic, especially at tastings, which predominantly attract couples and women. Additionally, social media has introduced new marketing channels that are not only more cost-effective compared to traditional advertising channels like television, but also resonate strongly with the female market. Influencers can provide a personal touch and create authentic connections with products, while “mom memes” underscore wine’s cultural integration.

Global Market Trends

  The global wine market is experiencing significant shifts, influenced by changing consumer behaviors and economic conditions. According to Spherical Insights, the global wine market size is projected to reach $583 billion by 2032 with a compound annual growth rate of 5.7%. Emerging markets, especially in Asia and parts of Africa, are developing a robust appetite for luxury wines driven by increasing wealth and a growing middle class. As a result, demand is likely to keep rising, potentially pushing prices higher in well-established and emerging wine markets alike.

  In Europe and North America, consumption patterns are stabilizing, but the interest in high-quality, sustainable, and boutique wines is growing. This shift towards premium products supports higher price points and can enhance investment returns.

The Future of Wine Investing

  The future looks promising for the wine sector. As awareness of its benefits grows, more investors are likely to explore how wine can complement their portfolios. For newcomers, starting with a reputable wine fund can provide a secure and enlightening entry into the market, combining financial benefits with the pleasure of ownership.

The Last Sip

  Wine investing extends beyond simple asset acquisition; it’s about embracing a lifestyle and crafting a portfolio that mirrors personal tastes and passions. For those eager to incorporate sophistication and personalization into their investment strategy, wine offers an enticing path. Whether you’re a seasoned collector or new to the world of wine, the right investment strategy can transform every sip into not just a taste of exquisite craftsmanship but also a toast to financial prosperity.

As Founder, President & Chief Executive Officer of Banríon Capital Management Shana Orczyk Sissel helps independent advisors navigate the complex world of alternative investing, bridging the gap between public and private alternative investment opportunities. Additionally, she assists clients with investment platform development, alternatives in portfolio construction and developing best practice in alternative investment due diligence. In this role, Ms. Sissel assisted in the launch of Armada ETF Advisors, and served as a key advisor in the firm’s recent launch of its first ETF product, the Home Appreciation U.S. REIT ETF (HAUS).

AgTech Advancements Powering Vineyard Innovations

Cyndi
person holding cell phone up to grape cluster

By: Josh Mickolio – DigiKey

  For a long time, wineries have used technology to produce excellent wine. These technologies include tank sensors that offer real-time data on oxygen levels, temperature and sugar content. As wine regions face challenges like labor shortages, increasing temperatures, wildfires and drought, some winemakers are looking towards smarter technology to secure their future.

  Modern vineyard owners are increasingly turning to agriculture technology (AgTech) solutions to help keep up with the pace of global wine demand. A wide variety of factors have made the grape growing job more complex and challenging, along with climate change and labor shortages, rising costs and a decreased interest in viticulture as a career. Digital tools for monitoring soil health, weather patterns and grapevine vitality are a necessity for modern vineyard operators.

  Advancements in AgTech are responsible for smarter harvesting, the electrification of equipment and better data collection in order to make more informed decisions. Plus, advances in global connectivity have improved data communication speeds, even in extremely rural or hillside locations where vineyards are often located.

  One of the AgTech solutions that is picking up a great deal of steam is precision agriculture, which relies heavily on technology to more accurately and efficiently complete winery tasks. To better understand vineyards through data, wineries are installing weather stations, soil moisture and temperature sensors and flying drones with infrared technology to gauge the health of their vines.

person with drones flying in vineyard

Improved sensor technology ultimately leads to better, more precise results for growers, including better equipment positioning and monitoring.

  Viticulture requires a great deal of energy and resources, and precision agriculture aims to use that energy and those resources more effectively and efficiently for the betterment of all. Modern wineries rely on technology to elevate the art of grape growing with automated and sustainable solutions.

Technology Enables Evolution

  The transition from traditional practices to a more modern approach has become more than necessary for vineyard operators. With the global wine market projected to reach over 450 billion by 2028, staying competitive in this industry requires an equal blend of tradition and technological innovation. While most grape growers and vineyard staff do the cultivation work like pruning or leafing by hand, the data and new technologies help them know which plants need special attention.

  Over the following decades, connectivity solutions have continued to improve, enabling faster data transfer for both cloud and edge computing globally. Additionally, the capabilities of autonomous solutions have accelerated in recent years, such as improvements in optics processing, the growth of artificial intelligence and the introduction of solid-state LiDAR—all of which add up to advancements for precision agriculture.

  In order to realize its full potential, precision agriculture requires a robust foundation, which often means a deep well of data points. That data is collected and measured by a wide variety of hardware and software solutions.

  Today, sensors are one of the most heavily used hardware solutions in agriculture – they are essential to gathering data to inform decision-making. These sensors are incredibly rugged and able to withstand many environmental factors such as high and low temperatures, extreme weather, chemical exposure, dirt, vibration, animals and much more.

  Also, the sensors used in most agriculture equipment are not only designed for wear and tear but in terms of equipment design, they are typically well-protected and hidden in hard-to-disturb places.

  Improved sensor technology ultimately leads to better, more precise results for vineyard owners, such as better equipment positioning and monitoring, better moisture and sunlight detection and much more.

Reaping the Benefits

  The search for vineyard efficiency has produced a wide range of systems and techniques in recent years. Sensor technology can help wineries function effectively and efficiently by providing real-time data on vineyard conditions.

sensor at use in vineyard

  Sensors are among the most heavily used hardware solutions in ag settings – they are essential to gathering data to inform decision-making.

Some of the most commonly used applications of sensor technology in vineyards include:

•   Soil moisture: Measures water levels to prevent overwatering/underwatering.

•   Temperature and humidity: Providing climate information to optimize growing conditions.

•   Sunlight exposure: Measuring sunlight vines receive to optimize grape maturation.

•   Spectral imaging: Captures and analyzes reflected light from plants to provide information about their health.

•   Early warning systems: Monitor wind speed, leaf wetness and rainfall to sense and communicate disease risk.

  As technology continues to scale and evolve toward precision and adaptability, vineyard owners will reap the rewards, which range from increased land productivity to less reliance on manual labor and staffing, as well as positive environmental impacts from using fewer inputs.

The Future of AgTech

  The modern viticulture industry is tasked with creating more wine while reducing environmental impacts and navigating labor shortages. Advanced technology solutions can help vineyard owners and staff automate the critical processes crucial to reaching the scalability needed to satisfy demand.

  Of course, implementing new technology can come with its own set of challenges. To enable mass adoption of precision agriculture, technology providers must be prepared to scale solutions easily and cost-effectively across the globe, and connectivity solutions must continue to improve in order to enable real-time processing and analysis. 

  Many different precision agriculture and viticulture technologies have applications in the vineyard, such as global positioning systems (GPS), robotics, airborne remote sensing, geographic information systems (GIS), digital elevation models (DEM), high-resolution soil surveys, wireless sensor networks and more.

  In an industry already facing financial pressures for an inconsistent and costly labor supply, the good news is many entry-level sensors and networking equipment costs are relatively low compared to what was available only a few years ago. The financial barrier to entry is also helped by eliminating or reducing costs in many areas, such as purchasing fewer chemicals and avoiding waste, hiring less human labor and identifying specific plants or sections that need the most attention, saving time and effort.

  As more viticulture operations embrace technology and automation, companies like DigiKey are making solutions more accessible to engineers who are building the next generation of AgTech.

From generation to generation, technology will continue to evolve rapidly and adapt to current and future needs, improving the adoption rate of precision agriculture. Vineyard owners and grape growers alike need to adopt technology to remain competitive, especially when the technology can help solve and streamline a myriad of elements of the process.

  By focusing on farming insights and automation at the plant level, the world can not only farm better, but farm different.

  Josh Mickolio is the supplier business development manager of wireless and IoT at DigiKey. DigiKey is both the leader and continuous innovator in the high service distribution of electronic components and automation products worldwide, providing more than 15.3 million components from over 2,900 quality name-brand manufacturers. Check out Season 3 of DigiKey’s “Farm Different” video series, which highlights the future of farming and the innovations that power the next generation of global food production.

Bottling Day Tips and Tricks

Cyndi
two people talking in front of wine bottles on a bottling conveyor

By: Tom Payette – Winemaking Consultant

This article is a sequel to the previous article on bottling.  It applies not only to mobile bottling but also any bottling line quality control a winemaker may be a part of.  Each line has its own Critical Control points so use this article as a foundation to build on for your specific bottling operation/mobile bottler.  Winemakers – it’s time to be on your toes!

  Make sure your wines are ready, free sulfur dioxide adjusted and at the appropriate temperature for the bottling.  Makes sure the dissolved gases such as oxygen and carbon dioxide are where you want them and measured if possible.  The wine should be filtered to the appropriate micron rating prior to the days bottling and mixed well to provide uniformity in each bottle.  If chasing the wine surface, in the tank, downward with a nitrogen blanketing gas – be sure to have that system in place.

Start of sanitation:  Be sure the sanitation proce

dure of the bottling line is being done to satisfaction.  If steaming be sure to reference in a previous article on that subject and if performing a pressure hold test on the cartridge filter after steaming be sure to consult that article for details.  Be a team player to achieve the best possible sterile conditions prior to having the wine enter the bottling line.  Make sure corker jaws are clean and any areas that may affect the wines long term bottle integrity are well within range.

Inspect raw materials/dry goods:  The best time to look over the dry materials and packaging goods is upon receipt at the winery – allowing time for any potential corrections with suppliers.  Place capsules on bottles, inspect labels for proper size and printing, assemble packaging in full bottles and review the actual shelf presence.  During bottling be sure to monitor, by way of random sampling, the actual process before or while bottles are going through the line.  Empower case packers to keep a keen eye, also, as quality control agents, before they place finished bottles in the case box.

Bottles:  Be sure to inspect bottles during the bottling process.  Feel them – are they out of round?  Are the necks straight?  Feel inside for the proper irregularity inside the bottle assisting to keep the cork in (discard these bottles after doing so for sanitation reasons).  Check with calipers if any irregularities are found.

Corks, closure:  Inspect these items and test for any taints or manufacturing irregularities.  Soak corks and allow for taint issues to form or have them tested for TCA detection well ahead of bottling.  During the bottling process look for creases caused by corker jaws or disks (looking like small watermelon slices) coming off and identify why they are happening.  Lay bottles on their side and inspect for leaks.  Use a vacuum needle gauge to monitor any irregular pressures/vacuum inside the bottles randomly (remove cork after doing so and place back to be recorked).   [For a free parts list to build an inexpensive vacuum needle gauge to be used on cork closures please contact my office at 540-672-0387 and supply your postal mailing address.]   Identify your ranges of tolerance here if any.   Screw caps and their bottles have exact tolerances so make sure these two pieces of the package come together properly.

Oxygen:  Use an oxygen meter at critical control points to understand each process, its oxygen uptake and understand its ramifications.  The first place to sample for oxygen is in the tank.  The second place to check is after filling in a bottle and the third place is after closure of the bottle with a cork, screw cap or other closure.  Purchase an oxygen meter and use it once you understand how to use it and what the corrections are.

Labels:  Be sure to inspect how the labels are being applied and what the end results are.  Are the labels correct for the product?  What is their height position?  Is the back label appropriate?  Is the spacing between the two where desired?  Is the adhesion taking place?  Are the bottles sweating?  Are they level?  ( A great way to check this on the line is to find a level spot and compare two bottles against each other by spinning one bottle next to the other – is there a rise or fall in where the two labels meet?).

Conformity:  If the line used has many “heads” or stations be sure to compare the products from each station.  Are conditions equal and appropriate coming from each head?  If possible identify the problematic area and help the technician zero in on the problem.

Listen (One of the absolute best tools, even with ear protection):  Listen and use your ears while monitoring the line and while wearing ear protection.  You will be amazed at how many issues/problems you will notice simply by listening and hearing machines malfunction.  Examples of this could be the corker, vacuum assist to the corker, missed capsule application, bearings “singing” on foil spinners and other motors.  You will hear labeler mishaps.  Many air functions, solenoids and motor noises can be your first clue as to what machine to scrutinize and when.  Find the rhythms of your individual line and look for miss beats or out of ordinary sounds.

Smells:  Another area to be alert is our refined winemaker noses!  We seem especially adapted to smelling motors over heating, belts in distress, bottles that may have a moldy smell and corks with off odors.  Often wine that may be leaking at the bottling line can be detected by smell also but this can be less common.

Feel:  Another area I have found helpful is feel.  Feel machines as they are running properly.  Get to know their feel.  If machines are suspect of acting up – please your hand on the machine to see if the feel is the same as you recalled.  This can also be true of the track and actual floor of the bottling room.  Don’t overlook this obvious sense.

Sight:  Be sure, when the machines are running properly, to open the covers and to watch any mechanical cams, switches, chains, belts and learn what activates them and when.  Some people actually take movies/videos of the underneath of the machine so they can compare.  Be sure to keep your hands out of the machinery.  Once you have seen the machine and how it properly runs you will be better at diagnosing problems if and when they do occur.  Do where safety goggles when near the bottling line.

Manuals:  When possible have manuals on hand and ready for review.  Have a general knowledge of each machine and how to adjust it. 

Measure:  Measure anything that needs confirming to be affective.  This may include filler spout temperatures during steaming, membrane integrity after steaming, fill height level and consistency, cork insertion or screw cap tolerances, vacuum/pressure underneath the closure (see above under corks), temp of the wine, dissolved oxygen, label placement, capsule application and  the list goes on. 

Keep records:  Certainly everyday at the bottling line is a different one.  Some of this is inconsistent dry goods or packaging goods, sometimes it is the machines and other times it is the wine.  When encountering problems try and keep records as to what the issue was and suspected cause to be better prepared for future bottlings.  Fix the problems when the line is dormant or out of use if possible.

Supplier specs. – Start focusing on what is tolerable in your winery bottling process and start placing orders with suppliers detailing those specifications.   During these challenging economic times we are seeing many packaging material issues that have been frustrating to winery owners and bottling teams alike. Anything not conforming to the winery specifications supplied may give an opening for issues to be resolved favorably for the winery. 

Summary:  Be on your guard and take charge.  This is the last step while capturing, in bottle, all of your long hard work from the months and years previous.  The hard grape growing seasons forward.  This is a time to be extra critical of how the process is being done and to make sure your product has the best possible chance to be as superior and excellent as you had made it.  Speak up when appropriate, speak to operators and know when to have the line stop if the integrity of your wine is being compromised.  Make sure, also, to deliver to the bottling line a wine that is ready for bottling.  Be proactive, timely and keep a level head all while being extremely attentive that day.  Success!

Vine to Value: Making a Grand Exit from Your Winery

Cyndi
ramp with the word Exit

By: Carlos Lowenberg, Lowenberg Group

For winery owners, the journey from vine to vintage is a labor of love, patience, and meticulous attention to every detail. It’s easy to get swept up in the business, but one important aspect that often gets overlooked is creating an exit plan. An exit strategy for a winery business is not just about the financials – it’s about preserving your life’s work and ensuring the future you’ve crafted can thrive without you.

  As a longtime business transition advisor, I understand the unique challenges and opportunities winery owners face. Timing is everything when it comes to viniculture Vintners must contend with weather, soil conditions, and market fluctuations that can make long-term planning difficult. Additionally, wine as a product has complexities – from branding and customer loyalty to aging requirements that span years, if not decades.

  I advise clients in this position to start their exit roadmap much earlier than one would expect. A solid five-10-year runway allows you to properly stage your exit while still being hands-on to groom successors and prime your business for an optimal transition.

Key Value Drivers

  For wineries, some of the most important value drivers that will attract buyers are the strength of your brand reputation, track record of wine quality and ratings, and sustainable environmental practices. Having a seasoned, proven management team in place is also crucial, as is cementing sources of recurring revenue like wine club memberships and contracted distribution pipelines.

  Transparency into your financials, operations, and sales will be non-negotiable for buyers assessing your winery’s value. Can you easily quantify production costs and pricing models? How efficient and modern are your facilities and equipment? Do you have rigorous quality control, food safety compliance, and chain of custody processes? The more you can showcase operational maturity and documented business fundamentals, the greater your winery’s valuation.

Taking Your Time

  Maximizing value in your winery prior to an exit is all about setting the stage for an optimal transition window. Buyers will scrutinize everything from your production capacity and equipment to your vineyard management practices. Are your facilities modernized and prepared to scale up seamlessly under new ownership? How automated are your processes? Do you have a proven supply chain and quality control programs to ensure consistency from year to year?

  The more you can demonstrate your winery as a turnkey business with documented, replicable processes and identified areas for growth and efficiency gains, the more it elevates your worth. Mature wineries that have successfully built their brand name and market presence while continuing to innovate will clearly be more coveted acquisition targets.

  I cannot overstate the importance of cultivating a stellar team to drive the value of your business.  Their passion and institutional knowledge surrounding your winemaking approach are invaluable. Retaining and incentivizing this core team through strategies like equity incentives or tailored succession plans prevents brain drain and keeps your proven playbook for distinctive, high-quality wines intact long after you exit.

  The patience and planning to strategically invest in the right areas over a multi-year period to strengthen your winery and brand value reap dividends in the form of top-dollar exit valuation and a smoother transition to the next regime.

Tax Advantages Through Planning

  I also can’t stress enough the importance of getting a head start on tax planning for your winery exit. With an issue as multifaceted as providing for your family and employees and mitigating your tax burden, a well-designed, long-term tax strategy is indispensable.

  Strategies like setting up trusts, gifting private stock to children and grandchildren, and finding tax-advantaged ways to transfer assets out of your estate can provide major savings over time. Charitable giving vehicles like donor-advised funds are another way to reduce your taxable income while benefiting causes important to you and your local community.

  If you plan to keep your winery operation within the family, exploring options like an intentionally defective grantor trust can allow you to freeze the value of assets transferred while removing them from your estate long before your exit. Life insurance policies can also be used to offset any inequitable distributions if not all children will end up involved. The possibilities are endless when you start planning ahead.

Building the Ultimate Advisory Team

  Given the intricate interplay of real estate, agriculture, taxation, distribution, and federal and state beverage regulations, you’ll want a team of experts guiding your vineyard legacy’s transition out of the gates. Assembling this team should begin two to three years before your target exit date. Vital team members include:

●    A tax attorney and CPA focused on estate, gift, and generational wealth transfers.

●    A vineyard operations consultant and winemaker with industry expertise to accurately quantify your assets, evaluate management, and represent fair market value.

●    A mergers & acquisitions advisor or investment banker to identify suitable buyers and negotiate favorable terms (this could also be completed in-house with the right staff).

●    A wealth manager to protect your personal assets throughout the transition.

●    Of course, at the core should be a seasoned business transition strategist who has helped other owners avoid pitfalls and exit successfully.

  This transition dream team will map out the unique considerations your winery needs like transferring real estate and land rights, assessing inventory and barreling assets, retaining key talent through earnouts or equity incentives, and account for legal distribution restrictions as you change ownership structures.

Leaving a Legacy

  There are few professional pursuits as spiritually rewarding as growing a winery business from the roots up. The wine flowing from your cellars is a vintage distillation of years of hard work, perseverance, and your vision brought to life. It’s only natural you’ll want that legacy preserved as you pour your last glass and hand over the reins.

  By being proactive and viewing your exit as the grand finale rather than an afterthought, you can dramatically increase the odds of a prosperous transition that provides for your family’s future while honoring the tradition and community you’ve established. Thoughtful planning and the right advisors are the keys to unlocking a fitting encore for your winemaking career.

  So let’s raise a glass to your next chapter, one that rewards the fruits of your labor while allowing your vineyards’ legacy to be grown and enjoyed for generations to come. Your journey from vine to value can have a storybook ending – if you start mapping that path today.

8 Proven Ways to Elevate Winery Revenue in a Changing Market

Cyndi
two people clinking their champagne glass

By: Jonathan Smalley, President and CEO of SmaK Plastics

The Times They Are A-Changin

According to CNN, global wine consumption has fallen about 6% between 2017 and 2022. Consumers have changed their drinking habits and inflation has eroded their disposable income.  That means nearly 1.9 billion fewer wine bottles were consumed last year than in 2017.

  Today, operating a successful winery requires more than just producing exceptional wines.

It demands a strategic approach to maximize operations space, production and labor, reduce overhead costs, and increase revenue and create growth.

•   The wine industry is evolving. Gen X-Z tastes are changing.

•   Wineries are at the intersection of artistry and business acumen.

•   Behind the scenes, winemakers and CFOs grapple with OpEx challenges.

•   At the same time, retail shelf space is getting more crowded – with flavored beverages.

  In this article, we will explore proven methods to increase winery revenue.

1.  Diversify Offerings to Attract a Broader Audience: An effective method to boost winery revenue is by diversifying product offerings to appeal to a wider customer base. While the core product remains wine, expanding into related areas such as events, food, and merchandise can significantly increase revenue streams.

     Silver Oak Cellars has successfully diversified its offerings. In addition to its acclaimed Cabernet Sauvignon, the winery hosts events like wine dinners and tastings. The winery’s online store also features branded merchandise, from glassware to clothing.

2.  Create a shelf space strategy – Evaluate and create modernized, distinctive labeling. Craft an eye-catching and distinctive packaging design for your Wine Club offers. Consider packaging that not only highlights your brand but also communicates the craft and quality of your wine.

     Create open communication with distributors and retailers about your differentiation and process. Collaborate on promotional events (where legal). Utilize data to ID regional preferences to tailor your product assortment. Consider P-O-S displays that showcase the craftsmanship behind your wines. Utilize shelf talkers and promotional signage to highlight unique tasting notes, food pairings, and any awards or accolades your wines have received        

3.  Expand Specific Production to Match Trends – Create craft beverages that meet emerging trends. Be a trendsetter. Consider new methods to expand your production to deliver new flavors that buyers want.

     Be aware: Buying used oak barrels used can sound affordable, but is risky. Used barrels can come with risk of bacterial contamination as well as a lower impartment of oak. And used tanks are not warranted by manufacturers.

4.  Implement Wine Club Memberships for Customer Loyalty – A new, modern wine club can create a loyal customer base, consistent revenue and a strong sense of community. Offer exclusive benefits such as early access to new releases, discounts on purchases, and members-only events.

     Ridge Vineyards is known for its exceptional Zinfandels and Cabernet Sauvignons. Ridge has a well-established wine club called the Monte Bello Collector Program. Members receive allocations of limited-production wines, invitations to member-only events, and access to library releases. This not only generates consistent revenue for the winery but also strengthens the connection between the brand and its customers.

5.  Enhance Online Presence and E-commerce – In the digital age, an online presence is crucial for wineries. Establishing a user-friendly website, utilizing social media, and implementing e-commerce capabilities can broaden a winery’s reach and drive sales directly to consumers. Invest in strong brand visibility and “edutainment.” Provide insight. Engage with your audience online and offline to create a community around your brand. A strong and recognizable brand can attract attention from retailers and consumers, and lead to increased shelf space.

     La Crema Winery has effectively expanded its online presence. The winery’s website offers a seamless e-commerce experience. La Crema actively also engages with its audience on social media platforms, and has created a virtual community around its brand.

6.  Optimize Production Space – Unleash the Cellar Potential: Say goodbye to wasted corners and hello to reimagined production. Evaluate every nook and cranny. Reorganize with precision. Utilize the space that is wasted on racking.

     Embrace flexible, movable vertical storage to increase capacity without sacrificing accessibility. Utilize stackable solutions to create skyward profits. Stackable fermentation, production, blending and aging solutions increase production, allow easy access, and deliver results. Easily blend without having to un-stack, un-rack and re-rack-and-stack barrels.

7.  Shorten the Distance and Vessel Use Between Processing Stages – Modernize your production Transfers. Reduce barrel transfer time with a streamlined, repurposed container layout. Redefine your processing flow to minimize transfer time, reduce labor, and eliminate spillage risks.

     Increase efficiency across all processes. Streamline labor-intensive tasks, from juice movement to cleaning, stacking, and maturation. Optimize productivity across your square footage. And vanquish the evaporation enemy.

8.  Embrace Modern Winemaking Techniques with Oxygen – Permeable Polyethylene Tanks:

  In recent years, wineries have increasingly turned to innovative winemaking equipment, such as poly, food-grade plastic tanks, to optimize production efficiency and cut costs. These tanks, made from high-quality polyethylene, present a viable alternative to traditional oak barrels.

  Oxygen-Permeable Polyethylene Tanks provide winemakers with a more cost-effective and sustainable solution. The use of plastic tanks aligns with sustainability goals. These vessels require less water and chemicals to clean, are lightweight and can be used for all winemaking processes, last more than 25 years, and reduce the demand for dwindling oak resources.

  Les Bourgeois Vineyards, situated in California, has successfully incorporated plastic tanks into its winemaking process. By investing in Oxygen-Permeable Polyethylene Tanks, the winery has reduced operational costs associated with barrel purchasing, maintenance and replacement. The polyethylene tanks allow Seghesio Vineyards to allocate resources to other aspects of production.

•    Poly tanks give winemakers scalability, and stackable use of production space.

•    Polyethylene vessels are sustainable. (Water and Labor Savings). These tanks can be utilized in all aspects of winemaking: production, fermentation, maturation and transport to bottling.

•    French oak barrels are produced at approximately two barrels per 100-year-old tree. Oak barrels must be sanitized using chemicals and large quantities of water. And they’re only good for 4-5 years.

•    Advanced, Oxygen-Permeable Polyethylene Tanks are long-lasting, controllable and breathe like a barrel.

•    Winemakers can easily and quickly expand capacity and space use. Polyethylene tanks are easy to move, clean and stack. And have low up-front capital cost.

Summary

   A combination of strategic planning, modern communication, customer engagement, adaptability to market trends, and new production techniques is required to grow winery revenue.

  Wineries can both build strong relationships with their customer base, and create sustainable higher margin revenue by diversifying offerings. At the same time, wineries must work strategically to create additional market pull, and shelf space. This can be created via consistent (short and unique) communication, and community building.

  Wineries must look forward to the future buyer profile and engage prospect/buyers via modernized wine clubs, enhanced online presence, and content.

  Wine owners and financial managers must also look at methods to reduce OpEx costs, streamline and increase production efficiency, sustainability and margins and revenue.

  These methods can help wineries steadily grow in a competitive market.

Author’s Bio

Jonathan Smalley, President and CEO of SmaK Plastics.  An expert in the production, fermentation, aging and transport of craft beverage and food production solutions. Over the last 20 years, he successfully directed the engineering and development of successful products for more than 4,000 global wineries, cideries and food processors.

The Importance of Detecting Disease Before Planting

Cyndi
rows and rows of grapevines

By:  Judit Monis, Ph.D. – Vineyard and Plant Health Consultant

The summer and fall are the seasons for vineyard managers and winemakers to start to plan for new vineyard development.  Since late summer to fall is the busiest with harvest, why not get a head start?  Furthermore, the best time to scout the vineyard and observe symptoms associated with diseases is in the summer and fall seasons.

  My philosophy is if you wish to develop a healthy vineyard you need to plan ahead.  When planting a new vineyard, unless you are willing to take whatever is left at the nursery (not recommended), you will need to place your order with a nursery at least one year ahead of the planting season.    With so many different diseases that are not regulated by certification programs, I recommend you hire a knowledgeable plant pathologist (consult with me!) to help you determine the best time to perform vineyard block and vine inspections as well and how and when to collect plant and soil samples for pathogen detection.

Diseases Originate in the Vineyard

  Growers must be aware that many grapevine diseases can generate in the vineyard.  If a grower is replacing a vineyard, leaving the land fallow (with no vines) for a long period (2-3 years) may have advantages.  If the vines removed were infected with leafroll (GLRaVs) or red blotch (GRBV), it will be important to take some precautions. Some species of leafroll associated viruses (GLRaVs) are transmitted by mealybugs and GRBV is transmitted by the three-cornered alfalfa hopper. It is important to be careful when removing vines, as portions of infected roots can remain in the ground and be a source of reinfection.  When mealybugs are present in the vineyard block, these will be able to transmit the viruses to the new vineyard.   In this situation, it would be impossible to determine if the symptoms in the vineyard are due to a newly vineyard planted with infected material or if it became infected by mealybugs that remained in the vineyard unless there is a priori testing data.   I am always asked to “play detective” but without prior knowledge (i.e., testing prior block or the incoming plantings), it is a difficult proposal.

  Agrobacterium vitis (the crown gall causal agent) and some fungi are soil borne pathogens and can be propagated in nursery material as well as field selections or be present in the soil prior to planting.   Agrobacterium vitis and a diverse group of fungal pathogens are present and sometimes latent (no symptoms are visible) in vineyards.  For example, the crown gall disease agent can be present in certified planting material without showing symptoms until a stress factor (physical or freeze  damage) occurs. The stress caused by the grafting process is enough to induce typical galling if pathogenic strains of Agrobacterium vitis  are harboring withing the sourced vines.  Grafted vines commonly display excess callus formation, enlarged graft unions, and galls.  Some symptoms are typical of crown gall disease while others could be difficult to diagnose visually.   To be safe this type of planting material should be analyzed at a laboratory as it may not be easy to distinguish between bacterial galling and callusing during the grafting process (the nursery will probably claim that what you are seeing is callus but this is not always the case). 

Traditional Diagnostic Methods May Fail to Detect Certain Pathogens

  Testing the vines and soil before planting will give an indication of the type of fungal and bacterial organisms present.  Depending on the method used for testing, information of beneficial microorganisms and nematodes present in the vineyard soil can be obtained.

  Traditional methods such as microbiological culture for the detection of Agrobacterium and fungal pathogens may fail to detect these pathogens in the laboratory.   While microbiological culture in plates with identification using microscope and/or further biochemical and molecular characterization are still being used, there are some important drawbacks to these methods. The plating of microbes is prone to competition between different fungal and bacterial species.   Generally, the microorganism that grows faster will be identified but may not necessarily be the cause of symptoms of disease.  Even when a more specific method is used for identification (i.e., polymerase chain reaction), the method may not be specific enough to characterize the fungi and bacteria.  For example, there are many Agrobacterium vitis stains that are non-pathogenic and do not cause crown gall disease. 

Next Generation Sequencing as a Virus Discovery Tool

  The next generation sequencing (NGS) technique also known as high throughput sequencing (HTS) or deep sequencing is able to determine the complete sequence of the genetic material present in a vine.  The data obtained is analyzed with software that is able to compare sequences available in a database and provides a list of the bacteria, fungi, or viruses present in a given sample.  The method can provide relative quantitative data (copy number) of the presence of each organism found.

  Initially, the NGS method was used as a tool to discover new plant viruses.  In 2011, NGS lead to the discovery of the first DNA virus to infect grapevines, Grapevine vein clearing virus a Badnavirus associated with severe vein-clearing and vine decline syndrome in Missouri.  Subsequently, NGS has allowed the discovery of other DNA viruses: such as GRBV, Grapevine Geminivirus A, Wild Vitis virus 1, and many grapevine RNA inhabiting viruses (e.g., Grapevine virus E, F,G, H, I, J, K, L, M, N, etc.).  The application of NGS will continue to allow for the discovery of new viruses.  Clearly, the biological capabilities of the newly discovered viruses must be studied to determine if they pose a threat to vineyard health.

Next Generation Sequencing as a Diagnostic Tool

  Recently at the 20th ICVG (International Council for the Study of Grapevine Viruses and Virus-Like Diseases) held last year in Thessaloniki, experts discussed the application of NGS (aka HTS) technology for diagnostic purposes.  Comparative studies have allowed replacing the woody index technique with NGS in quarantine programs.  For example, the NGS technology is already being applied for the verification of clean planting stock as well as exclusion of infected material in new variety introductions quarantine and certification programs in Italy and USA. 

  Commercial laboratories offer the testing of soil and plant tissue using NGS technology to detect bacterial and fungal pathogens in soil,  planting stock material and established vineyards. 

  The NGS technology has become a powerful diagnostic tool but requires technical knowledge and expertise to interpret the results. Because of the complexity of the results, expertise is needed to determine which of the microorganisms present in the tested material might be damaging to the vineyard health.  I have experienced receiving loads of data (enormous lists of fungi and bacteria) to sort out and determine the relevance of the findings.  The information has allowed me to help clients make informed propagation, planting, and managing decisions.

  Future research will allow us to answer what is a pathogen copy number required to initiate infection and cause disease.  In my opinion, grapevine growers and winemakers will benefit when the NGS technology is widely applied to grapevine testing.  The application of new technologies will increase the health of planting material and subsequently decrease of presence of harmful pathogens in planted vineyards and ultimately increase wine quality.  I envision that in the near future the NGS technology will allow certification programs world-wide to exclude pathogenic bacterial, fungal, and viral species from their foundation blocks. 

  Judit Monis, Ph.D. provides specialized services to help growers, vineyard managers, and nursery personnel avoid the propagation and transmission of diseases caused by bacteria, fungi, and viruses in their vineyard blocks.   Judit (based in California) is also fluent in Spanish and understands some Italian is available to consult in all wine grape growing regions of the world.  For more information or to request a consulting session at your vineyard please contact juditmonis@yahoo.com or visit www.juditmonis.com

The Stars Are the Limit

Cyndi

Trends Shaping Tourist Season 2024

By: Susan DeMatei, Founder of WineGlass Marketing

Can you believe it’s May? Soon rain will abate, vines will reach for the sky, and summer will be here before we know it along with, hopefully, tourists. To prepared for our always-diligent attempt at educated counsel to our clients, we’ve been reading up on all the travel trends for 2024. Will the political climate once again hijack all of America’s attention and make people wary of venturing out? Or will it be more likely to scare us to other countries for a respite abroad? If tasting room traffic is down this year as it was last year, it is even more important to know what consumers are looking for in the hopes of developing programs consumers want. The smart winery will be continually testing different experiences this year to try and attract the right customer to their brand.

Consumers Will Be Vacationing

  Forbes recently surveyed 1,000 Americans asking them about their travel plans this year and it seems wanderlust continues unabated into 2024, with Americans poised to jet set, road trip, and beach bum their way through the year. 52% of respondents bravely committed to maintaining the same travel tempo as the previous year, while an audacious 40% are revving their engines for even more escapades.

  Seems like the young’uns are leading the charge, as always. Gen Z and Millennials are showing off their travel prowess, with 56% and 49% respectively gunning for more stamps in their passports. Meanwhile, Gen X and Baby Boomers are chilling like fine wine, content to keep their travel habits on cruise control.

  What’s on the itinerary, you ask? Well, it’s a classic lineup: family visits, beach frolics, and the timeless allure of the open road. These perennial favorites are still top contenders for 2024, proving that some things never go out of style.

chart showing types of trips americans plan to take in 2024

  It’s clear that the travel bug has an expensive taste and those that are planning to travel realize it will cost them. 39% of respondents are planning to beef up their travel budgets and another 35% will maintain their spending power. How much, you ask? Well, 72% of respondents say they are ready to drop upwards of $2,000 on their escapades and nearly half are primed to dish out a minimum of $4,000 throughout the year. So price doesn’t appear to be a barrier for a good time. ( Who needs to worry about inflation when there are adventures to be had?)

  When faced with the question of how they might be willing to cut back, most opted for a “quality over quantity” approach reporting they’d rather take fewer trips or shorten the duration over cutting back on luxury or experiences.

Destination Trends

  As we review research on 2024 travel, it’s clear that we’re not just chasing destinations—we’re chasing experiences. Whether it’s savoring the silence of a remote getaway or indulging in culinary delights, we’re in pursuit of moments that linger long after the suitcase is unpacked. What follow are seven trends we feel dovetail nicely into Wine Country.

travel changes americans will make due to continued inflation

Home Swapping: A New Twist on Hospitality

  In a world where the line between work and play blurs, travelers are seeking longer stays abroad without the hefty price tag. Enter home swapping, a trend gaining momentum as remote work becomes the norm. Platforms like Twin City and Kindred offer innovative solutions, connecting travelers with like-minded individuals for mutual home exchanges. Gen Z, ever the trendsetters, are spearheading this movement on social media platforms like TikTok, using hashtags like #houseswap and #homeswap to showcase their adventures.

  WGM Ideas: What are you doing to partner with AirB2B, VRBO, Twin City and Kindred in your area? Are there “honorary” local programs you can try to these transient “residents”? How can you bring your wine into their new “home”?

Peak Season Takes a Back Seat

  The traditional peak season for travel is experiencing a shift, with travelers increasingly opting for shoulder season adventures. Luxury travel specialists report a surge in bookings for off-peak periods, citing factors like economic concerns and a desire for authentic, less crowded experiences. With flexible working arrangements on the rise, travelers are seizing the opportunity to explore popular destinations during quieter times, avoiding the crowds and high prices associated with peak season.

  WGM Ideas: Can we take a page from hotels and offer special experiences mid-week or in shoulder or hot months? Research tells us when we have the time to spend with guests, their Average Order Value goes up, so what does time allow you to offer in these slower times to make their experience extra-special and create more memories and sales?

Private Group Travel: The Ultimate Bonding Experience

  The desire to share travel experiences with friends and family is driving the rise of private group travel. From multi-generational family trips to reunions with lifelong friends, travelers are seeking meaningful connections through shared adventures. Companies like Black Tomato are catering to this demand with tailored itineraries designed to create lasting memories. Whether it’s a backcountry feast in the Grand Canyon or a rafting expedition in Peru, these experiences offer a unique way to bond with loved ones while exploring the world.

  WGM Ideas: Some of you won’t like this, but the question of what to do with kids will move from an infrequent grumble to a persistent roar as Millennials move into their 40s and want to vacation as their whole selves – teenagers, dogs and all. Even if kids aren’t an issues, large groups can sometimes become boisterous and overwhelm the ambiance. What can you do to accommodate lively group visits while keeping a luxury solemn experience for others? Can you open up one patio to only one or the other? Can you offer different time slots? The time is here where simple saying “no” to groups will mark you as inhospitable and in the minority. Best to plan ahead now and be prepared as this trend grows.

Skip-Gen Travel: Bridging Generational Divides

  Skip-gen travel, where grandparents vacation with their grandchildren, is on the rise. As families seek to strengthen bonds across generations, travel agencies are creating specialized itineraries to cater to this demand. From safari adventures to cultural immersions, these trips offer opportunities for meaningful connections and shared experiences. With an increasing number of grandparents eager to explore the world with their grandchildren, skip-gen travel is poised to become a lasting trend in the travel industry.

  WGM Ideas:  So, a 10-year-old, a 34-year-old and a 66-year-old walk into a bar…  It’s not a joke. If you’ve been smart you’ve already started to think about bifurcating your experiences and marketing to appeal to younger and older audiences so this trend should fit right into your plans. If you haven’t been smart, now is the time to rectify that. Before tourist season gets into full swing, we highly recommend creating different experiences targeted to seniors and … can we say juniors? Anyway, you get the point. Think about the comfort/height of seats down to different interest levels and non-alcoholic options. The more prepared you are the happier the guests and the more the sales.

Silent Travel: Finding Serenity in Silence

  In a world filled with noise and distraction, silent travel offers a sanctuary for weary souls. From silent meditation retreats to secluded nature resorts, travelers are seeking opportunities to disconnect and recharge. As awareness of the benefits of silence grows, so too does the demand for silent travel experiences. Whether it’s trekking the Japanese Kumano Kodo trail or exploring Finland’s Arctic landscape, these journeys offer a chance to find peace amidst the chaos of modern life.

  WGM Ideas: We know you’re going to get frustrated and say we just told you to allow kids to crawl all over your tasting room but curb the eye roll for a moment. We bet there is somewhere on your property to offer some serenity. Is there a corner, or bench or tree or trail through the vineyards you can clear off and feature as a private quiet area? Could you offer a different kind of experience that is the opposite of a guided tasting? It would be interesting to test to see if people just want to be alone. What about recording a short but insightful self-guided tour? Or something about the rabbits and owl boxes and vines they can scan with a QR code on an expertly placed sign? Just brainstorming but it’s interesting to think about and wouldn’t be hard to try.

Back-of-House Tours: A Glimpse Behind the Curtain

  As travelers become more conscious of their environmental footprint, they’re seeking experiences that prioritize sustainability and community engagement. Back-of-house tours offer a unique opportunity to see firsthand the efforts hotels are making to reduce their impact on the environment. From community outreach programs to eco-friendly initiatives, these tours provide insights into the social and environmental responsibility of hospitality businesses.

  WGM Ideas: The idea of “winery tour + sustainability discussion” intrigued us. For those of you who have gardens or do crazy magical things with cow horns – people will want a tour on that! THAT is different and something to build on. If you’re not focused quite so much about the cycles of the moon, you can still talk about running an agro-tourism business and how you fit into your particular ecosystem; what accommodations you make for wild animals, how you use sheep, or what you do to manage cover crop. Anything in the realm of working in harmony with mother earth is a trend right now that any winery can lean into.

Wild Feasting: Dining in Nature’s Embrace

  There’s something inherently special about dining al fresco, surrounded by nature’s beauty. Wild feasting takes this concept to the next level, offering curated culinary experiences in natural settings. From foraged ingredients to open-fire cooking, these experiences celebrate the connection between food and the great outdoors. As urbanites seek opportunities to reconnect with nature, wild feasting offers a chance to slow down, savor the moment, and truly appreciate the bounty of the earth.

  WGM Idea: Try to get as close to origin as possible. For those of you who have food programs, ditch the pre-packaged store-bought cheese and partner with a cheese monger.  Take a stab at drying your own jerky, salting your own nuts, or featuring local honey. Make the connections with food purveyors and see where the partnerships take you. Your customers will, literally, eat it up.

Astronomy Tourism: Seeking Solace in the Stars

  As society yearns for genuine connections with the natural world, gazing at the stars offers a sense of wonder and perspective unlike any other experience. Astronomy tourism, the practice of traveling to remote locations to observe celestial phenomena, is on the rise. Wellness-focused hotels and resorts are embracing astronomy tourism, providing guests with opportunities to marvel at the cosmos.

  Which is good because 2024 is shaping up to be an astronomical extravaganza, with celestial events galore. From total solar eclipses to dazzling meteor showers, the year promises unforgettable sights for stargazers. Scientists are even predicting the best displays of the Northern Lights in two decades, as we approach the next solar maximum.

  WGM Ideas: It would have been great if you were in the eclipse path this April, but since we can’t count on those every day, what can you do at night? Consider a club event after dinner with smores and a fire pit and guest astrologer. The goal is to get out of the cities and gain some perspective – and wine country fits the bill.

  Google searches will yield you a multitude of other tourism trends, but these were the ones we felt leaned into the winery vibe. We hope there are couple that intrigue to you brainstorm some options to try at your winery.

  And, best of luck this year in providing those Instagram-able moment because one thing is for certain; whether it’s savoring the silence of a remote getaway or indulging in wild delights, it’s clear we’re in pursuit of memories of moments that linger long after the suitcase is unpacked.

  Susan DeMatei founded WineGlass Marketing; the largest full-service, award-winning marketing firm focused on the wine industry. She is a certified Sommelier and Specialist in Wine, with degrees in Viticulture and Communications, an instructor at Napa Valley Community College, and is currently collaborating on two textbooks. Now in its 12th year, her agency offers domestic and international wineries assistance with all areas of strategy and execution. 

WineGlass Marketing is located in Napa, California, and can be reached at 707-927-3334 or wineglassmarketing.com

CBMA: A Short Guide to the Rules of the Road

Cyndi

By: Brad Berkman and Louis J. Terminello, Greenspoon Marder

As is said, the only thing certain is death and taxes. As it applies to beverage alcohol, the tax at issue addressed in this article is an excise tax which is based on volume and alcohol-proof gallons. There are two levels of excise taxes collected for alcoholic beverages: one at the state and the other at the federal level. As the reader likely knows, state excise tax, in most instances, is paid by the distributor. This article will examine federal alcohol beverage excise tax rates established by the U.S. Internal Revenue Code and the changes to these rates under the Craft Beverage Modernization Act (the “CBMA”).

  First, a little history, the CBMA was initially meant to be a temporary measure, however, Congress, in 2020 made the CBMA a permanent law and transferred the administration of the CBMA to the Alcohol Tax and Trade Bureau (TTB) on December 31, 2022. As virtually all industry members know, TTB is tasked with administering excise tax collections for domestic and foreign producers of alcoholic beverages, among many other things. In 2017, as part of the Tax Cuts and Jobs Act, the CBMA came into effect reducing excise taxes imposed on wine, beer, and spirits at certain volume levels, produced in the U.S. and those items produced abroad and imported into the U.S. 

  At the introduction of the CBMA, TTB was tasked with administering the domestic component of the CBMA, (that is for wine, beer and spirits produced in the U.S.), and U.S. Customs and Border Protection, (CBP), was responsible for the administration and collection of taxes for imported alcoholic beverages (as they had always done for imported alcohol). Excise tax for imports was due at the time of entry of the product into the U.S. stream of commerce, (once it cleared U.S. customs). This required thorough and accurate reporting by importers and/or their customs brokers at that time to CBP. Incorrect or incomplete reporting to CPB led to the loss of importer revenue for many wine industry members. CPB reporting requirements were, and arguably still are an arcane process.

  Under the CBMA, importers are still required to pay excise tax to CBP upon entry of the product but the administration of the CBMA for importers is now carried out by TTB. TTB has created a reasonably friendly system or portal where licensed importers can register and file their claims to receive the reduced tax benefit.

  The process requires that the foreign producer must first register with TTB, using the portal at myttb.com, and disclose certain basic information such as ownership information, email address and phone number and key contact information including key personnel. After registering, the foreign producer, through the online system, may then assign all or a portion of available CBMA credits to an appointed importer. It is worth noting here that foreign producers are allocated the same tax credit benefits as U.S. manufacturers of beverage alcohol.

  After supplying the importer information (using the importer TTB issued Basic Permit number), the foreign producer must identify the commodity (wine, beer and/or spirits), the tax rate or credit, the quantities of proof gallons or beer barrels and the tax quantities being assigned to the specific importer. Foreign producers can assign all of their credits to one importer or allocate in any way they choose to their various importers, should they have more than one.

  As a side note, it is strongly recommended that the allocation of tax credits is addressed in the negotiating process between the importer and foreign supplier and memorialized in any import agreement that may come into being between the parties. Obviously, this will help avoid future confusion and potential strains on the business relationship.

  Importers are also required to register on my.ttb.com on the importer interface and submit their refund claims electronically, which they may be eligible for as a result of the reduced rate. All that said, below is a quick and dirty reference guide for importers to refer to when navigating the CBMA process, which will assist both the foreign supplier and the importer.

For the Foreign Producer

•   Foreign producers must assign tax benefits to the US importer for importer to be eligible for the benefit.

•   Foreign producers may assign all or a limited tax benefit based on commodity type.

•   Foreign producers must first register with TTB using the link: ohttps://my.ttb.gov/.    

•   Producer will receive a foreign producer ID.

•   After the producer receives the ID, they will be able to assign the benefit to the importer on the on-line portal with TTB.

•   The foreign producer will need to provide TTB with the following information:

            o Calander year for which the benefit is being assigned.

            o The importer to whom it is being assigned using the importers TTB permit number.

            o Commodity type (wine, beer, spirits).

            o The reduced tax rate being assigned.

            o Total proof gallons that the benefit is being assigned to.

 The Importer

•   Importers pay full tax rate to Customs and Border Protection (CPB) at the time of importation.

•   To use the CBMA reduced rate, the importer must:

            o File a refund claim (online) with TTB at the close of each calendar quarter covering the entries made in that quarter.

•   At the time of entry (likely using your customs broker), importer must submit in their customs entry filings, the identity of the products that will be subject to the claim which includes:

            o Commodity type.

            o TTB Foreign Producer ID

            o The rate or credit assigned to the

             imported quantity.

            o The above information is submitted on CBP ACE system.

            **The authors advise trying to use a customs broker that is familiar with the above process.

            o Importer or its broker must file the TTB “Message Set” electronically in the ACE system.

•   Once again, the importer files its claim with TTB on a quarterly basis and once processed, TTB will pay the difference between the tax paid at entry and the credits assigned by the foreign producer.

  The CBMA offers an opportunity for importers to take advantage of reduced tax rates under the CBMA. Navigating the process is challenging and will greatly assist importers to understand the reporting processes up front so as not to leave valuable tax dollars on the table.

In Season Nutrient Management

Cyndi
photo of soil beneath grapevines

By: Kirk Williams, Lecturer-Texas Tech University

Nutrient management is a critical practice to have a healthy and productive vineyard.  Nutrition management in grapevines is a long-term process where nutrients can be added over time and the effects of these additions monitored over time as well.   Grapevines do not require large amounts of nutrients and the nutrients can be added in response to needs identified by soil and tissue samples

  While soil samples can give us great insight into the soil at a vineyard site they do have limitations in established vineyards.  Grapevines have a deep and extensive root system that can exist at deeper depths than common soil testing equipment can collect from.  Also, soil tests indicate relative availability and this level is not always reflected in nutrient status of the grapevine.  Soil testing in vineyards should still be done in established vineyards but a sample every three to five years is adequate to understand what is happening in your vineyard soil. 

  In season nutrient management begins with assessing the nutritional status of the grapevine.  The most common way of evaluating the current nutritional status of grapevines is through tissue analysis.  Tissue samples can be taken at bloom time or at veraision.  Sampling could also occur at both bloom time and veraision which can help you assess your in season nutrient management program.   Areas where observable problems exist should be sampled separately from areas where growth is normal.

  Tissue samples have historically been petioles but recently whole leaf samples have been utilized.   Collecting a good representative sample is critical to getting accurate results.  If you are collecting petioles, you will need 50 to 100 petioles from each block. If you are collecting leaves you will need 25 leaves per acre up to a maximum of 300 leaves per block.  Many laboratories will wash tissue samples but that will require quick shipping. 

  So, it may make sense to wash your own samples.  A few drops of phosphate free liquid detergent can be added to a basin with distilled water.  Samples should then be rinsed with distilled water for no more than 10 seconds.  Rinsing longer than 10 seconds may wash out some of the nutrients.   Samples can be dried and then shipped to the lab for processing and testing. 

  Oftentimes soil and tissue tests are deemed precise because they are actual numbers determined by a lab.   While they were determined by a lab, there are many factors that go into a fertility program for a vineyard.  There are not many black or white, right or wrong answers in vineyard fertility management. There is only a continuum of possibilities all of which are impacted by the environmental conditions of the year, the soil, the microbial population in the soil, fertilizers applied, cover crop interactions as well rootstock and scion responses to all of the above.   

  For example, in an extremely dry year, even with adequate boron in the soil and foliar applied boron, your plant tissue samples may show you are short on boron.  Low soil water status reduces boron release from organic matter and boron uptake through reduced boron transport that occurs by diffusion and mass flow to absorbing root surfaces.  The next year, under normal soil moisture conditions, your tissue samples may show adequate boron even though you did not fertilize with boron.   

  Use the soil tests and tissue tests as guides over time for your fertility program but don’t focus too much on the actual numbers, focus on the trends.  Also, don’t forget to use your eyes to see the impact of your fertility program.  

  Generally, nutrients needed in large quantities, such as Nitrogen and Potassium, are applied to the soil.  Nutrients needed in small quantities such as zinc and boron can be effectively applied to the foliage of grapevines.  We will focus on foliar fertilization for the rest of this article.  Boron and zinc can impact fruit set if they are low and are recommended to applied prior to bloom.  This timing is usually critical for prevention of many fungal diseases and these nutrients, if needed, can easily be added to a pre-bloom fungicide spray. 

  Each individual nutrient capabilities for mobility within the plant can impact how effective a foliar nutrient application is.    Mobile nutrients such as nitrogen, magnesium, phosphorus and potassium are moved in the phloem from the older leaves towards the growing tip.   Deficiency symptoms will therefore occur on the older leaves.  Immobile nutrients, such as boron, calcium and iron, are not moved around in the phloem.  Deficiency symptoms will occur in younger leaves near the shoot tip. 

  In addition to nutrient mobility within the plant, nutrients can differ in their absorption through the leaves.  Rapidly absorbed nutrients include the urea form of nitrogen, potassium and zinc.  Moderately absorbed nutrients include calcium, the sulfate form of sulfur, phosphorus, manganese and boron.  Slowly absorbed nutrients include magnesium, copper, iron and molybdenum. 

  Zinc is a nutrient that is partially mobile and is rapidly absorbed through the leaves so it is a good candidate for foliar fertilization.  In contrast, iron is immobile in the plant and is slowly absorbed through the leaves so Iron is a not a good candidate for foliar fertilization. 

  Best practices for foliar fertilization include application during the cooler parts of the day, including a high-quality surfactant, good coverage of the grapevine especially the undersides of leaves and applications to young actively growing tissue. 

  Nutrient management in grapevines is an important management tool in having a productive vineyard that produces high quality fruit.  Regular tissue sampling is required year after year to get feedback on your nutrient management program to fine tune nutrient applications to each vineyard site.  Foliar nutrient applications can be an effective management tool especially for micronutrients.

  Kirk Williams is a lecturer in Viticulture at Texas Tech University and teaches the Texas Tech Viticulture Certificate program.  He is also a commercial grape grower on the Texas High Plains.  He can be contacted at kirk.w.williams@ttu.edu

Resources

  Singer, S.D., Davenport, J.R., Hoheisel, G., & Moyer, M.M. 2018. Vineyard nutrient management in Washington State.

  Western Plant Health Association.  Western Fertilizer Handbook.  10th Edition.  2023. Waveland Press, Long Grove, IL

Blu Dot Farm & Vineyard

Cyndi

Small Batch Wines With Big Personalities

Blu Dot Farm & Vineyard's patio with chairs, umbrellas, a small travel trailer and their rows of vineyards

By: Gerald Dlubala

Blu Dot Farm & Vineyard is a boutique farm, winery and vineyard with a notable history and a bright future. Nestled between the shores of Lake Charlevoix’s and Lake Michigan with terroir directly influenced by the Great Lakes and historical glacial drift, it happens to also be the ideal place to grow great grape varietals. The estate vineyard stretches over approximately eight acres and is owned by Jennie and Paul Silva. Its 5,000 vines are personally attended to by the Silvas and General Manager Samantha (Sam) Smiertka. Blu Dot’s balanced, hand-crafted collection of wines features primarily dry selections and provides an excellent showcase for northern cold-hearty varietals.

  Blu Dot Farm’s history and main barn structure go back to the late 1800s. Originally an asparagus farm, it’s not uncommon for visitors to still see asparagus growing alongside a nearby bike path. Legend states that the farm is named after the original farmer’s son, whose first word was blue. The mid-1960s brought horses into the mix when the farm was used, and very well known for, breeding and training horses for harness racing. As a result, a primary residence, stables, barns, and half-mile racetrack were added to the property.

A Trip to Napa Sets Off a Chain of Events

  Jennie and Paul Silva fell in love with the idea of growing grapes after a trip to Napa in 2006. After returning home and researching vineyards and grape growing, they found that the Northern Michigan terroir was ideal for grape growing. If they needed another sign that they should start a vineyard, the property across from their cottage, already named Blu Dot Farms, became available. It was an unused horse farm in some disrepair but possessing a great history. The Silvas were interested not only because it was a great place to grow a few grapes but also because it was a great property on its own, a place where people once gathered, entertained, and made lifelong memories. It longed for attention and someone to bring it back to life and preserve it in a way to be once again enjoyed and appreciated by others.

  “We decided to initially plant just a few vines, see what happens, and maybe sell some grapes,” said Jennie. “After meeting with other area vineyards, we found that there was actually a shortage of Michigan grapes, so our plan was to make about 10 cases of wine for our own personal use and sell the rest of the grapes. It would be a great family hobby.”

  Work began, with holes being dug for the trellises. When the hole auger broke due to all of the limestone underground, the Silvas felt like they were sitting on a small goldmine. The rocky, loam soil would provide many nutrients for their vines and impart a subtle and welcome mineral presence on the palate. The initial intentions of grape growing and winemaking as a family hobby blossomed into perhaps making the vineyard into a business. Jennie was inspired by a California vineyard that used an airstream on their property for guests and as a tasting room, thinking it would also be perfect for their vineyard.

  “We didn’t want to overinvest,” said Jennie. We just thought that we’d see if this thing gets legs, and if it does, then maybe we can keep going with it.”

  Blu Dot Farm & Vineyard was born. That’s when Smiertka answered an ad and entered the picture.

  “Sam has really met and exceeded all expectations regarding what we were hoping for and wanting in a GM,” said Silva. “She got us to where we are today and has put us in a great position for future growth and success.”

Party Girls Partnership Leads To Success

  Blu Dot Farm & Vineyard’s General Manager, Samantha (Sam) Smiertka, is originally from Delaware. She left a career in graphic design to follow her love and passion for grape growing and winemaking. While on an apprenticeship with a local winemaker and vineyard owner/manager, Smiertka ran their tasting room and handled their marketing functions. After this apprenticeship, she made her way across the United States, building experience and skills in the industry.

  “After that initial experience, I made my way out west and accepted a contract position in Oregon as a winemaker,” said Smiertka. “When I wanted to further explore new wines and styles, I found an employment listing for a startup wine brand and applied. That startup wine brand was Blu Dot, and here we are.”

  Saying that was the start of something big would undersell the relationship. Each individual vine gets specialized care throughout its growing cycle. The vineyard is regularly walked to ensure the vines are healthy and happy. Jennie also spends quality time talking to her vines, which the vines reportedly love.

  Now, Smiertka and Silva are affectionately known as the Blu Dot Farm’s Party Girls, always ready and willing to meet, raise a glass with, and educate their guests on the awesomeness of Northern Michigan grapes and wines.

 These Small Batch, Northern Michigan Wines May Surprise You

  Blu Dot’s wines tend to be more acid-forward, floral, citrus, white wines, and then cooler season, full-bodied reds.

  “We have two sparkling wines and 5-6 dry-style, still wines,” said Smiertka. “The sparkling wines are our fun, party-girl wines, and we offer a Brut Rosé, Rosé, Marquette, Auxerrois, and Itasca, which is new to the area.”

  “Our climate and terroir parallels many of the great winemaking regions in Europe,” said Smiertka. “There are a lot of hybrids and cold hearty varietals that can grow and excel here, including Riesling and Pinot Blanc. We currently have Marquette, Itasca, Traminette, Frontenac Gris, Sauvignon Rytos, and Auxerrois planted.”

   “We’re in our fourth growing year, and currently, our annual production is almost 3 ½ tons on under three acres this past harvest,” said Silva. “We are still young, so any purchases we make are from our valued regional partners within Michigan, and we only purchase the varietals we are actively growing on the farm. We want our guests to get used to our varietals and know what to expect from us when we do start our own production.”

  Silva says that first time visitors may be surprised at the types of wines they will experience at Blu Dot Farm & Vineyard.

  “It really is fun to see the expression on people’s faces when they taste our wines,” said Silva. “It’s not the sweet style of wine that they may be expecting. And our Itasca is a wonderful, new hybrid that came out of the University of Minnesota in 2017. We’re one of the first to plant Itasca here in Northern Michigan. It’s such an amazing wine with an almost clear color. It actually looks like water in the glass, but it is so good and popular that we sell out regularly.”

  Silva tells The Grapevine Magazine that Blu Dot Farm & Vineyard is easily accessible by bike from downtown Charlevoix or Bay Harbor. They offer music, wine by the tasting, glass or bottle, and snacks to accompany their wines. A pizza oven is also being installed and should be ready to go for those wanting a specialty pizza to complement and extend their winery experience.

You’ve Found Your Peaceful, Relaxing, Happy Place

  Blu Dot Farm & Vineyard want you to be happy and relaxed in their peaceful, farm-style atmosphere. On your way into the property, you’ll weave your way through vineyards on both sides of the road until you reach the iconic vintage airstream.

  “We didn’t want to take ourselves too seriously in this whole process,” said Silva. “That’s the vibe our guests have come to know, love, and look for when they visit. The airstream serves as our main tasting room from May through October and reflects our lightheartedness and desire for a fun and memorable time. It’s specifically customized to serve and function as a bar area and tasting room, complete with popup windows, unique spaces, and interior seating for a fun and memorable experience. If guests prefer to sit outside, they’ll find comfort around our firepits with picnic tables, umbrellas, and Adirondack chairs. It’s a very welcoming and fun space to be. For colder months, a small indoor tasting room is also available.”

A Future of Self-Sufficiency

  “Well, it’s safe to say that our little hobby trip to Napa 15 years ago has become very expensive,” said Silva, laughing. “And now, our vision for Blu Dot Farm & Vineyards is all about self-sufficiency. We want to bring everything in-house and be as self-sufficient as we can. We do not do any production on-premise for now, although that is definitely part of our future plans. We also plan to expand our indoor tasting room, and within a few years, we’ll hire an in-house winemaker.”

  “And thanks to a Sunday afternoon combination of a couple of glasses of wine and picking way too many apples here on the property, we played around, experimented, and produced our first cider,” said Smiertka.

  “We made one batch that came out awesome,” said Silva. “These apple trees have been here long before us, and since cider is an increasing in popularity in our region, we hope to move forward with cider production as well.”

  “We are looking forward to a fun future,” said Silva and Smiertka. “The property is amazing, and we have the opportunity to preserve and highlight its history while adding to it. We have someone who still keeps horses here, reminding everyone of the significance of this place in Standardbred Harness-Racing. At one point, this property was home to over 300 horses. It was very well known in the equestrian world. We’d love to expand on that and add additional livestock and different animals in the future to enhance the farm experience.”

  “We continue to learn as we go,” said Silva. “Our local vineyards are very collaborative-minded. It’s amazing and rewarding that our neighboring vineyards are willing to share so much information to help us. I enjoy that type of collaborative mindset because we all want everyone to be successful and help Michigan rise to the top as a wine destination. When visitors come to our region, I see the surprise on their faces regarding the quality of wines we can put out. That quality also helps attract top talent to our area.”

  Blu Dot Farm & Vineyard offers a relaxed setting to enjoy premium Northern Michigan wine with surrounding farm and vineyard views. The vintage customized airstream can comfortably accommodate up to 12 guests and is available to reserve. Outdoor seating is always available on a first-come basis, and leashed dogs are welcome.

For more information, please get in touch with Blu Dot Farm & Vineyard:

11399 Boyne City Rd.

Charlevoix, MI 49720

231.622.3753

info@bludotwine.com