Category: Archived Articles

Tariffs and the Industry: Impacts of the Trade War on Wine, Beer & Spirits

Cyndi

By Jessica Spengler

Throughout 2018, the Trump administration’s implementation of tariffs on several foreign goods, and the retaliatory tariffs that followed suit have confused markets and worried many businesses. The alcohol industry—wine, beer, spirits and those who support them—have all been affected in some way by these tariffs, or expect to be in 2019 if they continue. With the news on tariffs changing almost monthly, it can be hard to keep up, which causes further insecurity for the industry.

Timeline of Events

  Trade tensions began in January 2018 when the Trump administration imposed tariffs on solar cells and washing machines after a report stating that imports were hurting the domestic U.S. market in those businesses.

On March 8, 2018, President Trump announced a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum to take effect on March 23. At this time, Canada and Mexico were granted an exemption pending talks to renegotiate NAFTA. After threats from the EU to impose retaliatory tariffs, the administration allowed exemptions for the EU, South Korea, Brazil, Argentina, and Australia through May 1, which would eventually extend to June 1.

On April 2, China imposed tariffs ranging from 15-25 percent on various U.S. products, including fruit, wine, whiskey, and other products totaling approximately 3 billion U.S. dollars.

On June 1, exemptions from the steel and aluminum tariffs ended for the EU, Canada and Mexico. Argentina and Brazil struck deals with the Trump administration limiting the quantities of steel and aluminum they ship to the U.S., while Australia negotiated for no trade restrictions.

In retaliation, on June 22, the EU imposed tariffs on $3.2 billion of U.S. products, including a 25 percent tariff on Bourbon and whiskey. Then, on July 1, Canada also imposed retaliatory tariffs on $12.8 billion in U.S. products including 25 percent on steel, and 10 percent on aluminum and whiskey. In addition, Mexico implemented a 25 percent tariff on Tennessee whiskey.

After talks with China failed in May, the first phase of the trade war occurs in mid-June, with the Trump administration announcing it will enact a 25 percent tariff on $50 billion more in Chinese goods. Beijing retaliated, placing more tariffs on $50 billion in U.S. products.

In September, President Trump announced another 10 percent tariff on $200 billion more in Chinese products, that he planned to increase to 25 percent at the beginning of 2019. These tariffs impacted manufacturers of fermentation tanks outside of the U.S.

On September 30, a compromised was made between the U.S. and Canada for an updated NAFTA. Mexico and the U.S. had already come to an agreement by this point, and so the new agreement, called by the Trump administration the United States-Mexico-Canada Agreement, or USMCA, would be signed by the three leaders at the end of November. Mexican and Canadian governments were both hopeful that tariffs would end before signing.

In November, President Trump and President Xi Jinping of China both showed interest in coming to a compromise, ending a tense few months of escalation.

On November 30, 2018, President Trump, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto signed the USMCA in Buenos Aires on the first day of the G-20 summit in Buenos Aires without any agreement to end the tariffs. At the time of publication, talks to alleviate tariffs with Mexico and Canada but implement quotas are in progress, but no deal has been reached.

On December 2, 2018, at a dinner between President Trump and President Xi, they agreed to a truce, putting a stop to any further tariffs for 90 days to give the two countries time to come to an agreement. At the time of publication, Robert Lighthizer is leading negotiations, but no deal has yet been made.

Effects to the U.S. Wine, Beer, and Spirits Industries

Wine

China has been a growing market for American wine for nearly 20 years. The market has increased almost 1200 percent since 2001 despite an already steep tax of 54 percent on imported wine. China’s retaliatory tariffs threatened to stop that growth in its tracks if the tariffs continue. After two rounds of tariffs on wine, the first in April at 15 percent and the second in September at 10 percent, the current taxes and tariffs for U.S. wine going into China is 79 percent. That percentage is quite unsettling for winemakers who have a market stake in China, particularly if no agreement is reached and the current truce ends.

Igor Sill, owner of Sill Family Vineyards, told The Grapevine Magazine in an email: “Yes, I’ve been very concerned over the latest exchanges between U.S. and China trade given that we are already being penalized with a 15 percent tariff. The newest retaliation from China to our steel and aluminum trade policies will add 25 percent to that existing tariff, essentially pricing me out of the China marketplace. It’s a real shame, frustration, and disappointment as we have nothing to do with manufacturing and construction materials, but yet are hit with this inability to compete in China’s luxury wine sector against other imported wines. I really pray that the trade dispute with China is resolved equitably and quickly. At $185 per bottle, my Chinese customer would need to pay some $275 per bottle to enjoy our wines. That would greatly reduce China sales for us.”

This reduction is particularly disappointing for Sill Family Vineyards, winners of the China Spirits and Wine Associations’ 2018 Wine of the Year for their 2015 Napa Atlas Peak Cabernet Sauvignon, as well as the coveted Double Gold Medal for excellence.

“We’ve been focused on sales and distribution to the China marketplace since 2014.  It’s a huge market that appreciates the quality of exceptional fine wines and, specifically, they have grown their appreciation for Napa Cabernet Sauvignon by some 10-12 percent each year.  When you have some 1.5 billion people in China, those consumption numbers are more than substantial to someone like us—a small, family producer of limited production, high-end wines, crafting a mere 800 cases of wine per year.”

Sill planned to increase the percentage of his business in China from four percent to eight in 2018 and with a 15-20 percent increase annually through 2023.

“These plans have since changed,” said Sill. They now plan to refocus on the U.S. market, concentrating on high-volume wine consuming states such as Texas, New York, New Jersey, California, Illinois and Florida.

If the tariffs continue, pushing Sill and other California wineries out of the Chinese market and back into the U.S., it could cause problems for lesser known wines.

“If these California wineries decide to curb sending that wine into China, the wine needs to be sold somewhere, and it could come back here to the United States, which could lead to more competition for shelf space and storage with other state wine industries,” said Michael Kaiser, Vice President of trade group, Wine America.

However, Kaiser said, despite the high tariffs that threaten to increase, even more, it doesn’t appear other California wineries are following Sill out of China.

“The exports to China from the U.S. are up 18 percent this year so far. It’s still increasing. I think it was the number fifth-highest market last year for U.S. wine. About $80 million worth of U.S. wine was sent into China last year. So, it doesn’t appear that the tariffs are compelling people not to export their wine to China. I think that it shows how valuable a market it is that people are willing to pay these new tariffs on their wine going into that market,” said Kaiser.

That doesn’t mean that there hasn’t been an effect, said Kaiser. The impact will be more apparent after the new year. “It’s hard to really quantify because [the tariffs] haven’t really been around that long, but we’ll have to look and see what it’s like in January and February when we have the numbers for the year,” he said.

Beer

For many in the brewing industry, what should have been a banner year of expansion and growth ended up as something much different. In December 2017, Congress lowered the federal excise tax from $7/barrel on the first 60,000 barrels for domestic brewers producing less than two million barrels annually, to $3.50/barrel. For imports and domestic brewers producing over two million barrels annually, barrel costs were reduced from $18/barrel to $16/barrel on the first six million barrels. The tax cut opened up staffing and expansion opportunities that excited many brewers.

“Then a few months later, unfortunately, the Trump administration imposed a 10 percent tariff on aluminum, which raised costs for brewers,” said Jim McGreevy, President and CEO of The Beer Institute, the oldest beer trade organization in the U.S.

“We’re seeing an impact to the industry and brewers big and small. We estimate that the tariffs are a $347 million tax on beer. I told you about that tax relief we received in December—that was roughly $130 million of tax relief for beer. So, we received $130 million tax relief in December, and in March we received a $347 million tax increase. This is definitely affecting the industry as a whole.”

The tariff on imported aluminum contributed to the rising prices of cans – in a time when more breweries than ever are embracing use of 12 and 20 ounces cans, as well as the to-go style “crowler.” The extra cost can severely affect the bottom line.

“Aluminum is the single biggest input cost for beer brewers. Of the 6,000 or more breweries in this country, you see more and more distributing their beer, and you see more and more putting their beer in aluminum cans and aluminum bottles. So this is a major input cost for beer brewers, big and small. That 10 percent tariff affected beer brewers because a large portion of aluminum used to put beer in comes from outside the country,” said McGreevy.

It doesn’t seem to matter where or how a brewer buys their aluminum either.

“One large brewer announced a few months ago that this was a $40 million cost to them every year. We’ve had small brewers who are members of ours—even small brewers who are not members of the Beer Institute—tell us that their aluminum costs are going up, even if they get their aluminum from a broker. This is affecting the price of aluminum up and down the chain, no matter how you get the aluminum, whether you have long-standing contracts with aluminum providers, or you’re a smaller brewer, and you’re getting your aluminum from a broker,” said McGreevy.

Bourbon and Other Spirits

The U.S. Bourbon industry is hit hardest in the EU where retaliatory tariffs of 25 percent threaten to stifle what has been, over the last few years, a booming industry. Eric Gregory, President of the Kentucky Distillers’ Association, a non-profit trade association founded in 1880, told The Grapevine Magazine that Kentucky Bourbon is an $8.5 billion industry with the state, employing 17,500 Kentuckians with a payroll of over $800 million. Bourbon distillers contribute $815 million each year in local, state, and federal taxes, with much of their local and state taxes going to fund education.

According to Gregory, Bourbon has remained relatively safe thanks to the foresight of larger distillers. “So far, and I say that with a word of caution, we have not had that much of a dramatic impact. The reason is mainly two-fold: a lot of the smaller craft distilleries really haven’t gotten into the export market yet—they’re barely able to produce enough product just for the regional market at best. The bigger distilleries that have the global distribution network and who are expanding at rapid rates, mainly to meet that global demand, most of them had the ability to stockpile product overseas before the tariffs hit. From every indication I’ve been told, that is carrying them through until about the first of the year,” said Gregory.

However, after the stockpile dwindles, prices will likely go up, and Gregory said that will likely keep Bourbon from continuing its uptick as a serious contender on the world stage.

“I don’t think you can find a better example of free and fair trade than Kentucky Bourbon in the last 20 years. We have grown exponentially. In 1999, just a couple years after the tariffs, NAFTA and the free trade pact with the EU took effect, as a state we only produced 455,000 barrels of bourbon. Last year we produced 1.7 million barrels of bourbon. Much of that is going to the global exports. [We’ve been able to] put ourselves on a level playing field with our friends in the Scotch industry and other great whiskey markets. We’ve been able to convert drinkers to Kentucky Bourbon, and if we have a problem with competing on the shelves and prices, then we can lose some of those converts who might look at what they used to drink, and it’s less expensive, and they’ll start drinking that again. At that point, if we’ve lost them, we might have lost them for a generation,” Gregory said.

Bourbon distillers can choose to absorb the cost of the tariffs, which hurts the local economy as a whole. “That’s less money and profits coming back to your companies, which means less investment in Kentucky, fewer jobs, and we don’t like that either,” said Gregory. “In Kentucky, with Bourbon being such an economic driver, both from jobs to tourism, we are just now starting to ratchet up production and tourism opportunities, and it’s really like throwing a wet blanket on a booming industry.”

What worries Gregory the most, is the long-term effects that the tariffs may have within the Bourbon industry and on Kentucky. “Worst case scenario, you get to a price war, where there’s an abundance of Bourbon on the market, and that drops down prices, and that significantly harms our smaller craft distillers. They’re just now trying to survive in this market,” he said. “Even worse, worst-case scenario, if distillers start to produce less Kentucky Bourbon, which has a dramatic ripple effect across the Kentucky economy, and not only means fewer jobs and less investment, but we are the only place in the world that taxes aging barrels of spirits. So if you’re enjoying an 18-year-old bottle of Kentucky Bourbon, it’s been taxed 18 times, and the great majority of that tax revenue goes back to fund local schools. If for whatever reason we get to the point where we’re producing less, then, it can ultimately hurt education and other public health and safety programs here in Kentucky.”

Other spirit producers have lost contracts, been forced to lower price points in other countries, and had to adjust future growth projections due to the tariffs, American Craft Spirits Association Executive Director Margie Lehrman told The Grapevine Magazine.

“I’ve had distillers tell me that they had contracts on their desk ready to be signed for export to China, for instance, and those contracts got ripped up. It’s just simply off the table,” she said. “I’ve had other distillers tell me that they had actual product on freight going over to Great Britain, where they were told by the importer, ‘If you want us to off-load your freight, your price point has to drop down to this.’ I had one distiller tell me they had estimated over 30 percent of their business [would go to] export sales and because of the tariffs, they needed to knock that down to 15 percent, which is really significant for these small businesses.”

Suppliers

Some industry suppliers who manufacture their equipment anywhere other than the U.S. were hit by the second round of tariffs in September. This tariff affects manufacturers of stainless steel fermentation tanks, such as William Cover’s company, Fermenters Choice Stainless Ltd. They import stainless steel fermentation and storage tanks for wineries, brewing and industrial purposes;  manufacturing their tanks in China, and then shipping them to the U.S. and Canada. Because of this, their fermentation tanks were hit with a 10 percent tariff in September, and, if the talks between the U.S. and China fall through, could increase to 25 percent in early March 2019. Cover only recently expanded into the U.S. in 2017. Previously he’d serviced only Canada.

Cover told The Grapevine Magazine that right now he cannot compete with American made tanks, but he believes that once stocks of pre-tariff steel deplete and manufacturers begin buying more expensive U.S. steel, he may see a swing back in his direction, though, at a higher price.

“There are also tariffs on imported stainless steel–the raw stock used by U.S. based tank manufacturers to make tanks. So once their current inventory of stock and their costs and final product cost is likely to increase as well. That should make my price competitive again, although at a higher final cost to the winery and brewery than before,” said Cover.

For now, Cover looks to markets other than the U.S., a move he believes many other manufacturers will make. “The products produced in countries like China now need to find another market. There will likely be a reduction in their export price. I am now expanding my business to South America – there are large wine producing regions in Chile and Argentina. This is an example of the consequences of tariffs– other countries will buy less expensive products, decrease their costs and increase their market share.  These new tariffs will contribute to lower cost, foreign growth in the wine industry,” he said.

Imported brewing equipment such as bright tanks have remained mostly unaffected by the tariffs but already carried a four percent tax before the trade war.

Restaurants and Retailers

For restaurants and retailers, the tariffs affect the bottom line when their alcohol suppliers—breweries, wineries and distilleries—increase prices due to rising production costs. Justin Shedelbower,  Communications Director at the American Beverage Institute, a trade organization that represents restaurant chains that sell alcohol, told The Grapevine Magazine what happens when these price hikes flow downward.

“For an industry such as the beer industry, that uses a lot of aluminum, [the aluminum tariff] increases the production cost significantly, which forces them to raise the price of their products. That price increase rolls downhill to the consumer and restaurant level,” said Shedelbower. “Once you get to the restaurant, it’s higher priced beer. The restaurant has two choices. They can either keep their prices the same and eat that extra cost, reducing their profit margins, or they can increase the price they sell to their customers with, and that just ends up reducing sales. If something costs more, people buy less of it.”

Reduced sales lead to reduced profits, which may lead to canceling plans for future expansion or cutting staff.

“Many of these restaurants already have slim profit margins as it is. When profit margins are eaten away further by either taking on the costs of these tariffs or just not selling as much because the prices are higher, it just eats away at it further. So now they don’t have this extra cash on hand, whether maybe they were planning on expanding, so maybe now they can’t expand or hire the additional employees that they needed. Or it can induce layoffs,” said Shedelbower.

A Possible Solution in the Works

  With the signing of the USMCA and the 90-day truce with China, it’s possible that the worst is over, and the world will soon see a return to normal trade routines. Reactions to these events are encouraging to both trade organizations and producers; however, there is still plenty of work to do.

“We were pleased to see there will be a pause in any tariffs for at least 90 days. We will continue to let Congress know about our feelings on the tariffs. What it means, in the long run, is anyone’s guess,” said WineAmerica’s Kaiser.

“The signing of the USMCA is definitely a step in the right direction and will help alleviate tensions between the three countries. However, the tariffs on imported steel and aluminum still remain—an elephant in the room that needs to be addressed. The U.S. imposed tariffs, and the subsequent retaliatory trade penalties continue to threaten the hospitality and alcohol industries with higher operation and production costs, as well as induce growing challenges for accessing foreign markets,” ABI’s Shedelbower told us.

“We hope lawmakers require the administration to end tariffs as a condition of support for the United States-Mexico-Canada Agreement. In our eyes, the deal is incomplete until the administration eliminates all steel and aluminum tariffs,” The Beer Institute’s McGreevy said.

Cover of Fermenter’s Choice is happy about the truce, but he thinks a deal will take into account the changes the tariffs made to the market. “It remains to be seen how long it will take to remove them altogether. I don’t expect that to happen quickly as the American companies that ramped up production of steel and other commodities—reopening old plants, hiring new workers, etc., will lobby hard for some time to recoup their investment. It’s not fair to them to remove the tariffs so quickly—and a bad political move for Trump. I would expect the second tariff to come off after a few months, but the first tariff could be a year or longer.”

Igor Sill is relieved, not only for himself but for the positive impact a deal could have on both the Chinese and U.S. financial markets. “China’s financial market has been severely depressed since Trump announced his policy’s intention, and of course, we’ve seen Wall Street’s, and the global stock markets drop as well. With today’s “truce” announcement I sense that wiser minds will prevail and an equitable resolution, i.e., no tariff, or considerably lower tariffs will salvage the global economic markets and my ability to sell our wines into China. Overall, I’m much more optimistic now.”

“Wine is Sunlight, Held Together By Water”

Cyndi

By Tracey L. Kelley

Galileo said, “Wine is sunlight, held together by water.” A wine enthusiast may have this quote in calligraphy on a decorative wall hanging, but winemakers and vineyard managers know the truth behind it.

Vineyard irrigation isn’t often a romantic craft topic, but its constant evolution requires frequent examination and an exchange of knowledge so each droplet replenishes the vine in just the right way. And while American Viticultural Areas (AVA) delineate regions with similar characteristics, individual landscapes still present unique challenges in water management that encourage or prohibit the best yield. This is when the application of science influences art.

Fine-Tuning Your Approach

Maybe after last year’s harvest, you discovered some inconsistencies. Perhaps your current system isn’t as effective, or needs other modifications. Or as the acreage grows, it’s harder to keep up with soil variations and water needs in certain areas. “Irrigation management takes a lot of time and effort to ensure it’s managed correctly,” said Wesley Porter, assistant professor and extension precision ag and irrigation specialist with the University of Georgia (UGA). “Precision irrigation is critical to proper crop production and quality. This allows for more stabilized yields during times of low to no rainfall, more commonly known as periods of episodic drought. So this is a task growers should take seriously.”

Technological applications in precision viticulture continue to expand the potential of using quality data and devices with which to base decisions. For example, aerial mapping by drone enhances topographical views. Remote sensing, first established for many aspects of agriculture the 1960s, is now an essential component of vineyard irrigation systems. “Using only sight inspection to determine irrigation scheduling isn’t the most valid method, as once moisture stress is visible, typically yield is lost,” Porter told The Grapevine Magazine. “More advanced methods should be implemented such as soil/water balance models or soil moisture sensors to make appropriate irrigation scheduling decisions.”

Usually there are two ways to measure soil moisture in an active vineyard:

  • Tensiometric measurement, or soil water tension, which analyzes the physical force holding water in the soil.
  • Volumetric measurement, which evaluates the percentage of water in a certain area of soil.

Often, it’s important to understand how difficult it is for vines to draw water from the soil. Soil texture classes for vineyards include clay, loam, sand, and silt, with varying characteristics for each. Many growers often deal with a combination of soil compositions in their landscapes, and this means continuing to recalibrate irrigation procedures with proper data.

Tom Penning is president of IRROMETER, based in California. The company manufactured the first commercially-viable tensiometer for use with scheduled irrigation, and now has a product line that includes sensors, reading meters, and remote data access portals. Penning said these technological field tools help producers strategize irrigation needs and solve problems, such as excessive run-off or pooling, more quickly.

“The sensor data gives them information on water availability with which to make these decisions. If evidence of significant variability in percolation is revealed, then the grower can determine where to change emitter sizing to better match the soil characteristics,” he said. “Sensor data provides better resolution of where and when these problems occur, thus allowing the grower to better address the issues.”

IRROMETER’s tensiometric devices don’t require site calibration, but volumetric measurement devices often do. Since most soil moisture sensors work with a variety of irrigation methods—including drip, sprinkler and micro-spray—a producer’s choice often relates to irrigation capabilities, terrain and personal preference.

And a winemaker’s approach to irrigation refinements and scheduling might include a solid combination of tech along with paying attention to the vine’s subtle hints.

“I like to make a ‘leaf sandwich’—gauging leaf temperature by holding a leaf between your hands,” said Gill Giese, a viticulture extension specialist at New Mexico State University. “Even a fully-exposed leaf should be somewhat cool to the touch. If not, the vine may be stressed. Other vine-based indicators are drooping leaves, such as when you see their angles in relation to the sun are bent downward to avoid full exposure. Finally, look at the tendrils. If they’re exerted beyond the shoot tip, then the vine is likely not water stressed,” Giese said.

A longtime educator, Giese is also a former winegrower for Shelton Vineyards in the Yadkin Valley region of North Carolina—the first AVA recognized by the U.S. federal government. One challenge there had less to do with designing an effective watering system, but rather dealing with the excess moisture of the region due to humidity and rainfall—a common problem for many growers east of the Rocky Mountains. He advised producers to assess other site-specific factors when determining irrigation needs.

“All the vine-centric parameters should be considered: climate, vine spacing, trellis type, variety and rootstock, training system and production goals—both quality and quantity. These needs are reevaluated as the vineyard develops and grows, year-to-year and within a given season. Vine age and phenological growth stage impact the optimum water requirements as well,” Giese told The Grapevine Magazine. “Additionally, beyond the obvious differences of climate during the growing season such as differences in precipitation and vapor pressure deficit, grapevines progress through the same growth stage, regardless of location. The optimum amount of water for each growth stage must be learned at each location.”

Penning said one problem growers face is they often don’t know the variabilities that exist within the soil in the vineyard. “The use of soil moisture sensors illustrates the status within the root zone, which isn’t visible without in-situ instrumentation,” he said. “The status below ground as well as what’s visible on the surface at representative locations provides the grower with comprehensive data when they schedule irrigation.”

A frequent question about irrigation practices involves understanding when not to water. This harkens back to the adage of “stressing the vine.” Giese had thoughts about this.

“The grapevine needs a slight water deficit just after berry set in order to limit berry size at veraison and harvest. Regardless of location, a widespread belief or practice is limit water to vines post-veraison. This is tricky,” he said. “Too much stress and the leaves stop photosynthesis. If this happens, the flow of sugar and other assimilates is halted and berry-ripening suffers. If photosynthesis stops and then water is supplied, the delay in reactivation of photosynthesis may too late to be optimal. But growers east of the Rocky Mountains differ because of water excess due to rain post-veraison. In some dry vintages, they’re tempted to totally withhold water post-veraison, and this can be a mistake.”

Giese suggested producers apply stress through regulated deficit irrigation, but don’t over-stress vines. The University of California, Davis (UCDavis) Drought Management Department provides detailed information about this practice on its website. For further reading, also consider Pete Jacoby’s research at Washington State University about deeper subsurface irrigation systems that force grapevines to extend root zones, stress plants only slightly, and require less irrigation.

Finally, if you’re not already employing the use of cover crops between the rows to boost irrigation efforts, these experts encouraged you to do so.

“The correct selection of cover crops help in many ways,” Porter from UGA said. “They aid in shading the soil surface and improving soil structure, both of which reduce evapotranspiration; and also aid in increasing infiltration and reducing runoff. Cover crops also encourage weed suppression.”

Giese added, “Cover crops can provide competition for excess nutrients and water in the case of regions with excess rainfall. They also provide numerous other benefits:  ground cover or thatch/mulch that limits evaporation, increased infiltration rate of water, better soil structure and thus, improved water holding capacity, increased organic matter, mitigation of erosion and others,” he said. “But in the Southwest, most growers don’t employ cover crops, as the amount and cost of additional water required is prohibitive. I currently have some studies in place to take critical look at some ground cover options in the Southwest.” 

Right Now, It’s All About Maintenance

The average cost of a vineyard drip or micro-sprinkler irrigation system ranges $1,500-$3,000 per acre. While some growers may participate in a cost-sharing plan, managing this investment effectively comes down to maintenance. Here are a few things to consider.

  • Growers west of the Rocky Mountains might still need to water once a month or so “to ensure the soil profile is nearly full when vines are ready to bud out in spring,” said Giese.
  • Growers east of the Rockies should winterize their systems. “Check for leaks, evaluate hose structure, check the pumping system and filters and so on,” said Porter. He offers a number of irrigation resources, including checklists for maintenance, on the UGA Extension website.
  • Throughout North America, wildlife control is an ongoing concern in irrigation maintenance. “This is a hard issue to resolve,” Porter said. “Do the best job you can to keep equipment protected either in weatherproof enclosures or critter-proof sheathing. Ensure that drip tape and emitters are buried and/or out of their reach.”
  • Get started on growth season maintenance by clearing vines, roots and weeds from emitters, testing soil and water, calibrating pressure gauges to manufacturer guidelines and running pump tests.
  • Also use this time to look into more cost-savings measures. For example, solar-powered drip irrigation systems help growers better manage energy and water consumption. A fact sheet is available on the UCDavis website.

Incorporate Conservation Methods Now

A primary concern of any vineyard owner is proper land management, and water continues to be a critical resource to conserve. “Global water concerns heighten the awareness of the importance of water use efficiency,” Penning said. “Precision agriculture includes exact water management, and these concepts are needed for sustainability of the resource.”

World climate data indicates the past four years were the hottest on record, with expanded drought events. While grapevines endure heat and drought better than most crops, and dry farming is still popular throughout Europe, growers notice climate changes and the need to modifying practices. In 2018, excessive drought in South Africa’s Western Cape reduced harvest by 15 percent. Producers there are evaluating drought-resistant vines still rich in flavor, intensity and acidity. Growers in France are purchasing land farther northwest in chilly, cloudy Brittany, once considered undesirable because of winds and moisture off the Atlantic Ocean.

In America, the Petaluma Gap in Northern California received an AVA designation in December 2017—something that probably wouldn’t have happened 20–30 years ago for this cooler, slightly wetter clime. Similarly, the Van Duzer Corridor in Oregon is experiencing rapid growth as winemakers use the region’s hot, dry days tempered by cool nights and damp morning fog to nurture thin-skinned grapes.

Giese said proper water and irrigation management has always been critical to growing wine, and will continue to become more of an issue as increased demands are placed on water supply. “Growers in the West have been aware of this for some time. Look to work being done in California and Australia for trends in irrigation and management. Often growers of other high-volume or high-value crops use techniques we can adopt for advantage in winegrowing,” he said.

One rising trend in North America is the use of vineyard waterbodies for irrigation needs. Few vineyards have quality wells to draw from, and many states and provinces continue to implement strict water rights and usage laws for agricultural access to springs, running water sources and municipal or rural systems. Depending on the size of the property, even a two- to three-acre pond can be a viable, independent source of summer irrigation.

A strong sustainable method for drip irrigation systems, ponds can also flash supply micro-sprinkler applications when vines are in need of frost protection or conversely, cooling from high heat, without too much danger of exhausting the pond when more frequent irrigation scheduling events are necessary. Primary reservoirs are often reliant on rainfall as well as subsurface water collection drains for replenishment, but additional waterbodies can be created to contain and later aerate wastewater from the winemaking process.

There are some concerns when sourcing from onsite still water sources. Following local and federal quality regulations and frequent testing for algae, nuisance weeds, invasive species, bacteria and chemical runoff from neighboring farms are major management issues. Pest and mosquito control can sometimes be a problem. Wildlife in search of fresh water can damage or pollute a reservoir, or happen to also love juicy grapes, furthering labor efforts for netting and other protective methods.

There’s also the investment. For example, if there isn’t a suitable clay soil site on a property to use as a base, then installing additional soil reinforcement or even liners is necessary. Proper buffering methods are a must as well. On average, the cost for vineyard pond construction could escalate beyond $200,000. However, the need for conservation is so great, there may be options.

“Often, government agencies incentivize the purchase of such irrigation water management tools to improve the efficiency of water use,” Penning said. “Growers should check with their local agencies to see if funding is available to help subsidize the investment.”

In addition to county and state initiatives supporting soil and water conservation grants, another possibility to establish a sustainable irrigation system is the USDA’s Natural Resource Conservation Service. The agency often extends funding through its Conservation Stewardship Program, Environmental Quality Incentives Program, Regional Conservation Partnership Program and water-based Landscape Conservation Initiatives.

Protect Events Hosted at Your Winery with Event Insurance

Cyndi

By Markel Insurance

By now, most winery owners have heard the buzz regarding event insurance.  Sure, you know it exists, but do you really know exactly what event insurance covers and how it can benefit your clients (and you)? Event insurance is a necessity for winery owners looking to keep themselves, and their clients, protected.  We recently talked with Lauren Hernandez, Senior Event Insurance Specialist at Markel Specialty insurance to learn more.

“It is probably important to first point out that there are two different types of event insurance– event liability and event cancellation,” states Hernandez.

LIABILITY INSURANCE

“Event liability protects the person hosting an event at your facility,” Hernandez explained.  If during their event someone causes property damage to your winery or someone is injured and the host is liable, an event policy will step in to provide coverage.  The coverage is typically primary over any other insurance protection.  That means the event policy will pay first before any other insurance policy.

Primary liability coverage by event hosts, such as your clients, is preferred by most venues because it helps minimize the associated risks and exposures of owning a winery. “More and more wineries are requiring their clients to purchase one-day event insurance policies for events hosted at their facility because it reduces the possibility of having to pay for an accident that is out of the wineries’ control,” said Markel Specialty’s Lauren Hernandez.  Wineries must also remember to require the host to name the winery as an Additional Insured on the host’s event policy.  That way, if there is a claim made against your winery due to the actions of the host, the event policy will defend and indemnify you against that claim.  It is also a good idea to require the host’s insurance carrier to be A.M. Best rated “A-” or better.  That way the carrier is financially strong and likely to be around to pay the claim should one occur.

Examples of claims that would be covered under an event liability policy can range from damage to a furnishings such as couches, mirrors, coffee tables – even toilets and landscaping from wedding or other event guests.  Event hosts would also be protected if someone slips, falls and gets injured at the facility if the host was negligent.  There are even worse claims that the event host needs protection from when an over-served wedding guest is involved in an auto accident on the way home.  These situations would be covered only if the damage or injury was the fault of your client.  Your business should have your own risk management plan which includes liability coverage to protect you from the hosts wrongdoing.

ADDITIONAL EVENT LIABILITY COVERAGE BENEFITS:

  • Limits vary by insurance carrier, but bodily injury and property damage liability limits typically are up to $1 million per occurrence and $2 million total per policy period.
  • The venue can be named as “additional insured” on the certificate of insurance for no extra cost.
  • Host liquor liability is included for free.
  • Set-up and tear-down is covered (within 24 hours of the event).
  • If the event being held at your facility is a wedding, an event liability policy covers the ceremony, reception and rehearsal dinner (if the rehearsal dinner is within 48 hours of the event).
  • Many policies are primary over any other insurance policy. This means, if a claim were to occur, the event liability policy would pay out before any other insurance policy and there would be no need to worry about a potential increase in rates with a commercial business policy (as an winery owner) or homeowners policy (as a bride).
  • Protection and peace of mind for a low cost— there are policies available that start as low as $75.

WHY SHOULD YOU REQUIRE EVENT LIABILITY INSURANCE?

  It protects you. One day event insurance policies are typically primary coverage over your commercial business policy for property damage to your facility caused by your client’s negligence. Your facility can be named as an “additional insured” on the certificate of insurance often for no extra cost.

  It protects your customers.  Event insurance is an easy and affordable solution that helps protect your guests from the unexpected – because when your clients are properly protected, so is your reputation.

  It’s an easy solution. More and more commercial winery insurance policies are requiring one day event insurance for all events hosted at the insured winery.  An event liability policy fulfills this requirement and are easy to purchase and you can direct your client to purchase them online or over the phone in minutes.

EVENT CANCELLATION INSURANCE

Another popular event insurance option is cancellation coverage.  Being in the event industry, you’ve seen it all. Photographers go missing the day of the event, gifts get stolen, and hurricanes can ruin a perfectly planned event. Event cancellation insurance is becoming increasingly popular because it reimburses the event host for lost deposits and non-refundable amounts if they need to cancel or postpone their special event due to unforeseen circumstances.

  Examples of unforeseen circumstances include:

  • Vendor bankruptcy
  • Accident or illness of the bride or groom or an immediate family member
  • Extreme weather (hurricane, named tropical storm, etc.)
  • Military deployment

Event cancellation insurance also covers additional expenses your cli¬ent may incur to avoid cancelling their event, and pays for other losses or damages such as:

  • Lost wedding rings
  • Damage to special attire
  • Vendor no-shows
  • Lost or damaged photography
  • Lost or damaged videography
  • Lost or damaged gifts

The pricing for an event cancellation policy is a little more involved as it is based on where the wedding is set to occur and the overall wedding budget. Policies start as low as $130.  Exactly how much event cancellation coverage does each event need?  We suggest having a conversation as early as possible before the event to determine coverage limits bassed on the total overall event budget.

WHAT ISN’T COVERED UNDER EVENT INSURANCE 

With event insurance, some claims would be hard to disprove.  Because of this, many insurance carriers will exclude covering certain circumstances because of the potential increased risk of insurance fraud.

  Examples of circumstances typically not covered:

  • Change of heart –Typically if either the bride or groom get cold feet and change their mind during the wedding planning process or are at the altar and decide not to go through with the wedding, this would not be covered.
  • Known Circumstances – Previously known issues that could affect the event (Example: planned medical procedure delays or cancels the event)
  • Lack of Funds – if the event host is unable to pay for the planned event
  • Non Appearance – if certain individuals (such as parents, the bride, etc.) don’t show up for the event, the show must still go on as this would not be covered. Polies do not cover cold feet if either the bride or groom change their mind during the wedding planning process or at the altar and decide not to go through with the wedding.

START PROTECTING YOUR CLIENTS

It’s easy to start protecting your clients (and yourself).  Request free brochures from Markel Event Insurance and provide your clients with an easy & affordable option to protect their special event.  Event liability policies start as low as $75 and can be purchased online or over the phone in minutes.

To Learn More Visit www.markeleventinsurance.com/grapevine

Winery Retail Marketing Will Finally Come of Age in 2019

Cyndi

By Susan DeMatei

Spoiler alert: nothing I talk about in these predictions is groundbreaking, or new technology or techniques for marketing. These are tactics that the digital eCommerce world has been using and perfecting for quite some time. We hear about these strategies at conferences, and experience them with other brands we interact with…but we don’t take those practices to work with us when we market our wine. We are a slow industry to adopt new trends. Why is that?

Margins are Low

Margins are low across the board for wine – albeit better in Direct To Consumer (DTC) channels versus wholesale – but the hospitality cost that is carried on the DTC side balances the scales. Management, at any company, is going to focus resources and innovation in the areas with the greatest impact to the bottom line. Although the last ten years have seen a tremendous focus and growth in DTC marketing, it is still not matching the infrastructure and technology behind wholesale tracking, reporting and sales.

Those With the Means Don’t Have a Motive for Change

Companies with large case production report only 5-20% of their total revenue coming from the DTC channel. This percentage increases as the case production decreases, leaving only the smaller production wineries reporting more than 50% of their total revenue coming from DTC sales. Couple this lopsided payout with the fact that most technological adoptions and paradigm shifts happen from the top – or big guys – down, DTC channels often do not receive the marketing budget and technological innovations as wholesale. The result? We have an industry where the large corporate wine conglomerates have the cash and clout to change the way we market, but there are few innovators.

Our Innovators are the Outliers

Our industry innovators are typically small wineries run by a geek winemaker or owner who was a computer engineer, or used to work in the corporate sector with technology and tools at their disposal. Out of frustration, these people have cobbled together different systems with jerry-rigged features and fields to get what they want for their winery. Since it’s the occasional oddball that is doing this, they may be interesting, and asked to speak at the occasional conference, but they don’t gain much traction in creating widespread change.

Our Focus is Diverted

Wine is an agricultural business and of the wineries in North America, the majority is very-small to small production. This has a couple of implications. First, winery decision makers don’t spend their days behind a desk. They are typically not glued to their website or social media platforms and are more versed in pH chemistry than megabytes. This also means means they are distracted and wear many hats. Winery owners typically are part farmer, part chemist, part handyman, part botanist, part guest services, part salesperson, and part janitor. Sadly, marketing and its execution take a back seat in attention. It is one thing to be able to hand-sell your wine at a pouring, but quite another to think through online marketing channels, social media advertising and Google Analytics funnels.

Our Vendors Hold Us Back

Should you choose to sell online (compliantly) and offer a wine club, there are a handful of technology platforms to choose from. These systems are handy all-in-one solutions that offer website hosting, eCommerce, compliance, fulfillment, wine club, CRM, emails, POS, and reporting. What could be better, right? In actuality, wineries get locked into these vendors with all their eggs in one basket. Vendors typically hold features and development close to their vest, not wanting to open up and share or integrate for fear of losing market share. Wineries witness a daily battle between the vendors for marketshare, and it’s the wineries that lose.

This is in stark contrast to other markets where open APIs encourage integration, allowing customers to choose and pay for add-ons, apps, and features that work best for their business. Can you imagine if Apple didn’t encourage the App Store, or WordPress didn’t have plugins? Integration and cooperation is the widespread standard in other industries, but sadly, our platforms haven’t adopted this practice. This is not in their customers’ best interests, but in their own.

Despite these hurdles, change is coming. We have finally reached critical mass in mainstream interest, generating a number of topics that will be the talk of conferences this spring.

Subscription-Model Clubs with More Flexibility are Coming

We are a subscription economy. Amazon to Zappos has encouraged repeat business by making it easy to choose what we want, and reorder often. Our wine club model is based on technology from 15 years ago which doesn’t allow members this flexibility, yet many wineries still cling to it. Can you imaging signing up for Blue Apron, or Stitch Fix, or Netflix if you had no input or control over what they sent and charged you for? You’d never do it, yet incredibly we persist in this model. This is the most obvious winery sales channel that clashes with the modern world, and for that reason it is quickly eroding. If you haven’t moved to a more flexible model by the end of 2019 – you’re not only going to lose sales, but you’re doing your customers a disservice.

  Smarter email marketing will finally emerge.

90% of wineries are now emailing frequently. (If you’re still concerned you might “bother” your customers, I urge you to rethink the value of your communications.) Wineries are also acknowledging the influence of the mobile phone on email design and changing the way they write and link emails to be succinct and visual. We’ve been talking about segmentation for a decade, and it is now standard practice for our clients to create different emails for club versus non-club, geo target a list, or target emails to buyers of a certain product. All of these things were slow to happen but moves in the right direction.

The next step we will witness is wineries actively using marketing automation. We see it every day when we get an abandoned cart email, or Amazon suggests items, or Facebook puts that item we were looking at on another site into our Facebook stream. Mailchimp and other affordable platforms exist to empower novice marketers to put together thoughtful campaigns with the right message to the right target at the right time. This type of thoughtful segmentation  is critical to future eCommerce conversions and we should see better responses across the board in 2019 as a result.

Integrated Campaigns and Social Media Ads will Appear

After decades of seminars and blog posts about how to and what to post, wineries are finally getting the hang of social media content. They are also seeing the value of connecting with their customers, being authentic, and sharing themselves online. We’ve gotten over the “pay for it” hurdle – realizing that these channels are a business and it makes sense to pay for increased viewership – and have gotten the hang of targeting. We can comfortably check this box off our learning list.

The next step is scheduling ad campaigns on a regular basis. We’ll see wineries plan for, and put aside social media advertising budgets. And, hopefully, we’ll begin to see more integration across platforms. For instance, the marketing email that was just sent out is also made into a Facebook ad with the segmented list uploaded as a target. This type of multiple exposure can greatly improve responses to campaigns and we’ll see more of it in practice in 2019.

Integrations will Drive Change

In 2019 we’ll start to see big wine technology vendors crack under pressure to integrate. For years they’ve been holding back the tidal wave of feature requests from disappointed customers. Technology costs are now affordable and the need has never been more focused and apparent. We will see an onslaught of new players enter the market, not to provide “all in one” solutions, but to build onto the existing platforms and help them meet these new customer needs. The vendors that embrace this will win, and the ones that don’t, clinging to their closed feature set and market share, will lose.

Outsourcing will Become the Norm Versus the Exception

There is a perfect storm brewing when you combine everything above – low margins, less reliance on the old guard technology, the need for fresh thinking – that tells wineries they must innovate to compete. However, finding technology savvy staff in often rural environments can be challenging – especially after the fires of recent years have driven housing costs out of the reasonable range for most people. The salary that wineries can afford is hopelessly out of whack with what employees need to live in “wine country”. Additionally, the competitive market is allowing employees to choose higher paying jobs with better benefits. The result is that many of these entry to mid-level DTC jobs (the Wine Club Coordinator, the DTC Manager, the Tasting Room Assistant Manager) remain unfilled, posted for a quarter to half-a-year before a new hire is made. This has resulted in an openness to outsource these DTC jobs to a consultant or agency. An outsourced agency typically has staff with specialized skills, are flexible and reliable, and cost less than an employee – and they don’t quit or take sick days. This allows the wineries to focus on what they do best – making wine. This is proving vital to small to medium sized wineries that are really feeling the economic crunch, yet still have to get work done.

So while none of the above is new, it’s new to the wine industry. 2019 will be an interesting year. We should see the establishment shaken up with new players, smarter marketing, and better responses to campaigns. This shift will certainly help the wineries, but ultimately is their customers that are the real winners.

  Susan DeMatei is the President of WineGlass Marketing, a full-service direct marketing firm working within the wine industry in Napa, California. www.wineglassmarketing.com

TTB Proposes New Rules for Wine Labeling & Advertising

Cyndi

By Brian D. Kaider, Esq.

On November 26, 2018, the TTB published in the Federal Register a notice of proposed rulemaking, titled, Modernization of the Labeling and Advertising Regulations for Wine, Distilled Spirits, and Malt Beverages (83 Fed. Reg. 60,609).  The purpose of these proposed rules is to “simplify and clarify regulatory standards, incorporate guidance documents and current policy into the regulations, and reduce the regulatory burden on industry members where possible.”

When the federal government wants to change rules Americans are subject to, they must first publish the proposed rules and provide a period of time for the public to comment and make suggestions.  The government agency is required to review and consider all suggestions before implementing a final rule.

This process is not a formality.  TTB wants the rules to adequately protect the public while being as fair and unobtrusive as possible to industry members.  It is actively seeking comment on many issues in this notice.  As members of the industry affected by these rules, winery owners would be well-advised to review TTB’s proposals and provide feedback before the March 26, 2019 deadline.

This article is meant to introduce some of the key issues with which TTB is grappling.  For more detail, please see the full proposal (linked at the end of the article).

Organization

One of the most fundamental proposed changes is a reorganization of parts.  Currently 27 CFR parts 4, 5, and 7 relate to wine, distilled spirits, and malt beverages, respectively.  TTB is proposing to keep those parts, but to consolidate all advertising issues to a new part 14.  They will also make the organization of parts 4, 5, and 7 more uniform.  Subjects will be in the same order and the same section numbers will be used within each part.  For example, regulations identifying the mandatory information for wine, spirits, and beer labels will be in sections 4.63, 5.63, and 7.63, respectively.

COLAs

In section 4.14.1, TTB is proposing to change the definition of “COLA.”  Currently, only changes specifically authorized on the COLA form itself may be made to an approved label without filing for a new COLA.  The new definition would allow TTB to authorize additional changes in other ways, such as through issuance of a guidance document on the TTB website.

Certificates of Exemption

Current TTB practice enables an applicant to obtain a certificate of exemption from label approval conditioned on the applicant’s agreement to add the statement, “For sale in [name of State] only” to the label.  Proposed rule 4.23 will require the applicant to include the statement on the label submitted with the application.

Personalized Labels

Proposed rule 4.29 clarifies TTB policy on “personalized labels,” labels on which certain changes may be made without having to resubmit the label for TTB approval.  The personalized label may contain a personal message, picture, or other artwork specific to the consumer, such as for a wedding or anniversary.   The COLA applicant must submit a template for the personalized label with a note as to the specific information that may change. Changes that discuss the wine itself, the alcohol content, or that include information inconsistent with the provisions of TTB regulations or other applicable law are not permitted.

Alteration of Labels

Proposed rules 4.42 and 4.43 describe, in detail, the circumstances when proprietors of bonded wine premises, importers, and certain others may relabel a wine product without obtaining separate permission from TTB for the relabeling activity.  In all cases, the new label must be covered by a valid COLA.  Industry members who would be affected by these rules are encouraged to thoroughly review the relevant areas of the proposed rules.  TTB seeks comments on whether they will protect the integrity of labels in the marketplace without imposing undue burdens on the industry.

Mandatory Label Information – Packaging

Proposed rule 4.62 clarifies the requirements for open or closed packaging.  Packaging such as a covering, carton, case, or carrier used for sale at retail (not shipping cartons) that require a consumer to open, rip, untie, unzip, or otherwise manipulate the package in order to view any mandatory information on the bottle is considered “closed packaging” and must include all mandatory information required to appear on the label.  If a consumer could view all mandatory information on the container by merely lifting the container up, or if the packaging is transparent or designed such that all mandatory information can easily be read by the consumer, the packaging is considered “open” and may display any information not in conflict with the label on the container inside the packaging.

TTB seeks comment on the following three points:  1) whether it should require mandatory information to appear on open packaging when part of the label is obscured; 2) whether the proposed rules will require significant change to labels, containers, or packaging materials, and 3) whether the proposed revisions will provide better information to the consumer and make it easier to find mandatory information on labels, containers, and packages.

Prohibited Practices

TTB proposes to break this section into three parts:

  1. Restricted Labeling Statements

Proposed rule 4.87 loosens the restriction on using vineyard, orchard, farm, or ranch names.  Current practice allows these names in the brand only if at least 95 percent of the wine was produced from fruit grown on the named property. If used as a trade name in the bottling address, the proposed rule will allow the name as the brand even if no grapes are grown on the property or even if there is no such property with that name.

Proposed rule 4.90 makes five changes to the current law relating to “multistate” appellations:  1) removes the requirement that the states be contiguous; 2) reduces the minimum percentage of grapes from the states named in the appellation from 100% to 85%; 3) removes the requirement that the percentage of the wine derived from grapes of each state be shown on the label 4) adds the requirement that the percentage of wine derived from grapes of a named origin be greater than the percentage from an unnamed origin; and 5) adds the requirement that the states be listed in descending order according to the percentage of wine derived from grapes grown in those states.

While proposed rule 4.90 appears to allow “multistate” appellations for noncontiguous states, proposed rule 4.135, prohibiting misleading references to the origin of wine, appears to contradict this rule. It explains, a wine made from grapes 50% from New York and 50% from Virginia would be ineligible for a multistate appellation because the states are not contiguous.  TTB was unable to be reached for clarification in time for publication of this article.

  1. Prohibited Labeling Practices

In The Grapevine Magazine’s September 2017 issue, the article “Where Never Is Heard A Disparaging Word… Until Now” described the U.S. Supreme Court case, Matal v. Tam, wherein the Court ruled the Trademark Office could not refuse registration of a trademark considered disparaging to a group of people. The Court reasoned that registration of a trademark was not “government speech.”  Further, it was concerned if it were to hold otherwise, “other systems of government registration could easily be characterized in the same way.”  Thus, the article suggested TTB restrictions on COLA registrations containing “disparaging” content were likely unconstitutional under Tam.

TTB seems to agree.  The language of former rule 4.38(f), incorporated into proposed rule 4.56, omits reference to disparaging content.  Further, the proposed rules indicate Industry Circular 1963-23, “Use of Disparaging Themes or References in Alcoholic Beverage Advertising is Prohibited” was not incorporated into the proposed rules.

However, proposed rule 4.103 says, “[w]ine labels… may not contain any statement or representation that is obscene or indecent.”  On December 15, 2017, the U.S. Court of Appeals for the Federal Circuit decided the case In re Brunetti, finding that in light of Matal v. Tam, the Lanham Act’s bar on registration of “immoral or scandalous” marks was unconstitutional, as well.  Whether TTB has not yet determined the applicability of the In re Brunetti decision or will continue to deny COLA registrations containing “obscene or indecent” material until challenged in court remains to be seen.

  1. Labeling Practices Prohibited if Misleading

This subpart generally prohibits any statement or representation, irrespective of falsity, that is misleading to consumers as to the age, origin, identity, or other characteristics of the wine (see proposed rule 4.122, for example).

Proposed rule 4.124 prohibits false or misleading statements that disparage a competitor’s product. The rule does not preclude expressions of opinion, such as “We think our wine tastes better than any other.”  By contrast, a statement like “We do not add arsenic to our wine,” although truthful, would be considered disparaging because it falsely implies other producers do.

Proposed rule 4.126 eliminates the blanket prohibition against the use of the American flag or symbols of the U.S. armed forces, provided the usage does not create the impression of an endorsement by, or affiliation with, the governmental entity represented.

Proposed rule 4.127 retains prohibitions against simulated government stamps, but only if the usage is misleading.  TTB seeks comments on whether there is still a need for regulations on this issue.

Proposed rule 4.128 prohibits wine labels or packaging from containing a statement, design, or representation tending to create a false or misleading impression the wine is or contains a distilled spirit or malt beverage.  While statements about aging wine in barrels previously used in the production of distilled spirits are acceptable, statements implying the product contains distilled spirits (such as ‘‘bourbon flavored wine’’) are prohibited as misleading.  TTB solicits comments on whether the proposed rules adequately protect consumers and whether they will require changes to existing labels.

Proposed rule 4.211 allows bottlers and importers to provide  TTB or customs officers with COLAs in photocopies, electronic copies, or records showing the TTB identification number of the approved COLA, rather than an original paper copy.

Dessert Wine

Without proposing a new rule, TTB requests comments about the designation “dessert wine.”  Current rule 4.21 requires a dessert wine to be 14-24% alcohol.  While rejecting applications for dessert wines below 14%, TTB has approved COLAs for such wines stating “may be served as dessert wine.”  Because many consumers associate dessert wine more with the level of sweetness than with alcohol content, TTB requests comments from the public as to: 1) the use of “dessert wine” as a designation of alcohol content; 2) whether there is a more appropriate term for wines containing 14-24% ABV; 3) whether “light” wine to indicate alcohol content is consistent with industry and consumer understanding, and 4) whether the term “natural” wine is understood by the industry and consumers as being a wine with no added brandy and, if not, how the term “natural” is understood in relation to wine.

Citrus Wine

Proposed rule 4.145 incorporates all citrus wines into the category of fruit wines, eliminating citrus wine as a separate class.  TTB requests comment as to whether this change would require the change to any existing labels.

Providing Feedback to TTB

TTB’s proposed rules involve many issues and details not summarized above.  If you would like to provide feedback to TTB on one or more issues, the entire 132-page document can be found here: https://www.gpo.gov/fdsys/pkg/FR-2018-11-26/pdf/2018-24446.pdf.  To submit your feedback, you may use the online comment form here: https://www.regulations.gov/comment?D=TTB-2018-0007-0001 or via U.S. Mail to the Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005.

Brian Kaider is a principal of KaiderLaw, an intellectual property law firm with extensive experience in the craft beverage industry.  He has represented clients from the smallest of start-up breweries to Fortune 500 corporations in the navigation of regulatory requirements, drafting and negotiating contracts, prosecuting trademark and patent applications, and complex commercial litigation. bkaider@kaiderlaw.com (240) 308-8032

What is a Winemaker? (Part 1)

Cyndi

By Thomas J. Payette, Winemaking Consultant

A winemaker is a person that is engaged in the selection and growing of a perishable raw material that is made into a perishable fermented product containing alcohol.  This simplistic statement just begins to state one’s duty as a winemaker.  In reality a winemaker is so much more.

The descriptions provided below are not fitting for all winemakers but perhaps the majority.  As corporations have become prominent in the wine industry, some of these duties are eliminated or minimized; yet, most of the people holding corporate winemaking titles have come up through the ranks of hard knocks.  Few excel in this profession without dragging hoses first and planting vines with their bare hands before sitting at the cushy, but very demanding, blending table.

In most cases, the winemaker is the general manager of sorts for many operations.  Successful winemakers often need to be well-rounded to rise to the top of their game.  This includes knowledge as an apprentice, farmer, chef, wine chemist, orchestrator, cellar logistics coordinator, master blender, investigator, people person and marketing guru.

Many winemakers are rugged, yet, refined.  Sensorially “in touch” not only through their palate and nostrils but also through their other senses.  They are also spatially cognizant and proficient in material handling either gently, as done more today, or otherwise.  At crush and bottling many winemakers become logistic coordinators.  Many know how they want something done and that one must roll their sleeves up to get that job done properly.  Harvest happens once a year so winemakers often only get near forty chances in their lifetime at making wine each year.  Winemakers must work exhaustingly hard and make the absolute most out of each vintage.

Apprentice

The winemaking industry still requires much from an individual.  Aspiring winemakers often find themselves in need of hands-on training even after their academic degree (or degrees) are completed.  Many will find this out from other winemakers who have worked under other seasoned individuals.  Many will have to work hard to prove to the mentoring individual, they care to learn from, that they are indeed worthy of being taught.  A friendship and professional teacher/student relationship will be built and at the appropriate time key (“missing information”) will be passed forward to the next generation.  Few professions are still built on this principal and future winemakers are encouraged to press forward through this often-frustrating process.  Work hard, ask questions and prove worthiness to any winemakers you seek to emulate.

Farmer

Winemakers are best suited when they understand the product they are making from the fruit forward.  It takes a great raw material, in all cases, to make a great product.  With farming knowledge, one knows to study items such as the depth and make-up of the soils they are growing their plants on and in.  Knowledge of soil moisture, water holding capacity and any potential need for drain tile, irrigation or both should come into play when trying to produce a premium product.  Few growing sites are perfect, on their own, but they do exist.  One needs to know the physical and chemical make-up of the soils and how to adjust or condition those soils to provide the best of what is needed for those plants to produce the fruit desired.  Some identify ions in the soils and how those interact in the soil while breaking down and allowing the plant to absorb them.  If the farmer applies lime to change the pH – how does that affect the chemical make-up of the overall soil and the plant’s ability to absorb what is needed?  Will the minerals become out of balance directly or indirectly affecting the plant and its fruit?

With the soils one should match those soils and potential above ground climates with the proper rootstock and scion plant wood if dealing with a vinifera plant.  With these considerations, the winemaker is also affecting what style of wine he/she may want to make.  If one has a certain desired flavor or style – this is the time to target that flavor profile and make selections that support that goal.  Taking the climate above ground and looking at frost issues in the spring and fall will become important in selecting the plants.  Areas with late spring frost will most likely guide one toward plants that bud out later in the spring.  This decision will be coupled with winter low temperatures if in an area that may experience lows in the range to damage the plant.  This can be a fine line as some insect pressures and diseases are minimized with appropriate low temperatures over the winter months.

Once the plants and soils are chosen, one will need to look, again, at the desired wine style and then decide on a training system for the plants.  These decisions, as well as all decisions, will be in conjunction with the complete team to adapt the plants growing with the climate, the physiological predicted growth of the plants, vigor estimates, equipment, spacing, harvest mechanisms, orientation, prevailing winds, and micro-climate issues.  After looking at these broad range items one may need to decide if leaf pulling will be used.  Shoot positioning and canopy management will be questions to address.

Much of the above will be decided and handled in the field with handsful of soil while “kicking rocks in the field”.  So much determines what the end product will be from the raw material, growing conditions and ability to affect the maturation of the fruit that will ultimately be the foundation for the finished wine(s).

Chef / Artistic Talent

Being a chef takes a lot of talent on many levels.  Smell, aroma, mouth-feel consistency, finesse and timing all come into consideration.  As I remind many wineries “never forget the wine glass”.    Winemakers must take the complete set of chemical data and taste the wine to make decisions for that wine.  The future of that wine must be known as a direction for the winemaker.  One can not just make wine on chemistry alone.  A wine that has the textbook perfect alcohol, pH, sulfur dioxide, titratable acidity and color is nothing if it tastes bad.  The same is true if the wine develops a nasty protein haze while in the bottle.  A winemaker must balance the flavors of the wine using knowledge from the wineglass combined with the knowledge of the laboratory.  This balance takes experience many will only gain from their protégé as an apprentice.  No, we exercise our artistic craft!

Wine Chemist

Along with our artistic craft great winemakers once again find themselves back in the vineyard all through the year, but now more than ever, looking at the condition of the fruit hanging in the field waiting for the anticipated call to “pick”.  So much goes into this part of the process because one will not be able to go back in time after the grapes are harvested.  Samples will be taken to judge the chemical aspects of the fruit and the winemaking and vineyard team will sample grapes.  Much data is collected from this time as the group will taste and record flavors and profiles for given blocks of vines to determine what, when and where grape maturity matches the wine hoped to be made.  The decision is critical; yet, more easily made if all persons are in touch with previous years, that particular block and the wines made from that block in past years.  This is experience and sharing it, as a team, will be of most benefit from here forward.  Great winemakers are often able to select the fruit and target a wine style from taste and chemistry.  They are able to ascertain what will happen from harvest forward and to make reasonably predictable assessments on each production step forward and how that may be slightly altered to give desired goals in the resulting wine.

During these sampling times we will look at the chemistry of the fruit, the skins of the fruit, taste the flesh of the fruit, look at the seeds, taste the seeds, physical components of the seeds, the plant canopy and the plant condition itself, the fruit condition, tank space in the cellar, other harvests, fruit handling at the crush pad and weather.  Questions for reds become:  Will it be best to let these hang, gather intensity, allow the pH to rise, flavors to mature and possibly add a touch of acid at crush or go for a leaner style and harvest now with reduced skin contact time?  Whites may go: Should we harvest sooner, place the grapes in the refrigerated box over night, chill, and whole cluster press first thing in the morning or wait and try some skin soaking in bins and the press after 5 hours cold soaking?

What yeast will we use?  What characters of this fruit do we care to enhance?  Will a malo-lactic fermentation balance the product and achieve a microbiological stability we want?  Will we barrel ferment this product?  How long and where will we age this product?  Will we need to protein and cold stabilize this product?

Orchestrator

There are few winemakers that can get through a crush or bottling without becoming slightly rattled at the chaos whirling around from time to time.  Most have enough knowledge of their operations to be able to shift one thing to cover another.  Often these shifts afford a “win – win” situation that can be particularly gratifying.  It becomes quite a balance when one grower needs to pick and is able, the fruit supports it and the field that should have been picked is having troubles with their harvester or crew.  One may shift within seconds to give another the nod of approval to harvest.  Predictions are always made, well in advance, with the knowledge certain stopgap measures might have to be implemented.  Much communication, confidence and patience are needed at this time.  The crush pad staff needs to know what quality and type of fruit is arriving in order to designate tanks and to “control” chaos.  How many tons are expected?  Historically how close has this grower and the team been able to estimate this vineyard?  A ten- percent overage could completely shift the dynamics of the cellar.  Can we still bring in the tonnage needed and still have the night crew get their jobs done?  Our stainless steel and liquid vessel holding capacity limits us.

(Part 2 will run in The Grapevine Magazine March/April 2019 Issue)

Pruning Techniques and Tools

Cyndi

By Robin Dohrn-Simpson

Between last year’s harvest and the new growing season lies a gnarled mess of grape vines. The plants rested during the winter and are ready to begin their new growth cycle. First, however, the dormant plants will need pruning. For vines young and old, pruning is the key to managing canopy, fruit quality and growth.

“One of the most important vineyard practices a vineyard owner must accomplish every single year is dormant pruning. Pruning grapes aids in keeping the shape and architecture of the vine, sets the ultimate crop load for the season and encourages fruit formation for the following season,” said Michael Cook, Viticulture Program Specialist at North Texas A&M AgriLife Extension Service. Cook provides research-based knowledge to members of the Texas wine industry.

Pruning, Cook said, should be done every year. “Since clusters are exclusively borne on one-year-old wood (called canes when dormant) it is critical to prune your vine–whether you are a commercial grower or a backyard hobbyist–every single season. We often remove 80-90 percent of the wood that grew the previous year every time we prune,” he said.

Even if pruning is done each year, when done incorrectly it can adversely affect the health of the vines. Vineyard managers should ensure that they and their staff are taking the time to learn the correct way to prune their canopies.

“Improper pruning will always lead to a vine that is out of balance and more susceptible to environmental stressors and disease. Whether under- or over-cropped, the health of the vine itself and the crop for this season, as well as subsequent seasons, will be negatively affected. If this is not fixed and improper pruning occurs every season, the sustainability of the vineyard will be called into question rather quickly. Therefore it is paramount that anyone growing grapes take the time to learn and practice pruning with a mentor,” Cook said.

When to Prune

When to prune differs throughout wine regions; however, it is critical to do so at the appropriate time to avoid early bud break.

“In Texas, our greatest threat that limits when we can prune is spring frost. In other states, such as in the Central Valley of California, pruning can commence once the vines go dormant because in most areas frost is a rare occurrence. This is not the case for Texas. It is not uncommon in the High Plains, where 80 percent of our commercial wine grapes are grown (or in North Texas or the Hill Country) to see spring frosts occurring as late as Easter,” Cook said.

For growers in regions where frost is a concern, consider employing double pruning. In double pruning, vines are pruned twice during dormancy, once in late winter or early spring, and once before bud break, typically in March.

“With the first pass of rough pruning, the grower will cut each cane back to about 10 inches. This removes most of the tangled mess; and if the vine decides to break bud and there is a frost, only the top buds will be affected. These will be pruned off anyway during final pruning,” Cook said. “The second pass, or final pruning, occurs right before bud break. Here the grower will approach each spur position (the location where one-year-old wood is found) along the cordons and will remove all but one cane and prune the remaining cane down to one, two, or three buds. This type of final pruning is called spur pruning and is most common in Texas. While spur pruning is the most common technique, there are a few vineyards who cane prune certain varietals.”

While double pruning is a useful tool that can reduce the risk of frost damage, Cook told the Grapevine Magazine it does not guarantee protection from it.

Pruning Techniques & Error Management

One of the greatest fears of a new grower is pruning too severely or not enough. Often is it better to prune too much, since heavy pruning promotes good fruiting. However, Cook suggests balance and consistency to quell any worries.

“For each spur, the grower has to decide which cane he or she will keep and then prune down to one, two, or even three buds. For weak spur positions, only one bud will be retained for that season. A healthy cane, often around pencil size in diameter, can support two buds. Under vigorous conditions where a cane is larger than ‘Sharpie size,’ we will often leave three buds. It all boils down to balance. If done properly, the following season the new canes will be pruned to two buds,” Cook said.

For growers who aren’t sure what to do, or think they’ve made a mistake,  reach out to a local extension office for guidance.

“One of the great things about cultivating grapes is that they are often very tough and resilient. If you make a mistake, it is important to correct that mistake as soon as possible. Fortunately, mistakes are usually easily corrected. If a mistake was made and the time to prune has passed, multiple canopy management practices can be conducted–such as shoot thinning and fruit thinning–which can be used to keep a vine in a healthy and sustainable balance,” said Cook. “The best way to know if you have made a mistake and how to correct it is to attend one of our hands-on workshops. Each of the four growing regions of Texas has an Extension Viticulture Program Specialist like me who can help you.”

To keep the vine healthy throughout the process, continual sanitation and use of fungicides will keep vines healthy.

“During the pruning process, it is advised to routinely sanitize pruning shears to help prevent the spread of disease, such as grapevine trunk disease. Additionally, once the vine has been pruned it is advised to spray specific fungicides within 24 hours to protect the recently made wounds on the vines,” said Cook.

Training a Vine

Vine training takes approximately three to four years. In the first year of planting the focus is on creating a strong and straight trunk as well formation of roots. In the second and third year, the focus is on incremental cordon establishment; these cordons will bear the crop every year. It is strongly recommended to remove all fruit from the vines during trunk and cordon establishment since it will compete with root and shoot formation. A partial crop may be possible in the third year.

“Once the cordons have become fully established, the vineyard is considered mature, and that is when double pruning will be initiated. It is important to note that while the trunk is often considered a permanent structure, unless diseased or damaged, the cordons should be removed and retrained every 10-15 years to rejuvenate production,” Cook said.

Using Proper Tools

Using quality tools saves both time and potential body overuse. FELCO has been manufacturing vineyard management tools for roughly 75 years. Their mission is to offer innovative and durable solutions to commercial pruning and cutting markets.

FELCO offers electronic pruners that have for years been quite popular in Europe, Australia, South Africa and even niche markets like South Korea. In recent years, faced with a growing labor shortage, these electronic pruners have become popular among U.S. vintners.

“The U.S. market so far has been blessed with very inexpensive farm labor when compared to a country like France, for example. More and more growers in the United States are seeing the solution to labor issues as well as being able to bring more women into the workforce with this product. It requires no effort to use and can dramatically improve efficiency and job quality,” said Ryan Amberg, Brand Manager of PYGAR, a subsidiary of FELCO.

The versatile FELCOtronic tool line can be adjusted depending on vine width and size. Workers can change the head opening by accessing the portable control box, allowing the sheers to cut vines up to two inches in diameter, making it, according to Amberg, an ideal tool for orchards as well.

FELCO offers a large variety of shears to fit different size hands and different dominant hands. “When doing fine pruning, you should always have the blade in the right position in comparison to the bud. If you are left-handed using a right-handed pruner, this can be difficult to achieve. With a left-handed pruner the ergonomics are proper for prolonged use,” Amberg said.

The blades of FELCO’s pruners are made from high quality proprietary high carbon steel. “We have a clear vision to be the premier product. To do this, it means we must cater to our customer and their needs and applications. Our blades are one of our key strengths along with our lifetime warranty on all forged aluminum parts. You can have a FELCO and keep it for multiple generations. They can rust, but will hold a much better edge than something in stainless steel which tends to wear much faster.”

FELCO tools are easy to maintain. All that is needed is light oil, hydrophobic grease and a sharpening stone. With these three items, you can keep a tool working like new for many seasons. Find FELCO products at nurseries, agriculture supply retailers and online at FELCO.com.

As with every growing season, pruning is just the beginning of an exciting new time. Bill Schweitzer of Paccielo Vineyards in Ramona, California certainly believes that, and hopes others remember as well. “Pruning is our chance each year to create great wine in the vineyard. If we watch what the plants do naturally, and guide them to do what we want, they will turn out great. Remember, the grape is a weedy vine; it has strong roots and the strength to grow to the top of the nearest tree. It is hard to make a mistake. The vine will grow around it.”

Tips & Best Practices for Wildlife Control in the Vineyard

Cyndi

Few things frustrate vineyard operators more than producing healthy grapes only to have them eaten by pests. Small insects are a significant cause for concern, but larger animals often put delicate grapes at risk as well. This article will discuss the topic of wildlife control in the vineyard and the various ways that vineyards can effectively and humanely deter wildlife to protect their valuable grapes.

Wildlife That Impact Vineyards

Matt Doyle of Doyle Vineyard Management in Hammondsport, New York told The Grapevine Magazine that the most common pest problems that occur in the Finger Lakes region are deer, birds, and turkey. A premier Finger Lakes region grape grower, Doyle Vineyard Management also offers full-service vineyard management services and sustainable vineyard programming.

Meanwhile, in the Sebastopol, California area, Rick Williams of Harmony Farm Supply & Nursery said most of the wildlife issues that plague vineyards in this region are gophers.

“Most of the problems that they cause are with new plantings, whereby they will eat the tender roots of new plants,” Williams said. “Established vines have such an extensive root system that the gophers don’t generally pose a serious threat. The holes that they dig cause issues within the vine rows, creating soft spots that tractors and other vehicles traveling down the vine rows can sink into.”

Williams said that rats and mice climb vines to feed on the berries. “Most other problems are from coyotes that come into the vineyards and are digging after the gophers because they dig large holes,” he said.

According to Williams, birds also cause a significant problem in vineyards when they eat the berries as they mature. Wayne Ackermann of the Wilsonville, Oregon-based Bird Control Group told The Grapevine Magazine that the type of birds that cause damage and financial loss to vineyards largely depends upon the location.

“On the west coast, we tend to see most damage caused by starlings and blackbirds,” Ackermann said. “On the East Coast, cedar waxwings and robins tend to be the issue, but in all regions, there are many birds attracted to the sweetness of the ripening grapes.”

Not only can wildlife pests eat the grapes and gnaw on the roots and trunks of grapevines, but they can also cause other significant types of damage as well. For example, wildlife pests can damage irrigation systems, cause erosion, and leave bacteria and fungus on grapes from their fecal matter. These behaviors cause contamination, bunch rot, and off-flavors in the final product.

Wildlife Control Solutions for Vineyards

Fortunately, there are many ways to prevent and control wildlife through vineyard management and safeguards. There is rarely a one-size-fits-all approach to wildlife control, so vineyard owners should consult with pest control experts in their local area for advice.

Deer in the Vineyard

Deer tend to enter vineyards early in the year to graze on young shoot growth, which can destroy a vineyard’s training system. Deer can also be a significant nuisance when it comes time for harvest. It is best to use deterrents before the animals have discovered the potential food source.

Sunni Ashley, co-owner of Vineyard Industry Products, and said that deer, pigs, and bears are best controlled with fencing. The company has stores in Windsor, Paso Robles and Los Alamos, California carrying a variety of wildlife control products for vineyards. Their products include barbed wire, bird netting, mylar tape, traps, grow tubes and, of course, fencing. Fencing that extends six to eight feet high and made of woven wire can be installed to deer-proof a vineyard.

“Deer require at least six feet of fencing, but depending on the area, you may need to go higher,” Ashley said. “You can add two strands of high tensile wire at the top to get to seven feet. For pigs, putting the barbed wire along the bottom and connecting it at each stake (and sometimes another stake in between the standard fence posts) helps.”

Meanwhile, physical barriers, such as grow tubes and mesh vinyl screens, can be placed to protect young vines. In some regions, vineyard owners can obtain deer damage permits to hunt deer that cause substantial damage to crops and to reduce the population outside of the established hunting season. Odor repellents can be useful for deer control, acoustical repellants can scare away both birds and deer, and dogs can be trained to deter deer and protect vineyards too.

Doyle uses many of these options to keep deer from his vines. “The ways we control [deer] are utilizing fences for severe deer pressure, pig blood spray to deter deer from eating the vines, and having people fill out NYSDEC deer nuisance permits. We use Plantskydd deer repellent sprays on newer vineyards,” he said.

Rodents in the Vineyard

Many pest control and vineyard management companies use traps and baiting to control wildlife, mainly gophers. It is recommended to set many traps, note the location of gopher mounds, and place bait in the pests’ underground tunnels.

This process requires a substantial amount of patience and effort, which is why fumigation may be used simultaneously to control gophers and other rodents using aluminum phosphide in the late winter and early spring with moist soil. Other wildlife control solutions include bringing in barn owls to help control field mice, voles, and gophers. Nest boxes in the vineyard help owls set up habitats to accomplish this type of rodent control.

Williams of Harmony Farm Supply & Nursery said that they “carry a variety of traps to kill the gophers.” He also said they do not have cost-effective organic rodent deterrents for large-scale application.

Birds in the Vineyard

Birds often pose late-season threats to vineyards, especially for those in a migratory pathway. Bird control is typically a point-of-contact effort, with netting and scare devices among the most common deterrents.

“For birds, we typically use BirdGard brand devices to deter birds, bird bangers, or occasionally net varieties that have heavy pressure. We have no real control measures for turkey, but they cause minimal damage compared to the deer and birds,” said Doyle.

Netting is a popular choice among vineyard owners, although bird nets can be a hassle to put on and later remove. Over-the-row netting is often used in vineyards to cover large surface areas. These nets are made of nylon, plastic, cotton, polyethylene, or a lightweight acrylic material to drape over plants. Netting can be a costly investment for a vineyard, but a quality net lasts several years.

Scare devices such as motion-activated water sprinklers and electronic scarecrows are also typical.

Bird Control Group is the world leader for laser bird deterrents and bird repellent solutions that have proven to decrease bird nuisances by over 70 percent. The company offers a fully automated bird repellent system that effectively scares away birds by projecting a laser beam towards them. The birds perceive the laser as a danger and fly away. It’s a one-time investment that does not harm the animal or the environment, and it has patented safety features to eliminate potential hazards.

Bird Control Group initially targeted commercial blueberry growers in 2017 because they do not have the option of netting and often depend on expensive falconers for bird control. After immediate success providing an effective, cheaper solution, the company ran two experiments with vineyards that same year in Petaluma, California and the Willamette Valley in Oregon. Both vineyards saw great success and saved on labor.

“In 2018, many vineyards incorporated our laser technology in California, Washington, Oregon, Texas, Nebraska, New York, Rhode Island, and New Jersey,” Ackermann of Bird Control Group said. “We have also seen our sales aggressively grow with vineyards in Australia and Chile, as their season is just getting going. The lasers are a very good tool, and the trend is for customers to return for additional units and also send their friends to us. We always say that farmers vote with their wallet, and when they return to buy more lasers, we know it’s doing something well for them.”

Ackermann of Bird Control Group reminds vineyards there is no silver bullet and that vintners should incorporate methods that fit into their current pest management strategy. Noisemakers, netting, and Falcons all have their successes, but they can also create challenges with neighbors, become labor-intensive, and drain a vineyard’s budget.

“Our lasers aren’t a 100 percent cure, but they do work well and provide a large amount of control,” Ackermann said. “The key advice, I would say, is to start early. Your best success is to keep birds out of the vineyard and not let them get a good taste of the fruit. Just like other measures of a good IPM Program, prevention is always easier than eradication when farming.”

To comply with the Federal Migratory Bird Treaty Act, vineyard owners should check the local and state laws before controlling any bird species. This act protects all birds aside from pigeons, starlings, and sparrows; however, local ordinances may vary from place to place.

Organic and Natural Wildlife Control

For a more natural approach to wildlife control in the vineyard, adding plants is a simple, humane, and proactive way. Aromatic deterrents are ideal for rabbits and deer because both are sensitive to smells. Marigolds, for example, can be planted at the end of vineyard rows to deter rabbits. Vineyard operators can plant strong-smelling herbs such as tansy and artemisia near the vineyard. Culinary herbs, like mint, thyme, oregano, chives, sage, rosemary and dill have a similar effect.

These methods play into the strategy of biodiversity within a vineyard and may be more of a priority for organic winegrowers. Organic strategies typically revolve around creating habitats for beneficial animals and plants that are native to the region, as well as utilizing integrated canopy management and vine balance to keep the fruiting zone aerated, equipped with enough sunlight, and with the right amount of nutrients and water.

Pest Prevention and Monitoring in the Vineyard

Proper planning and preparation go a long way in keeping unwanted animals out of your vineyard and away from your grapes. In all seasons, it is critical to monitor the vineyard for large wildlife pests. Control strategies should be implemented at the very first signs of pest activity.

“The best way to monitor the vineyard for wildlife pests is to regularly walk the vineyard and inspect for evidence of these pests,” said Harmony Farm Supply’s Williams.

Ashley of Vineyard Industry Products and her team advise vineyards to keep gates closed, check around the perimeter daily for pests, and keep fencing in good repair. “Check for holes and damage in your bird netting prior to installation, install at the appropriate time, and secure it under the canopy properly,” she said.

Doyle of Doyle Vineyard Management emphasized that to have decent yields on grapes, you need to have some way of keeping the wildlife off the vines. “They can cause severe economic damage on some types of grapes,” he said. “In the Finger Lakes, it does seem that the pressure from these pests can vary greatly from one year to the next.”

Waterloo Container Will Be At Upcoming Trade Shows

Cyndi

FOR IMMEDIATE RELEASE
February 25, 2019

Contact: Bobbi Stebbins
Telephone: 315-539-3922  ext 47
Email: bstebbins@waterloocontainer.com
Website: Waterloocontainer.com

Waterloo, NY, February 25, 2019– Waterloo Container is pleased to announce that we will be showing off our packaging and product options at several upcoming local and national industry trade shows.

National Tradeshows give Waterloo Container the opportunity to reach out to a wider circle of potential clients, and to learn about what is trending in the industry. This helps us decide what to add to our own bottle portfolio.  Members of our team have also attended classes at shows to improve knowledge of the industry and make valuable connections.  This year, Waterloo Container can be found on March 19-21st at Booth #512 at the Eastern Winery Exposition in Syracuse, NY.  We will also be focusing on the craft beverage industry at the Craft Brewers Conference in Denver, Colorado April 8-11.

This year’s Eastern Winery Expo boasts more than 230 industry vendors and suppliers under one roof. According to the EWE website, there will be 46 speakers and 35 workshops and conference sessions this year at the OnCenter.  The show is designed for equipment purchasing, wine tasting, meeting the experts, socializing, and sharing wine, knowledge, tips & techniques.  In between sessions, Waterloo Container meets with attendees and customers to show off new wine glass products and services like their popular UV ink glass printing and new high speed shrink sleeving.

At the Craft Brewer’s Conference, Waterloo hopes to expand their presence in the ever-expanding market of craft beverage packaging.  The CBC is America’s largest craft brewing industry gathering, with over 13,000 attendees and 800 exhibitors.  Beer, Spirits, Ciders, and Meads are just some of the products discussed and highlighted by the program. Waterloo Container will present a tailored selection of glass bottles appropriate for this market.  New sparkling (pressure rated) bottles will be showcased along with the classic amber craft options.  George Hall, Sales manager at Waterloo Container says “Trade Shows are a great environment to engage in an open packaging dialogue with existing customers or get introduced to a future customer to collaborate on their plans to grow”

Smaller, local tradeshows allow vendors to meet one on one with our current and future clients.  Attendees can put their hands on the bottles and get valuable information about our many value-added services and packaging options.  Cornell Cooperative Extension sponsors two shows in our region this year, including the B.E.V. NY show at the RIT Conference Center (Feb 27-Mar 1) and the Finger Lakes Craft Beverage Conference at Del Lago on March 26th.  Waterloo container plays important sponsor roles at each event.

“Each show has a unique clientele and atmosphere” says Waterloo Container Marketing Director Bobbi Stebbins.  “We adapt our display, staff and featured items specifically for each show in hopes of introducing current clients to new products, and to acquaint prospective customers with our company values and products in general”

About Waterloo Container: Waterloo Container is a family-owned and operated business started in 1980 by Norm and Bill Lutz to support the burgeoning wine industry in the Finger Lakes of New York and on the East Coast.  Today, we offer an extensive selection of glass wine and spirits bottles manufactured right here in the United States.  We also stock and source many imported wine, spirit and specialty bottles.  Our vendor partners have been extremely influential in our success and we are proud to work with the best in the industry for glass, corks and closures.  We offer a personalized packaging program that includes services like eight color UV ink glass printing and high-speed shrink sleeving.   We also provide in-house repacking, quality select and warehousing for our customers and employ our own fleet of trucks and skilled drivers. We take pride in being a reliable provider of the highest quality glass containers and packaging products available. We are proud to have been an integral part of the wine and craft beverage industry’s growth in Eastern North America. We look forward to continuing to grow together over the years to come. Visit our website at www.waterloocontainer.com  today!

What Wineries Should Know About Labels, Printing, and Bottle Engraving

Cyndi

By Alyssa Ochs

In the wine industry, a label is much more than a sticker on the bottle identifying the brand. Rather, a label is an opportunity to tell consumers about your winery, the intricacies of a particular type of wine, and to highlight its character and quality. That is why it’s so important to put as much time and thought into what’s on the outside of the bottle as what’s inside.

The Importance & Basics of Wine Labels

The importance of effective label printing is to differentiate your product from other wines and help it stand out in the competitive market. Labels provide valuable information to consumers about the winery’s location, tasting notes and alcohol content. In the U.S., labels must also adhere to and be compliant with Alcohol and Tobacco Tax and Trade Bureau standards.

To best serve consumers, wineries must consider temperature change, moisture and humidity when choosing label materials. Increasingly, wineries are choosing labels that are eco-friendly and sustainably sourced using biodegradable polylactic acid film, tree-free label stock made from bamboo or sugar cane, or FSC-certified paper.

Sara Nelson, president of Sara Nelson Design, told The Grapevine Magazine some designers stick strictly to art, while others, with more training and broader experience, can help wineries figure out how to visually express their brands.

“Depending on the research you read, from 50 percent to 75 percent of wine buying decisions are made based on the label. Your logo and label have a job to do: sell wine,” said Nelson. “To that end, whether you prefer flowers or animals on labels or whether you like blue is just one small consideration. A designer with experience in the wine industry should also be very familiar with TTB rules, regulations and policies. They should also be helping you to make sounds decisions that help both maximize revenue and minimize cost. That means attention to your competitive situation – anticipated price point; production; how you plan to bottle and label; and where and how it will be sold.”

Printer Options for Wineries

For wineries with in-house design teams or with the ambition to make their own, there are several printers in the marketplace capable of printing professional-looking labels. Options include both laser and inkjet printers, as well as flexographic label presses to transfer images onto labels for large runs of custom labels. Digital label presses are often ideal for small wineries, small batches and short-run labels. For all wineries, the primary considerations when choosing a printer are size, capacity and cost.

One option is the Kiaro! QL-120 inkjet label printer, which offers flexible printing options and speeds that can produce thousands of labels per hour. Meanwhile, some wineries choose to print and apply their labels with LX-Series Color Label Printers and AP-Series Label Applicators.

However, Nelson advises that the quality of DIY labels may not stand up to the expectations of the winery or the consumer. “It seldom makes sense for a winery in a competitive situation to design or print its own labels,” she said. “Very few consumer-grade printers can print with enough consistent precision or use materials necessary to compete with commercial print companies that specialize in beverage labels. Even if the hardware were available and affordable, consumables (ink or toner) can be atrociously expensive and not easy to source.”

 Kevin Crimmins, the director of strategy and business development for The Label Printers in Aurora, Illinois, told The Grapevine Magazine that the best technology for wineries is dependent upon what considerations and needs a winery brings to its printer.

“The dominant technology in label printing for a long time, whether for wine or really any bottled product, has been flexography,” Crimmins said. “Flexographic printing technology is well-suited to label printing due to its ability to efficiently imprint a high volume of identical images and complete the other steps necessary to produce finished labels with minimal handling and reliable consistency.”  However, Crimmins pointed out that digital printing technologies have also become widely used by wineries in recent years.

“Unlike flexography, digital technologies imprint images without reliance on plates,” he said. “This enables printers to create labels with variable images—every label can be different from all the others. Digital printing also delivers crisp, high-resolution images, and in some cases, it can enable a printer to more efficiently respond to requests for smaller quantity runs.”

David Noone of Noontime Labels in San Ysidro, California agreed that the best labels for a winery depend on the customer, product, and budget.  “We use digital presses exclusively, which provide a quality label that is very cost-effective,” Noone said. “Other printing techniques, like offset printing and flexography, do provide a bit higher quality but require much larger quantities to be affordable. Most of our customers find the differences nuanced and opt for the cost savings of digital.”

Savannah Bergin, the director of sales and marketing of Bergin Screen Printing & Etching in Napa, California, told us that her company thinks applied ceramic labels, also referred to as direct screen printing, are the most creative.

“Screen printing allows for the entire surface of the bottle to be used as the canvas,” Bergin said. “Use of a 360-degree design, shoulder and neck decoration is possible with screen printing. With other label application, that is not possible without either applying separate labels. Heat shrink sleeves would be the closest comparison, yet still not directly applied and fused to the glass.”

Material Options

When it comes to label materials, wineries can choose from paper stock, stick adhesive, and waterproof labels made with industrial materials. Wine bottle labels come glossy white, semi-gloss material, matte white, transparent or feature a cream texture parchment sticker. Another option is a transparent polypropylene label material for a “no label” look. Standard sizes include 5.5-inch by 4.5-inch labels with rounded corners and 3-inch by 5.5-inch oval labels.

Bergin told The Grapevine Magazine that paper, pressure sensitive labels, applied ceramic labels and heat shrink sleeves are commonly used by wineries today.

“Paper has been around for a very long time and is still widely used,” she said. “The alternatives have become labeling innovations in an effort to provide decoration solutions outside of paper. Everyone wants their label to stand out, and having multiple label printing options for everyone is what allows every brand to choose their own identity for packaging.”

Noontime Label’s Noone said that his customers only ask for pressure sensitive “peel and stick” labels.   “They can be printed on many different kinds of materials, from plain paper to textured estate papers, as well as vinyl and clear plastic,” he said. “They’re also available with different adhesives depending on the customer’s needs. Some of our customers recycle their bottles, so the high-tack removable adhesive is a pretty popular choice. Noone said that the “peel and stick” labels have the added benefit of being applied on an automated bottling line or by hand if needed.

“The most common materials our customers buy are the plain paper and the estate paper,” Noone said. “The plain paper is the most economical and can easily have a gloss laminate applied to make it waterproof, and the estate papers add texture for a higher-end look and feel.” Noontime Labels provides different label quantities, from 30 labels up to approximately 10,000 per label design.

Meanwhile, Crimmins of The Label Printers says for them no specific label type is more popular than others because wine branding has changed so drastically over the past 20 years. Wine labels were traditionally printed on paper-based label stock, often described as estate papers, that are suited to the high-end aesthetic for which wine brands strive.

“An equally compelling, but very different, aesthetic can be achieved by selecting one of the many plastic film-based label stocks available in today’s market,” Crimmins said. “For example, a metalized film might be chosen for its ability to give a label, or select elements within that label, a glistening or reflective effect.”

Crimmins went on to tell The Grapevine Magazine that, “It’s important to work with a professional printer who will take into consideration things like the surface onto which the labels will be applied, how they will be applied, and how the product is to be used. That way, they can help the winery make the right decisions about coatings that the material will need and which adhesive will allow the label to achieve a lasting bond with the bottle.”

Engraving Directly onto Wine Bottles

Wineries can also engrave labels and information directly onto the bottle. Engraving is typically more expensive, making it most commonly used for rare releases, special occasions, and milestone gifts. Engraved bottles offer a personalized touch that cannot be mistaken for anyone else’s product.

Laser technology, such as MAG PRO or MAG BOX, can be used for engraving, with custom and ready-to-order designs start at around $18 per bottle, plus a $75 setup fee. Bergin Screen Printing & Etching, for example, offers hand-etched and hand-painted bottle creations, providing an alternative to printing large paper wine labels for bottle sizes between 1.5 liters to 27 liters.

  Choosing the Right Printing and Labeling Strategy

After selecting a label design, assessing the number of labels needed, and determining the amount of labor that label-making will involve, wineries should be able to decide whether it’s best to print their labels or hire a printing company to handle the task for them.

Crimmins of The Label Printers emphasized that the label is what customers see before they taste, or even buy, a bottle of wine.  “Give some thought to how the aesthetic of your label will present your brand and will convey the feelings that you think your brand should evoke,” he said. “An experienced printer will have some ideas that could highlight your brand or support your aesthetic even more effectively than what you come up with on your own. Don’t be shy about asking a printer how they might enhance your label; you may really like their ideas.”

Crimmins understands the attraction of print-it-yourself devices because, after all, why pay a professional to make your labels if you can handle it on your own?    “Well, maybe I can put it this way,” he said, “I think it would be fun to plant some vines, collect the grapes, press them and go through all the steps to turn my juice into wine. Can I expect my homemade wine to be as good as the wine produced by vintners who’ve dedicated their careers to winemaking? Should I expect to make some missteps along the way in my winemaking venture? Maybe that approach is acceptable for a hobbyist. However, if wine is your business, the label really should reflect the same care, professionalism, and skill as you put into the wine itself.”

Nelson of Sara Nelson Design reiterated this point but also offered suggestions on how working with a designer can help wineries take advantage of both worlds.  “For a winery with a small budget, an experienced designer might take advantage of a printer’s collection of stock—cutting dies to save money, or they may design a label such that it can be printed on a digital press at your neighborhood print shop if you want to hand-apply them,” said Nelson. “With a healthier budget, a designer might include luscious finishes like deep embosses, holographic films and foils, laser cutting of intricate patterns, flocking, or more.”

However, Nelson said that high-end finishes are not always affordable or appropriate for winery labels.    “It may seem like a good idea to try to make a $7 bottle of wine look like $20 on the theory that it will look like a great value, but most that try it find that it doesn’t usually work out,” Nelson said. “There are times to use foil, precious metal inks, etched bottles, and such, but go carefully. Your designer should be able to help you think through the cost versus the ROI.”

Bergin of Bergin Screen Printing & Etching says that decisions of whether to hire a company to print labels, self-print labels, or invest in new label equipment depends on the size of the winery.    “When picking a label printing company, we recommend they physically visit their facility or showroom to get a feel for their portfolio of work, as well as the confidence they can produce quality results with precision,” Bergin said. “Choosing a label design and its application medium is a huge decision in the packaging phase for a brand.”

Accordingly, Noone of Noontime Labels advises wineries to take some time to think about what their needs are they can choose the appropriate printer.  “If you’ve been making wine for decades and have specific issues you’re trying to resolve or marketing goals to achieve, then finding the printer who can accomplish what you need at the price you want should be fairly straight forward,” Noone said. “However, if you’re fairly new to the business, you might not even know what you don’t know. If you think you might need a little ‘hand-holding’ and special attention, you need to make sure the printer you choose is willing to provide that.

“Many companies are very willing to educate their customers and actively find solutions for their needs, while some just expect the customer to give them what they need to provide the label that they want,” said Noone. “So, you should make sure your needs match the level of customer service that the printer is willing to provide. Establishing a long-term relationship is optimal, so you won’t have to worry as much if emergencies and problems arise.”