Category: Winery Info

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.”

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)

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.”

Welcome to Fizz Club

Cyndi

By April Ingram

Over the past 15 years, international sales of Champagne and sparkling wine have strengthened. The increased sales are due, in part, to the increase in exceptional sparkling wines being made in wine regions throughout the world, including Canada. Even though Champagne remains the gold standard, with the rise in quality sparkling wines at reasonable prices, consumers no longer have to wait for a special occasion to pop open a bottle, and sales have skyrocketed.

Belinda Kemp, senior scientist in Oenology at Brock University, wanted to provide a technical foundation for the growth of Canada’s sparkling wine industry, so in 2013 she worked with Brock University’s Cool Climate Oenology and Viticulture Institute (CCOVI) to create Fizz Club.

According to the Brock University website, the CCOVI was established in 1996 in partnership with the Grape Growers of Ontario, the Winery & Grower Alliance of Ontario and the Wine Council of Ontario. They focus on assisting grape growers and winemakers to produce top quality sparkling wines. Much of the research conducted at CCOVI surrounds the affects soil types have on sparkling wine flavor, mouthfeel, and texture. Kemp works out of her “Bubble Lab,” known for its leading sparkling wine research and outreach work, culminating in an annual event called “Fizz Club.”

Fizz Club is a rare opportunity for Canada’s leading sparkling winemakers to come together and talk shop. The club is members-only, limiting membership to sparkling winemakers or wineries already underway or considering a sparkling wine program. At the event, winemakers discuss the most significant issues facing the Canadian wine industry, hear presentations on the newest research and technology, network, compare notes, exchange ideas, and of course, taste wine.

Each year, the event has grown. In its inaugural year, only a handful of Niagara wineries participated. In 2018, more than 80 winemakers stepped out of their cellars and came together in Niagara, Ontario with the goal of making Canadian sparkling wine even better. To that end, the corks of more than 130 bottles from four provinces were popped while Canadian winemakers talked candidly about sparkling wine production.

In an article in Brock University’s Brock News entitled “How Fizz Club is shaping Canadian sparkling wine,” Simon Rafuse, winemaker at Blomidon Estate Winery in Nova Scotia said, “The winemaking community doesn’t have a lot of opportunities to come together and spend time face-to-face with other winemakers across the country.  To focus in on one specific style of wine, which is one we do extremely well here in Canada, and to be able to spend the time to hear the latest research being done at Brock is a great opportunity.”

In the same article, winemaker Karen Gillis of Red Rooster Winery in British Columbia said, “It is nice to be able to be in a room where you can openly communicate with other winemakers because there are certainly some challenges that everyone faces, to have that opportunity to work that out with other people is great. We are looking to learn from our peers from across the country and share some knowledge and challenges to try to see how we can do a better job and make sparkling wine that is competitive around the world.”

Lawrence Buhler, winemaker at Henry of Pelham, has been attending Fizz Club since the beginning, telling Brock News, “The first Fizz Club was a few of us hanging out tasting wines in a lab, and now you can see how valuable something like this is based on how fast this group has grown. It is great to see people attend from across the country, including veterans in sparkling wine whom you can learn a lot from and people who are pushing the boundaries when it comes to winemaking.”

According to “How Fizz Club is shaping Canadian sparkling wine,” topics discussed at the December 2018 event included yeast strains and pétillant-naturel, also known as “methode ancestrale,” a reemerging process of winemaking where sparkling wines are bottled while they’re still fermenting. Its origins are thought to have been a mistake, with early winemakers thinking fermentation was complete and bottling their wines too soon. The result was a particularly fizzy sparkling wine.

Rafuse told Brock News, “It is great to see the efforts in studying that style, figuring out techniques and ways to make those wines and hearing from winemakers who have experience making them. Knowing where we can focus our own research, and our own trial efforts will hopefully lead to us making better wines at Blomidon Estates and across our industry as a whole.”

Rafuse and other Canadian winemakers are certainly succeeding at creating bubbles that attract attention—winning medals and awards on the world stage—leading to surging sales, nationally and internationally.

Tom Stevenson, one of the world’s leading sparkling wine experts and the founder and head judge for the Champagne and Sparkling Wine World Championships, traveled from the United Kingdom to Brock University to sample wines at Fizz Club. “I am really pleased because there are a lot of really good sparkling wines here. After the first flight I found a few potential gold and silver wines,” Stevenson told Brock News.

He hopes some of those potential gold and silver winners will participate in global competitions. “It would increase the profile of Canadian sparkling wine. We haven’t typically had many entries from Canada in the past to really see what these producers have available from a competition perspective,” Stevenson said.

Overall, Kemp found the 2018 Fizz Club to be a success and thinks Stevenson could be on to something with his praise of Canadian bubbly. “I’m so pleased we were able to showcase wines from so many wineries,” she told Brock News. “It is quite incredible to watch the progress of Canadian sparkling wines as we raise awareness of production techniques and tackle challenges with CCOVI research. This is just the beginning for Canadian sparkling wine.”

The Spirit of Alliance: Oregon’s Philosophy of Collaboration

Cyndi

By Robin Dohrn-Simpson

Although Oregon has been home to vineyards as far back as 1847, after the end of Prohibition in 1933, it needed a bit of rebuilding. It wasn’t until the 1960s and 70s that winemakers made the trek from the Mediterranean and mild climates of California to do just that, throwing their hats in the ring to grow grapes in a new and very different terrain.

It was during this time that well-known names like Dick and Kina Erath, Dick and Nancy Ponzi, Susan and Bill Sokol Blosser, David and Diane Lett and David and Ginny Adelsheim put down roots around the state of Oregon and started vineyards. Some had education and training in viticulture; some did not. Most had a pioneering spirit. It is this spirit that has seen them through the trials and tribulations of grape growing and winemaking in a new frontier.

Susan Sokol Blosser chronicles these trials in her book, “At Home in the Vineyard: Cultivating a Winery, an Industry and a Life.” In a state with no tradition in fine winemaking, she and husband Bill helped create one by taking a leap of faith, moving to Oregon without farming or winemaking experience, buying property and planting grapes. The struggle was real and took perseverance. Through trial and error, she and her husband finally harvested their first vintage in 1977.

By 1979 the Oregon wine industry was recognized at the Wine Olympiad in Paris when Eyrie Vineyards’ 1975 South Block Reserve placed in the top ten pinot noirs. In a rematch one year later Eyrie came in second, only 2/10s of a point behind the winner, a 1959 Chambolle-Musigney from Joseph Drouhin. Suddenly Oregon was a force in the wine world.

After Eyrie’s success, Oregon’s wine industry grew leaps and bounds. By 1990, there were 70 bonded wineries and 320 growers. In the same year came disaster—phylloxera—forcing vineyard owners to rip out vines and replant on grafted phylloxera-resistant rootstock. This replanting allowed Oregon growers and winemakers to rethink and resurface stronger than ever.

Collaboration

Eventually, the growing regions were separated into AVAs, and the Oregon Wine Marketing Coalition formed. All the while growers and winemakers collaborated–discussing strategy and banding together in times of need for growers and employees alike. That has never ended.

“Every wine region claims to be collaborative, but in Oregon, it’s truly a close-knit environment. I have worked in other wine regions, and this one really does feel genuinely tight–people make wine together, share equipment, come together to help each other when disaster strikes, and trade knowledge and advice. I’ve been told by several owners that when they started out, the community was incredibly supportive of them throughout the learning curve of starting a winery,” said Julia Burke, Marketing and Communications Coordinator for the Willamette Valley Wineries Association.

“I remember being impressed by the close community when I visited Oregon for the International Pinot Noir Celebration (IPNC) while I was a winemaker in California,” said Anthony King of The Carlton Winemakers Studio. “The Oregon winemakers were friendly and welcoming to those of us from out-of-state, but extremely close and familiar with one another. Now that I’ve been here for thirteen years, I know that camaraderie is true. That spirit, I think, comes from the founders of the industry, who helped each other in the beginning and have continued to help the industry through combined efforts to tell the story of Oregon wine.”

In 1999, state legislators passed HB3429, allowing multiple winery licenses on a single premise, and, in 2002, The Carlton Winemakers Studio formed. This unique facility, pioneered by Eric Hamacher, Luisa Ponzi and Ned and Kirsten Lumpkin as an incubator and home for multiple producers, is the ultimate in collaboration.

Today, Anthony King is one of the winemakers at The Carlton Winemakers Studio and consults as the general manager. When asked about collaboration at the Studio, he mentioned an ongoing project with Patrick Reuter at Dominio I, one of the first winemakers at the Studio. “In 2015, Patrick and I started a collaborative project that we named after our grandmothers, ‘Agnes and Luisa.’ It focuses on Italian varietals and is meant to be a learning experience and exploration,” said King. “We all help each other. Jerry Murray of Project M explained to someone just today that it is easier to help someone and know that you’ll likely need some help sometime later that day. I, for one, love that I can walk around the Studio with a barrel or tank sample and ask ten winemakers whom I respect what they think of it.”

Collaboration is not limited to members of the studio, however. Tim Ramey of Zenith Vineyards in the Eola-Amity Hills told The Grapevine Magazine, “I agree that winemakers are collaborative. Our annual winemaker dinner is a great example of this. We invite all of the winemakers who produce wines from Zenith, and they come and present their wines to each other where the common denominator is vintage and Zenith – the variables are winemaking and vineyard block. It is hugely informative,” he said.

“We borrow equipment. We help each other with vineyard problems. I have even harvested grapes at Seven Springs as a favor to a winemaker since in 2006 there was no one to harvest.”

Winemakers also provide feedback to one another through tasting groups King told The Grapevine Magazine.

“Most winemakers have tasting groups or cellar crawls where they visit each other’s cellars throughout the year,” King said. “One group has been tasting together for years and started https://www.cellarcrawlwines.com. Their tastings have likely helped us all to be better winemakers, as they learned from each other and then passed that knowledge on to the rest of us.”

Vintners Associations and Wine Festivals

Oregon wineries have many vintners associations and wine boards that transcend AVAs. “The Oregon Wine Board covers the whole state, focusing the efforts of AVAs across the state. That organization hosts the Oregon Symposium each year in Portland that is well attended by winemakers, cellar workers, marketing folks, direct to consumer and national salespeople,” King said. “The seminars are designed by people in our industry and each year are pertinent to our ongoing conversations. We also have a research group that reviews research proposals and allocates OWB funds to wine and vineyard research annually.”

“The vast majority of the wineries in this region belong to associations–most of them belong to several, as there are smaller nested AVA associations and then our organization and the Oregon Winegrowers Association and Oregon Wine Board and others. I have noticed a tremendous willingness to talk out differences and resolve issues as a community. Everyone has an eye on perspective and the bigger picture,” Burke said.

With collaboration also comes celebration, in the form of festivals honoring Oregon’s status in the wine world. “The International Pinot Noir Celebration is based in McMinnville and brings us together annually to showcase our wines in the context of some of the best Pinot Noirs in the world. We often find ourselves discussing and formulating seminars that we hope both the winemakers and attendees will find compelling,” King said. “The Oregon Chardonnay Celebration is similar but has not been quite as developed as IPNC, but gets better every year. Oregon Pinot Camp is probably the ultimate of collaboration in Oregon. Each year 280 sommeliers and buyers come from across the country to visit, taste and attend small, intimate seminars. Planning takes the entire year, and the seminars are in a constant state of evolution. Although not all the wineries participate in OPC, I believe that it continues to be the kindling for our industry’s collaboration. Collaboration is a regular topic of conversation with the sommeliers and buyers. They all love the collective spirit and typically one or two of them each year ends up moving here to be a part of it.”

For winemakers in Oregon, community support and collaboration are only natural, given their roots.

“Camaraderie is a part of Oregon’s culture. People are neighborly and value community over competition. Part of it is that we’re a young region. Our founders had already observed other wine regions around the world and came here with intent, and they knew that a rising tide lifts all ships,” said Burke. “Part of it is that we have one focal grape, Pinot noir, and yet an incredible diversity of sites, and it would be crazy not to share knowledge and experience with each other. I think the biggest factor is that about 70 percent of wineries in Oregon produce less than 5,000 cases, which means we trend very small. We have a lot of small producers who rely on each other, and the larger producers remember what it was like to be just getting started.”

What is a Winemaker? (Part 2)

Cyndi

By Thomas J. Payette, Winemaking Consultant

man inspecting wine

(Part 1 Ran in the January-February 2019 Issue)

Cellar Logistics Coordinator

As winemakers work through the year they are always looking three, four, even eight months ahead.  The cellar picture continues to change as each new harvest “deposit” will lend toward how and what one may want to do with each lot of wine.  Will a reserve be made this year?  With these decisions become handling logistics in the cellar.  Each white wine will either stay in stainless or go to barrel for further aging.  How long will this take place and what rate of extraction will take place this year?  Will the fruit intensity, from this harvest, be able to handle the aging?  Cellars may have up to three or more vintages in them.  Each lot of wine may need to be racked and adjusted from time to time.  Barrels and vessels must be topped on a timely basis.  Bottling schedules need to be planned and often during the harvest months; however, bottlings during harvest are never actually desired.  Often it becomes necessary to push a ready wine toward bottle at this time for the additional tank space.  Sales will affect our cellar operations and once again has us re-dipping into our toolbox to see if we can shift to make the company achieve its goals.  That may ultimately be what it is all about: A great wine that fits the company’s goals and objectives.

Master Blender

Ahh yes – The battles have been fought in the field and the cellar.  The sounds of screaming pumps and the noisy echo rhythm of the cellar are behind us for now.  We are in our haven most people visualize our lives being like.  We are winemakers and this is what people perceive to be daily experiences for us.  This is a great time to review our successes and failures for the wines.  Honestly and blindly criticizing our own products and assembling them to fit our goals and objectives.  This could take several days and we look forward to it; yet, deep down, we all know too long in this environment and we will need some physical stimulation.  We focus tightly on what we have in the cellar, review the chemistries and quantities of each lot making sample blends while looking at sales forecasts, if generated.  Can we make a reserve?  An upper level gangbusters wine?  Do we have a potential label or name for this wine?  The options go on.

Investigator (CSI)

Many of us find ourselves either very pleased with a result and wanting to duplicate it by finding areas we want to change to help get better results.  From this stance we need data.  This data will be collected all throughout our career to be referenced, hopefully, to retrieve the right component that made certain lots olifactoryly and sensorially successful.  Few winemakers are able to kick back in a chair and recall each vintage, what was done, what worked and what did not.  Others rely and can potentially be more helpful to future winemakers if they identify, in a cellar journal or equivalent, what has been successful or not.

People Person

People that like wine generally like people.  They just seem to go together.  The realities of the business also bring the challenges of production making this social beverage.  Not every day is perfect for each individual in this panacea liquid beverage making.  A winemaker may need to be a diplomat with a customer that just did not care for that type of wine.  The wine is not flawed it was just not what the customer expected.  One needs to smooth this perception in most cases to keep loyalty with that customer.  The winemaker on, the same day, may also have an issue with a supplier over a product ordered four months ago that will not be received on time due to a holiday delay or a delay because of waiting to fill a container before departing the country of origin.  Then one must decide to ship a portion by airfreight perhaps just to keep the production on time.  This makes winemakers negotiators using every ounce of communication and people skills possible.  It is, no different in a winery environment.  People skills are needed in ones every day lives no matter what they do.

Marketing Guru

People perceive our jobs as the ultimate job and our products as the ultimate product.  We go to work everyday and make a product they, and we, like to consume.  The packaging is nice, it has romance, it tastes wonderful, and it has ancient history plus mystic.  If we visibly give anyone any other idea than what they perceive we have dropped our products desirability backwards a notch or two.  We must take every chance we get to reinforce and gain ground that our products are just as romantic as they want them to be and that we are just as relaxed and easy going as they perceive our jobs to be.  We can’t expose some of our daily setbacks because after all – it really is a perfect job.  Perception is everything!  It is a panacea!

Summary

Winemakers are often, in warmer climates, seen in shorts and boots cleanly dressed in the morning kicking rocks in the vineyard; yet, potentially splattered by red wine lees by noon from cellar work. We work in the cool when it is hot outside.  Yes, our stained hands often look as though we have been changing oil for the past five years, but we wear these with bashful confidence or as renegade warriors depending on our setting.  It has been said that winemakers make nearly 2000 decisions before a wine is completely made and in the bottle.  Some of us in the trenches may say more than 2000 decisions are made with today’s advances.  We are apprentice sculptures of liquid art. There are few arts that are grown, seen, smelled, touched, tasted, absorbed and mentally alter us, as an elixir, in a positive sense.  Besides, it is also a product that is healthy if consumed in moderation.

Outside of farming and being a fermentation specialist, winemakers have a very keen source of marketing in them.  We can, will, and do sell a lifestyle by how we make our living.  From outsider’s eyes we live a dream.  From the inside view we live a dream.  Deep down everybody wants to be a winemaker.  You can see it when you speak with them.  Live your dream and become a winemaker.  Improve your dream by improving your skills.

The future

There was a time farmers looked out over their fields with hopes their children would be able to move on from the farm to grander ambitions.  Now we look over our fields in hopes our children will be able to live the lifestyle we are able to.  Then as now, if we work hard, our children will have that opportunity!

Short course:

  • Farmer of great raw materials
  • Sculpture and crafter of liquid art
  • Balance the wineglass with the lab results – finesse
  • Marketing a lifestyle
  • Promoter of Panacea

Dedicated to:  Jacques Recht and Jacques Boissenot both apprentice’s of Emily Peynaud.  My honor to them as I have been able to apprentice / mentor under them. 

Thank you!