From a layman’s perspective, it just doesn’t seem like the math would work if one is looking to make a profit. Enlighten me.
No telling how many times the barrels may have been used?
Giant oak barrels that have been used over and over?
Buying old barrels for less than new price?
Heck, for all we know, it was French oak chips in a big vat!
How do you think most $12.50 red wines are made?
Not asking to be a smartass, just curious what you are thinking ought to be happening at that price point.
Cement vats?
Big difference in price between new oak and used oak.
Charles Smith’s
2015 Wines of Substance Cabernet
Columbia Valley, Washington
Private Client Price: $150/Case
(Reg: 227/case)
“One of the best values I’ve tasted in a long time, the 2015 Cabernet Sauvignon from the team at K Vintners was hand-harvested, natively fermented and aged all in French oak. Smoking good notes of cassis, black currants and hints of plum all emerge from this rich, beautifully textured, layered beauty that has solid tannic grip, a silky, elegant texture and a great finish. It has real elegance and finesse and is a dark fruited, unctuous beauty .”
-Robert Parker’s Wine Advocate
Why wouldn’t the math work?
Partially because its really a $19/bottle discounted to near production cost. I usually think of $20 as the break on wines done in oak vs. alternatives for the flavor without the cost. Old oak is cheap/free, but does take up more space and time. It also likely only spend 8-9 months in barrel, not the 20-24 which is more common in cab at the higher end. Not knowing the producer it could also be hard press wine, or filtered lees wine, or topping wine of theirs or from the bulk market. Its not a SVD so could be the appellation wine of barrels that did not make the cut. Lots of ways really.
His note does not scream “new oak” to me. I have also been in plenty of cellars that state 100% french and then you see a hungarian cooper stamp of some of the heads.
It could be that CS makes TONS of wine and has access to volume. He has hundreds and hundreds of barrels in use at any given time, and probably the market power to get volume deals. Some of his wines are $$$$ and he probably just has his oak expense as a single line item that doesn’t always get 100% factored into each wine by proportion. His wines are undoubtedly priced variably based on what he thinks they can fetch at market and some probably have higher margins which he uses to make the entire operation pencil. Also what Joe said above.
I wonder if it isn’t big oak casks, perhaps with oak chips or staves. Ordinarily in a WA review, I’d expect them to say whether it was barriques or tanks, but I can’t imagine in this case, given the price, that they’ve done anything other than repeat what’s in the winery handout. Note there’s no mention of oak aromas in the notes.
Just a surmise.
Who wrote the review?
There is no obligation for any winery to tell you the specifics of how they age their wine. I am familiar with more than one Winery that lets our customers know that the age their wine in Oak but what they really mean is they age their wine in stainless steel with Oak chips.
Now at the end of the day, does it really matter if you like the finished product? Do the means justify the end?
I think this is a really important question to ask because truth in advertising does not necessarily hold when it comes to craft Industries such as wine. Sometimes perception is more important than reality.
Getting back to the original op, used Oak barrels are not that expensive at all. It adds very little to the total cost of the wine relative to using new French Oak barrels, for instance, that can literally add up to 4 or $5 per bottle in straight cost.
Cheers.
Based on my calculations and a quick look online, you can get new french oak at around $3 a bottle, probably $2.50 at volume. Once it is used, it is likely cut in half to $1.50 or $1.25 a bottle. Of course you only consider the cost of depreciation, so the real cost is probably $0.75 or less.* Assuming that you need to have the COGS at under $5 for a retail price of $12.50, it is doable, although the oak barrel is 15% of the cost of the wine.
*What I mean here is that the cost of the barrel is not how much you pay for it, but rather how much you pay minus how much you sell it for after you use it. If a barrel costs $600 new, but you can sell it for $300 after one use, then the actual cost of the barrel for that one use is $300. Likewise, if you have a used $300 barrel, and you use it again, and can sell it for $200 after, then your actual cost is only $100.
Here’s an article about the line. It says “He’s making the new wines in the same style as his own, using open-top fermentors and indigenous yeast to ferment grapes from good vineyards. He has no plans to purchase bulk wine.” This agrees with the advertising copy on the winery website: “Traditional winemaking. Natural fermentations. Barrel-aging. Plus, bottling unfiltered and unfined. In essence, making the wines in small batch winemaking integrity, but doing so on a larger scale.” Just don’t ask me what “making the wines in small batch winemaking integrity” is supposed to mean.
Wines of Substance (Charles Smith’s new umbrella name for all his lines including this one, Substance) is the fourth largest winery in the state of Washington so it stands to reason that Bryan is correct about their access to some volume pricing.
I went to a concert at his Seattle winery last Saturday. It was also a Riesling festival so none of the Substance wines were included with the price of admission and I stuck with the Riesling so I haven’t tried them.
True
False as a matter of law. If you misrepresent what’s in the product (as opposed to saying nothing), that will violate any number of laws that could lead to private or government suits. There are plaintiffs class actions lawyers who would love to sue a winery that lied about what vessels the wine was aged in. I’d guess that the ATF (or whatever they’re calling themselves these days) could make trouble, too, if you said it was oak-aged when it was all in stainless steel.
Probably true at this price.
John,
Why just at this price? If one likes the final product, does it really matter how it became that product? I know that’s a silly question and I know from any on this board it does matter.
But you and I both know that there are many instances where wine is produced in a different manner than the end consumer would believe at each and every level of price and quality in our industry.
Cheers.
Two answers:
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For the same reason I want to know if the packaged food I (rarely) buy has a gazillion additives.
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In the case of wine meant for aging, I’d rather buy a wine made with methods that have a track record for aging well. Lots of the things done to tart up wines to make them approachable young work against their long-term development. I might be fooled by taste alone at an early stage, so I like to know something about the winemaking. It informs my purchasing decision.
5 minutes in wood means it’s still technically aged in wood. Just saying 
Economy of scale, as mentioned above.
I also don’t care how they do it, because I like this wine and buy it pretty often.
If you buy a decent $12 Bordeaux, Chinon or Bourgogne, those are probably aged in French oak barrels, aren’t they?
I agree, though, that the economics can be so hard to fathom. How does, say, Baudry Les Granges get grown, harvested, made, aged in barrels, bottled, shipped halfway across the world, run through three tiers, and cost $17 at retail? I can’t add it up in my head, but somehow, it happens.
Two Buck Chuck is the classic example. The margins are tiny. Sell enough of it and you make a fortune.