Weathering the Economic Storm

Cellar Rats (ITB)
41

Chris, my guess is that they have ascertained the market and there is less money to be made there. If there was an opening my guess is that we would be gulping down Freemott’s gallon jugs right now.

Otto

42

Looks like The Wine Cask in Santa Barbara is the latest to fall under the current economic condition. Both restaurant and store closed down this morning.

It’s tough for everyone. We’re all trying to figure out how to keep people happy and excited about our products. I think now more than ever the personal touch will apply the most to keep relationships healthy, and when the economy turns, those who were treated well and fairly will most likely share the business. It’s not a time to be pushy. It’s a time to say “hey, what can we do for you!”

43

I just read an article that in 2007, Americans spent 130% of their income. In 1982, they spent 67%…

44

Gina’s busy right now, so I can only answer for our own artisanal production. We are about to bottle our spring releases. We paid $2000-$3000 per ton (60 cases) for the fruit alone. We only produce SVD’s and special blends, no table blends. And yes, 90% of our releases should or could age for at least 3-5 years, some far longer. Our graphic designs are set up for bottles, and we have already printed all of our 2009 labels, enough for the March, June and September bottlings. Our wines are not sold in grocery stores–they go direct to consumers, wine bars, and restaurants. I don’t know how to ship boxed wine; I’m not even sure there are shippers for boxed wine? [shrug.gif] I don’t think mobile bottling units are set up for boxes, either–they wouldn’t fit in the spacing wheel, nor rotate well through the labeling rollers.

Perhaps for a mega-producer, that might be an answer, if the branding and distribution channels can even handle a switch in volume and identity, but I think you’ll find that the producers who post here (aka fellow Berserkers) are all relatively small producers.

45

I’m quite surprised to have not read any answers (I think) from the winemakers here that include two words:

Boxed Wine


I honestly need to know why.

Do all of you sell wine that SHOULD be aged?

Good one, Chris.

You mean, why am I not taking my 25,000 gallons and entering a race to the bottom against Gallo and their 20,000,000?

I wish I could show you an aerial of theirs and Franzia’s facilities. Two words: Vertical Integration. We can’t beat them at their own game and when you’re in the wine as commodity game, there’s a big difference between $5.99 and $7.99.

At least with their bottled wines, they make their own glass, print their own labels, and I’m sure are working on (if they haven’t already achieved) supplying their own foils and corks.

No, we’ll stick to what we do well.

46

Chris,

In 2004, I helped launch “X Box” which, I believe at the time, was the first ultra-premium box on the market ($45 retail/box). The wine sold well, really well in the Seattle area and started gaining some ground in other states. I had a problem with perception in the market place as wine “couldn’t be any good in a box”, even though it was the same juice that was in the bottle. The winery received a cease and deist letter from Mr Gates that ultimately ended the program. At the time, boxed wine was very mis-understood and I feel it is still today.

I am currently finishing up the last of the 12 3L boxes of Chardonnay from Evesham Wood in my BTG program and it has sold extremely well and has been a great benefit to my establishment through the slow season as I have 3-4 weeks to pour 4 bottles of wine. I also purchased a few cases of the bottled version to offer by the bottle if a customer started with a glass and decided to order an entire bottle. When launching the X Box, I believed the wine would be an easy sell on premise for BTG and packaging the same product in bottle would have accomplished the bottle sale as well. The theory was good until I hit the streets. I feel fortunate to have the experience under my belt to the point I could use the same principle in my restaurant.

I must also mention that boxed wine is a time sensitive material. I’ve noticed a time frame of about 6-8 months after bottling/boxing where the wine performs the same as the bottled product. If you cannot move it from the cellar to the end customer in that time frame, selling boxed wine is not worth the hassle. On the flip side, on demand bottling is a great advantage to keeping the product fresh for delivery after the PO is received.

I am a believer in BIB (bag in box) but still feel that America as a whole is not ready for the transformation. Perhaps these economic times will shift the paradigm.

47

The mylar bags inside a box? I’d drink Chave, Grange, d’Yquem out of them. No corked wines, by the glass without oxygenation (the bag collapses rather than letting air in). And storage? Just stack them, no racking. A perfect wine by the glass ome system for say 5000 by the glass selections.

48

Geoff,
Thank you for the reply.

I ask because my brother is “ITB” - he manages country clubs for Kemper Sports Management.

He and I are continunally talking about ways to boost his F&B revenues at the club which, if profitable, are good for his bonus and good for the club members as then dues can be dropped and/or reserves built up.

He and I are in agreement that a wine in a box program for a BTG model is perfect for his club. He’s tracked the usage and consumption of wines for the 8+ years he’s been doing this.

The very standard “he drinks red, she drinks white” model is what he fights at the club when couples come in for dinner. He cannot profitably offer nearly enough BTG options as he would fight oxidization and with it, waste.

But, he also cannot get his distributors to consider it as they won’t go back to the majors with the plan b/c it’s not, in their opinion, cost effective.

I think Mark has a big opportunity as would other country clubs to make the clients happy with better wine and more options at a lower price and better profits.

We discussed the aura surrounding bag/box wine and he felt that it would be very easy to invite 50-100 members for a tasting and food pairing and show them AFTER they drank the wine that service in carafes of up to 15 wines would allow couples to dine more frequently and have better pairing options if the club had the right chef.

So my question to the winemakers here was very serious as I think it would assist those that had consumption wines as part of their portfolio vs. wines that require age - to find a way to move large volumes of wine at similar margins.

I am a huge fan of the potential for bags in a box for home consumption. For multiple reasons, with budget being one of them but my weight and my time being the other, I can no longer sit and drink whole bottle in one sitting.

49

Great post, John.

50

Shame on me! Their are so many reasons I should support this, but I can’t make the leap. I suppose that I, like the rest of America, needs to be educated on the benefits.

51

BIB is great! I haven’t personally seen the offerings from Evesham Wood, but I applaud Russ for doing it. So far, my favorite is the Edmund Burle VdP. The only problem is I have to remember to order it in advance because no one seems to stock it at retail.

52

Most, if not all the with winegrowers and winemakers here are from relatively small wineries. The types of grapes we buy and/or grow are too expensive to work in the BiB model. I’ve never done the exact numbers, but just off the top of my head, if I were to put my wine in a BiB, my retail price for that 3L box would need to be over $200. [blink.gif] Geeze, could that be right? I think so.