Which do You prefer - Early release or Futures?

Being a businessman myself, I understand cash flow all too well. Earnings are great, cash flow is essential.

In a perfect world, winemaker’s would make their products and when that wine was ready it would be released to the public via wine clubs, mailers, retail, etc. We don’t live in a perfect world. Winemaker’s often find themselves in a cash crush and they have to sell wine. They may even have to sell the wine before it’s ready for consumption.

So they have two options as I see it. (1) Release the wine and take what comes, or (2) sell futures, if they can, and hold the wine until it is reasonably ready to be drank before releasing it.

Which do you prefer? In both cases you have spent money for wine not ready to be drank. Simple question, which is it threaders?

Not long ago, I received a club shipment of pinot noir from a winemaker. This wine had not, nor ever will be sold retail. The flyer that came with the shipment clearly stated that this wine should be cellared for a minimum of six months and best to cellar for a year. I read TN’s on the wine from threaders in CA, who received the wine faster than I, before my wine ever arrived. The TN’s were not complimentary to the wine. What did they think the winemaker was trying to tell them? I discussed this with another winemaker. He said that’s the primary reason he does futures. He doesn’t want his wine slaughtered in threads and on boards, when all the parties reasonably know the wine isn’t ready to be drank. He commented on how many people saw the winery flyer like a red cape being waved in front of a bull. A reason to attack!

So long as I know when to expect my wine, I would prefer futures, esp. if there is consideration for purchasing in advance. The one thing that drives me crazy about the pre-sell environment is the seemingly inevitable information black hole that ensues. I’m out of space, I’d prefer you to hold it until it is ‘ready’, but just tell me when that is going to be so I don’t have to start calling to find out.

William;

Great point! I bought futures for a wine a couple years ago in Nov. for what the winery said would be delievery in April/May. In June, I called asking about the wine. The winemaker, which I knew well, told me he didn’t think the wine was ready for release yet and was waiting. It would not go out during the summer heat, but would ship for sure it Oct.

I said fine, but you should be telling people that instead of us having to call you. He immediately sent out a mass email to all future buyers explaining what was going on.

In my particular case I prefer early release. I have a large cellar that has come of age so I’m constantly in supply of premium vino. I have no problem buying a wine and receiving it right now, laying it down in the cellar and basically forgetting about it until its time to drink it within its’ window (best guess). The other option you offer up is futures where I give my money to somebody to hold onto and use for a lengthy period of time instead of me using it instead. Less desirable.

Since I usually try to hold most of my wine a year before opening I prefer early release, there’s something about product in hand that always makes me feel a little better

When can I come over?

Pretty much anytime. I love offlines and entertaining board members.

Joe;

Since I have a good cellar, I understand your logic. It also seems we have a lot of threaders that have no cellar, nor room for one. If they get a bottle of wine today, by any means, it is consumed within the week if not that day. With instant communication to the world via these threads, they can then destroy the reputation
of any wine. My story in the opening thread is a true one. I can see where those people would be better off with futures.

So it’s interesting getting all the different perspectives.

I’m looking forward to an off-line with you!

ditto.

although, if I had a larger cellar I would be in Joe’s camp.

From a producer’s pov … futures are great for cash flow, but strip freedom and creativity from the winemaking process. It’s okay if you know you’re going to be bottling a set amount of a set wine from set vineyards … but that locks the wine team into producing a certain number of cases of that wine year in and year out regardless of vintage conditions, yield, etc. … I know, you’re thinking but the grapes are already barreled down, so it’s all a done deal, right? Not necessarily. There’s a lot of variation in how vineyard lots and vintages develop during the aging program. Frequently, winemakers make last minute decisions regarding blend percentages, declassifications, upgrading vineyards to SVD, and bottling dates. And, more frequently than you know, what you receive as bottled wine is not precisely what was promised during barrel sampling, even at high end ventures. If you are okay with that, and I believe most true wine geeks are, then futures are an attractive option for you. In addition to saving on personal storage space, you have the added insurance of winery oversight (extending barrel aging, progress tastings during bottle aging).

(There’s also the production point that the wines being held absorb extremely expensive temperature and humidity-controlled square footage. Although a winery may present futures as being billed at a discount, the reality is that a futures program raises the cost structure and therefore the price of the producer’s brand by no small amount. Again, not a problem for those unconcerned about price, but something to keep in mind for those on a budget–why pay for someone else’s cellar when you could save enough to convert a closet or room of your own?)

On a philosophical bent, as a former single-mom apartment dweller I can sympathise with the storage issues. But, really, isn’t this a particularly American issue? We want wines built for aging … but we want them to arrive pre-aged! Ready for consumption and guaranteed to behave. It’s like … buying the engagement ring now, but asking your wife’s family not to deliver her for another five years. Or buying a beautiful, placid golden retriever puppy but asking the owner to keep it and train it until the age of three. [big_boss.gif]

i like dogs more after the puppy stage! and my capacity for storing wine is exceeding the 800 bottles i can rest properly - promised myself this would not happen either! so futures don’t bother me as i try to find time to drink more wine.

Be sure and check out some of my tasting notes on CellarTracker (under the name “wineismylife”). 9 times out of 10 when I’m drinking a wine too early yet still posting a note on it I will either 1) withhold a rating and state so because it’s too young or 2) give an estimated rating but fully clarify that it’s still too young to properly evaluate and take it with a grain of salt. Fair is fair after all.

Joe;

By reputation you are an experienced wine geek and knowledgable on these issues.Take a look at all the threads on WS and here of the people that don’t follow your excellent procedures.

Just wait till fall when the threaders start throwing points at the 08’s pinots, a vast majority of which will not be ready for consumption, but the product of early release. I have been bashed before, and often, [wow.gif] for even suggesting that people are reviewing and rating terribly young wines!

I ask because I am not privy to the process and am curious-- do wineries that implement a futures or pre-sell program sell everything they are anticipating producing in this manner? IE: I have 10 barrels of Wine X, which I anticipate to be 250 cases. Do I pre-sell all 250 cases or do I sell a certain percentage, so I can avoid issues like you mention above?

Nearly all sell a certain percentage or set number of cases as futures, but promise the rest as continuing allocations to their retail/restaurant/distributor portfolio. Many wineries that operate on futures pre-commit to all those venues (if they didn’t, they would lose their positioning). Which means in short years, like 2008, there’s very little margin to work with in tweaking the final product.

Mary;

Very good posts, and great insight!

I don’t want to put words in your mouth but what I hear you saying is that as a producer, if need be, you would rather release a wine early and tell your customers to hold X amount of time before opening than to sell futures.

Is that a fair interpretation of your position?

Mary, funny and true analogy with the bride. Can’t say I’d want one aged past maturity though. For me, the answer would be what it typically is…it depends. If we are talking about a wine that’s ready to go right on release, early release works just fine. For something worth laying down, it would be great to have the winery babysit while I get after the more mature bottles. The issue comes in when the communication dips and you wonder if your wine is ever going to arrive.

Thanks, Gordon.
It is a fair interpretation of our position, although we did sell a future … once. To one gentleman who would not be denied. He insisted that I send him an invoice declaring the purchase as a future, which I did, and he framed it for his office. [give_heart.gif]

Futures are not a matter of fluctuating preference from the winery’s pov, but a serious matter of business model. If one takes that road, then one is committed to it for pretty much forever. On top of that Dan will never sacrifice his freedom to blend and declare as he sees fit.

We definitely prefer to let people know that the wines have recently been bottled and need to be held prior to consumption.

I wouldn’t know from experience, but I hear there is some benefit to having a wife with no teeth. Maybe we can start a whole new wine slang … [friends.gif]

Don’t the kids call it whistlin dixie? (cue the rimshot) Hmm, rimshot, now that’s a name…