Ramblings on a Lost Barrel

In light of the Napa earthquake, some of the arm-chair criticism of the industry is already starting to rear an ugly head–and while not personally involved in the Napa wine industry, I think a little education is timely for those who love wine, but only open bottles every night.  The plight of the Napa winemakers is relevant to a lot of the industries we are all involved in–but with several distinct differences.  The smatterings of talk towards the Napa hubris involve value-oriented conversations many of us have had over several decades.  “These rich fucks in Napa deserve to be set back a bit.”  “Wow, they will just raise their prices some more.”  “How will they spin this into even more expensive wine.”  and “Well, they all have great insurance, I am sure.”

I know a fair amount about three industries:  Construction, Art, and winemaking.  The former from a daily, first-hand experience, the middle from education and involvement, the latter from small-time personal experience and observation.  With construction, you get the constant “Why do you want $35,000 dollars to remodel my bathroom when there is a handyman service in the Pennysaver who will do it for $10,000?”  With art dealership, there is the never-ending, “Why is this $2300?!?!?  My four-year-old could paint this!”  And with wine, it is always, “Why is this bottle $65?!?  I have tasted 10$ wines better than this and Charles Shaw is solid for 1/5th that!”  and always with the “Did you see that article in the Chronicle where every bottle of wine only costs $6 to produce?  HOW can they charge 100 dollars for a bottle of wine?!?”  And, of course, the largest offenders in the New World are from Napa–the place where it all began.  When you see the devastation in the cellars of Napa–barrels rolled and piled upon each other and huge racks of bottles crashed on the floor, it is easy to brush the whole thing off as a simple business loss.  But let’s think about one huge difference.

In construction, say you lose money on a project or something goes South… you do another job, you remodel another kitchen, you change Mrs. Jones’ toilet for $250… life goes on.  You make up for it.  It is painful, yes, but you smooth it over with more projects.   In art, something doesn’t sell.  Your gallery opening was a bust.  Someone offers you half-price for a piece and you take it.  You make more.  You paint another 5.  You sculpt three more pieces.  You sell some stuff on your web-site.

Wine is different.  You have to realize your entire year happens in a two-week period in September.  Your grapes come when they are ripe–there is no control over it–and there they are, they must be dealt with, NOW, and: there they are.  That is them.  There they are.  Your fruit.  Your entire year.  The entire 12 months of growing and vineyard management and pruning and growing and tending and picking.  One pile of fruit.  It can not be replaced or replicated.  You can not go buy some more.  It only happens once a year.  It is not possible to get any more for another 12 months.  That’s it.  BOOM.  Your entire year.  There is no amount of insurance money which can replace the grapes you harvested in 2014.  Nothing EVER can replace harvested grapes.  And that is only the *concrete* portion part of the loss.  How do you put a value on the the subjective–the SPIRIT of the vintage?  Let’s go back to the $75 DOLLARS FOR A BOTTLE OF WINE!!! part.

How much does a bottle of wine cost?  Fred Franzia can sell a million bottles for $2.49 and have a private jet, so why should we pay 25, 30, 40, or even 100 dollars for a 750 of wine?  Sure, the videos of Sebastiani’s 10,000 gallon tanks spewing 50 gal/min onto a concrete slab 3″ deep in red wine are startling–and I am not short-coming bulk wine losses or production costs,but let’s talk about the pictures of barrels crashed down and ruptured we have all seen.  What does a barrel of wine COST?!?  Let’s start of with some finite values.

Basically, 1000 lbs of grapes make one barrel and 25 cases of wine.  I am going to round this all off INCREDIBLY and there are huge variables in both directions, but I am going to hedge on the low-side for this argument.  Premium grapes in the Napa valley run $5000 to $15,000 per ton.  Let’s go with $3000 for 1000 lbs, a half-ton.  A barrel costs $800.  Bottles are a dollar each and corks a dollar each and labels a dollar each.  So that’s $13 a bottle.  That is the number everyone likes to argue about in terms of relative value.  But that is not the point of these scribblings.  Let’s talk about those barrels on the ground.  $4000 for each ruined barrel.  $4000 seems like an easy number to recoup, right?  How about 20 of them?    That’s 80 Grand.  50 barrels?  200 grand.  You have to remember a majority of wineries losing barrels are not the Mondavi’s or the Sutter Home’s or the Peju Province’s or the Sterling’s.  Instead, they are people who source out fine grapes and craft 20, 30, 50 barrels of wine–absolutely hand-crafted.  And the whole thing–the ENTIRE year–gone.  So a bunch of wine worth $13/bottle gone.  Big deal.  There’s insurance, right?  Can’t they just make some more?  They make wine for a few weeks a year and take the rest off to lunch with Francis Ford Coppola and attend the Napa Valley Wine Auction and post pictures from the French Laundry.  What do they spend the rest of the year doing?

Wine is not Lucille Ball gleefully squishing a few grapes and ladling it into a bottle.  Wine is a lot of work.  There is the sourcing of the fruit–the constant vineyard visits, the testing, the consultation, the research.  Then the wine itself–once it is in barrel:  The testing, the racking, the moving about, the blending, more chemistry, not to mention the $20,000 crushers and $20,000 presses, and forklifts and hoses and clamps and fittings and chemicals and regulatory compliance and label design and bottling and storage!  Let us not forget about plain storage for barrels for a couple-dozen months.  And that brings us back around to the gruesome images of stored barrels meeting their demise–and with them the entire year’s hopes, dreams, and energy–not just the wine-maker, but the entire energy of the VINE for an entire year.

There is a lot of life in 60 gallons of wine running down the drain.  Respect it.

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