By Kyle Sawyer, President ICC NW
With wine industry trends pointing to a flattening of demand, and customers resistant to increases in pricing, now is a good time for winemakers to look at ways to tune up production processes to create and maintain healthy profit margins.
According to State of the Wine Industry 2018 by the Silicon Valley Bank Wine Division, “…after more than 20 years of straight-line growth trends, total volume growth is leveling out.” Yet, the report goes on to say, “Successful wineries 10 years from now will be those that adapted to a different consumer with different values—a customer who uses the internet in increasingly complex and interactive ways, is frugal and has less discretionary income than their
Keys to crushing a tight market
Increasing productivity and quality while cutting costs may sound like an oxymoron, but it’s essential to protecting profit margins. The key is to look at two general categories: tank turns and conservation.
Now, before you pooh-pooh tank turns, we’re not talking about turning a family boutique into a custom crush behemoth (though, adding custom crush capability is an option to drive a longer, more profitable season, even for smaller operations). Any winery can squeeze out higher yields by paying attention to any of the following:
Temperature is a critical element that can speed or slow tank turns. Through the use of the appropriate cooling jackets, temperature sensors, and automated monitoring, winemakers can tightly manage every stage of fermentation and avoid costly delays.
Self-emptying tanks are faster and require less manpower, freeing up skilled workers to perform other critical tasks. One way to increase tank turns is to let them empty themselves. “A tank that disgorges the must itself can save you hours, reduce manpower by half, and decrease accidents,” notes ICC NW President Kyle Sawyer.
Cap management is another factor in the speed tank turns. How quickly a tank reaches healthy fermentation determines how quickly the tank can be emptied and refilled. Proper tank size is critical, as well as your choice of pump-over or punch-down.
In your use of energy and materials, that is. There are a variety of ways wineries can use less water, chemicals, and energy to reduce overhead costs that cut into profit margins.
Automate your processes. Automated, connected systems keep tight control of fermentation parameters, oxygen levels, and temperatures, and reduce staff time, water and energy use. “I sort of look at any production facility in the same category as the big food and beverage plants and try to find ways to apply their technologies and processes to wineries looking to cut costs and/or increase production,” says Sawyer. “It’s a great way to make a really big dent in energy and labor costs.”
Temperature control makes the list twice because maintaining proper temperatures reduces the amount of energy you’re using. Cooling jackets, thermal insulation, and sensors are the key to cutting down on the time and energy needed to get and keep tanks at the right temperature.
“I’d say 80 plus percent of the wine tanks built over the last 20 or so years are not even insulated; they’re just jacketed,” says Sawyer. “The winery doesn’t want to pay for insulation, but they’re honestly paying year-by-year in energy loss. For example, crash cooling during the fermentation cycle is a huge energy suck.”
Gravitational force. Let nature and tank design cut your energy costs. You can get tanks designed to disgorge must through simple gravitational force. You can feel good about cutting costs while also reducing your energy footprint.
Clean-in-place technology increases safety and efficiency while reducing the amount of chemicals and water needed to sanitize tanks. With clean-in-place systems, you can also recycle the chemicals and water, further reducing expenses and waste.
Though the market may be souring a bit, there’s no reason your profits have to follow suit. An investment in improving your systems and processes today can pay off for years to come.