Tag Archives: Wine Growers

Winery Profits, Vineyard Management and Winemaking

success

Future of Lodi AVA

This has been an illuminating couple of days at #WBC16. I think I have an initial feel for a few of the major issues facing the Lodi AVA. First, the wine industry potential here has no limit. The terroir is capable of producing interesting enough wines to support a solid run at the premium wines category, but the local farming culture is actively impeding progress.

Multi-generational wine growing families dominate large swathes of the region, bringing a focus on farming science to the local wine industry identity. I spoke with a large sampling of wineries here and almost all ownership either originally started as growers, still have a fruit supply contract, or have a family history in farming. This is an AVA where large production wineries dominate the local economy with bulk wine and large production labels in the $10-20/btl price range. There is a clear local perception of Lodi’s current market position, but a few have a vision for the future and entry into the premium and ultra-premium categories… where double digit growth in the industry lies. The cost per ton of bulk wine grapes sold for volume production has been stagnant here, whereas the cost of quality fruit for small production labels has been rising. Some here with a head for business and a marketing sensibility, see the profit potential in a change of approach.

These factors are just the background for the Lodi discussion. The real issue is the identity crisis being caused by conflict between farming science and premium winemaking philosophies. Fruit production concerns here, not the winemakers approach, are driving the final product. Napa, Sonoma and parts of the Central Coast have already moved past this barrier. These other regions have developed production environments where the winemaker’s vision is effectively incorporated into the vineyard management strategy. This evolution has not reached Lodi yet and the battle for the identity of Lodi AVA is solidly underway.

Winemaking Strategies and Vineyard Management

I attended a short panel discussion during the conference that was focused on viticulture in the area. The ideas expressed… were hard to believe. In a world where Lodi is striving to be relevant in the premium wine category, this one discussion put the region back a decade. The panel asserted that quality wine could be produced from vineyards managed to deliver 10-12 tons of fruit per acre. One of the individuals on the panel was adamant! I wrote an article last year related to a similar topic that applies: Is a Trained Palate Necessary to Produce Fine Wine? I was referring to winemakers in the piece, but it can also apply to vineyard managers as well. I have tasted wines comparatively from fruit harvested at 2 tons, 4 tons and 6 tons/acre. There is a very noticeable difference. As a common theme across all Napa/Sonoma winemakers I have interviewed – none of these wineries sourced fruit from vineyards producing over 5 tons/acre. So, this panel is telling me Lodi vineyards can produce quality fruit at 10-12 tons/acre… AND dropping fruit does not increase concentration of flavors?

Team Commitment to Quality

In the premium and ultra-premium categories today there are many techniques in use that have an impact on vineyard management strategy. The goal is to enhance structure, balance and complexity in the final product. Here are a few:

  • Multi-Pass and Small Block Harvesting
  • Small Lot Fermentation and Blending
  • Extended COLD – Soak, Maceration and Fermentation.

I explained some of these techniques in a previous blog post at: Why Do Wines Taste So Different? These represent winemaker driven strategies and are the hallmark of an ultra-premium mindset. Very few of these techniques are in use currently in Lodi. The changes required in vineyard operations to adopt these methods is not consistent with a farming driven approach to wine growing. If winery operations teams can’t move thinking in this direction, bulk wine growing will continue to dominate the region.

Profitability and Perceptions of Success

How do Lodi wine professionals measure success in the wine industry? Does that vision conflict with profitability?

It is clear to me, many of these Lodi wine growers measure their success by their ability to produce reasonable quality at the highest yields. Profitably producing fruit under a 10 year contract with Gallo at $600-800/ton is the picture of that success. My imagination is just not captured by what it takes to be profitable producing 500,000 cases of wine. There is definitely more than one approach to running a profitable winery, but from the wine service perspective, achieving high quality and acclaim is the definition. That quality has typically come from single vineyard designate, estate wine production. I think there are many students of winery operations that could deliver quality at 3-5,000 cases… and struggle to make a profit. What is truly impressive is a 10-25,000 case winery developing demand at a premium price point and driving healthy profits! Notable success in the Wine Industry should be measured by producing highly acclaimed premium and ultra-premium wines, while delivering a serious return on investment.

Is Change Necessary in Lodi?

Is the agricultural flavor of the local area what defines Lodi? Yes. Can the local industry be profitable with offering fruit by the ton, bulk wine and $10-20/btl wines? Yes. Will the area draw attention from the wine trade around the world and move producers here into the premium and ultra-premium categories? Resoundingly – no. What is the future of Lodi wine production? I guess, we will all wait and see…

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