The Leverage of Longevity
- Posted on
- By George Balling
The Leverage of Longevity
By: George Balling
The recent battle we all waged with the pandemic coupled with some pretty devastating fire years across the west virtually stopped the opening of new wineries in the Western US. As we emerge from the fight against covid and look longingly for some smoke free years in the wine countries of the west we suspect we will again start to see the intrepid entrepreneurs of the wine industry again start to launch wineries and vineyards. There is a long-standing humorous axiom in the wine business that goes something like this, “the best way to make a small fortune owning a winery is to start with a large fortune”, and it is true. It is a capital intensive and daunting business to get into, we suspect though that there are still brave souls out there wanting to take it on.
We applaud those who do. The innovation new winemakers bring to our industry is welcome. It introduces new techniques, new varietals bottled on their own or in combination, and indeed new wines to enjoy. There are some areas though where longevity and experience in making wine confer real benefits. It gives the winemakers who have been doing it a long-time true leverage and that can’t be ignored or argued in most cases.
Length of stay in the wine business though is not enough, this isn’t the post office we are talking about. It is and always will be a true meritocracy where the wines that taste the best for the dollar spent across styles of wine making will simply sell better over the long term. The wine consuming public has a way of discerning quality that is tough to get around, and it will stay so.
Wineries and winemakers who have been doing it for a long time have some advantages. Perhaps most important, is access to the best grapes. Many grow their own grapes on vineyards they own. Many more work with farmers who they have committed to long term contracts that stipulate not only price but also quality standards that allow winemakers to navigate more challenging vintages when weather and smoke can create a fair amount of havoc. Here is another advantage that is conferred to the most tenured producers though. The chance to receive “fruit” that is not already spoken for under those contracts at some “killer” pricing.
As the wine industry goes, it is very much an insider’s game. Winemakers and growers alike that have been at it along time know well all the relevant long-term players. For whatever reason growers from time to time end up with extra grapes and will offer those grapes to their good friends at great prices or on occasion even for free! A deal that is tough to pass up for just about any winemaker. A deal that presents the opportunity to make some really good wine and the leverage necessary to make a good profit in these one-off situations.
Working through many vintages also presents winemakers with the chance to learn much about how to navigate all the Mother Nature can throw at the art and science of making good wine. The best winemakers for instance know you never produce a smoke tainted wine. They know too how to get the best from their grape crop in cool and wet years, just like they know when they should limit crop size during vintages that produce huge crops from consistent warm dry weather so that their quality stays elevated. This length of experience provides true intelligence that no book can replace.
There is one area though where the best most experienced wineries, winemakers and growers alike have the most leverage though and that is pricing. We are consistently mystified when a new winery starts out with their first vintage and puts eye popping prices on their inaugural release. As wine consumers first we have all seen that first wine from a new winery with a price tag of hundreds of dollars per bottle. Or the winery that is just one or two vintages in that all of a sudden takes their prices up 40%. This is simply not the way the world of wine works. The reason the very best producers who have been making wine for decades command the pricing they do is partially determined by supply and demand for their best bottles. More importantly though is that they have earned those big price tags by having produced superior wine for a very long time and leveraged all of the knowledge and longevity of their full experience.
The art of making great wine and the talent of being able to do it over a long time is what entitles the best to earn those big prices and longevity can’t be discounted or bought by the newcomers.
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