Chapter 1 Flashcards
Consequences if undersupply for producers of large volume inexpensive varietally labeled wine
- customers upset
- price goes up
- give competitors leg up
- tight revenue stream already
- quality would go down
- get grapes from other places
- wide variety of choices, leave wine altogether
Consequences of undersupply for producers of super premium single vineyard wine
- loss of revenue
- price goes up
- customers upset but not as upset
- inventory
- lose spot on shelf/BTG
- won’t stock library
- increased exclusivity (could affect allocations)
- membership
- burgundy crop loss
- oregon 2020/2021 wildfires
Reasons for increase in area under vine in China from 2008-2016
Increase in table wine consumption
What are reasons for decrease in area under vine in EU
-vine pull schemes
- eu restrictions on planting new vineyards
- conversion of land to other uses
- abandonment of rural areas (younger generation moving urban)
Too producing countries by volume
Italy, France, Spain
Production volume variation
- labor availability
- Mother Nature
- change in taste
- people drinking less in general
- older generation dying off
- vine pull schemes lower production overall
weather hazards that affect yield across a vintage
Spring frost
Hail
Heatwaves
Fires
Long term natural factors that cause undersupply
Drought (even this year after rain, still supposed to have small yield because of past droughts)
- Napa, South Africa, chile
How does EU legislation that restricts use of irrigation control yield
La mancha
??
How can a producer increase yield without increasing vineyard area?
Trellis systems
Canopy management
Narrowing rows (but still big enough for tractors)
Allowing more clusters per vine
Managing for pests/disease
Lees filtration
Blending out years where things happened (smoke taint)
Wine consumption crashed
2008 (global recession)
Dips in 2013,2014
2020 huge spike in consumption which has now flattened off
Why did international exports rise in US
Wine/food pairing interest
More $$ here because price to produce wine went up, cheaper price export
Wine consumption mainstream
China consumption in past 10 years till now
Premium red wine
Larger (aspirational) middle class looking to work as luxury
Showing off wealth
Ultra premium market is declining bc of new laws limiting lavish gifts
Germany consumption
Tetrapacks (alternative packaging, matches active lifestyle) compostable
Sparkling
Price sensitive (get fantastic wines very cheap)
Moving towards dryer style
Consumption Trends in France and Italy
Reduction: because of health and benefits
Work day has changed— not as long of lunches
Decreasing population
2020 trends
Tarrif war between us and China
South Africa legislature didn’t let them sell wine
Decline in wine consumption
- Younger people are drinking less wine
Availability of other drinks GIN
Old fashioned
Spend less time socializing in bars - Health concerns
increasing awareness of negative health effects of alcohol
Government campaigns or policies
Drunk driving law (Scotland) - Changes in lifestyle
Less time for longer meals traditionally served with wine
Daytime drinking often forbidden by employers - Reduced availability of cheap local wines
Steps to reduce overproduction
Switching to cheaper alcoholic drinks - Consumer preferences
Decline in consumption of fortified wines
Increase in consumption of sparkling wines (benefit from white claw) - Legislative and political
Taxation and trade agreements (Scotland)
Laws limiting or prohibiting consumption
Government policies to reduce consumption
Other laws relating to GIs (Bordeaux took a long time to get new varietals approved)
What factors can cause an increase in wine consumption
Growth of wine culture
Wine media (scandal increase in African american)
Encouragement of wine consumption (French paradox, judgement of Paris)
Consumer interest in experimenting with new beverages
New products: wine cocktails, cans, tetra packs, orange wine
All of the costs to establish a vineyard
Land
Labor costs
Installation of trellising / vines
Irrigation (water/tubing)
Soil consultant
Amending the soil
Buying vines/testing for disease
Permits/licensing
Lawyers
Established vineyard/versus new
Equipment for weather events fans/nets/fencing
Getting financing / loans/ interest costs
10,000,000 to establish a vineyard
Purchasing grapes in the meantime
Losing land to establish roads/access
Easements on the land
Vineyard costs moving forward
Labor(pruning, planting, picking, pest management, cap management, hand harvest/machine harvest)
topography
Organic/biodynamic
Machinery / maintenance of machinery
Treatments / sulfurs sprays fuel
Crop insurance (federally subsidized)
Making sure you’re covered in event of
Capital and interest from loans
Broker to find grapes/buyers
Property tax
Worker safety/ fines
Access to weather data
Frost protection
bird scarers
Electricity
Winery costs
Winemaking equipment (bottling wine prohibitively expensive)
Refrigeration
HVAC
Water
Cleaning supplies
Cost of building winery (designer architect land engineer)
Permits (capacity, tasting room)
Roads
Costs of being certified organic
Branding/PR
employees
Recruiting
Interns
Sugar, acid, yeast, fining/filtering agents, ML agent, grapes, bottles, labels, corks
Storage
Barrels
Advantages/disadvantages of methods to transport bottles
Rail: slow, limited coverage
Air: cost fast
Sea: slow port closed
Road: strike cooling not as good
