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Morgan & Moore

 

Borrowing a Cellar To Make Your Wine

August 2008
 
by Jeff Morgan & Daniel Moore
 
 
Custom Crush Winery
 
Expense leads many winemakers to use the machinery and expertise offered by custom crush facilities such as Yokayo Wine Co. (left) and Napa Wine Co. (right). Being honest about what you are looking for, and getting appropriate insurance coverage, can help mitigate any problems down the road.
 
    HIGHLIGHTS
     

     
  • A custom crush situation may be your best opportunity to make fine wine in an industry where the cost of doing business continues to rise rapidly.
     
  • More often than not, the full-time cellar staff does all the hands-on work, while custom crush customers provide winemaking protocols.
     
  • A realistic average for custom crush in California ranges from about $30 to $55 per case, not counting the fruit, of course.
     
  • You really can make great wine and avoid many sole-proprietor headaches in a well-organized, well-run custom crush winery.
In Northern California, the number of wine labels in circulation today dwarfs the actual number of winery buildings. Obviously, a whole lot of us are making wine in someone else's cellar, and the person who came up with the name "custom crush" is a marketing genius. The phrase implies that the recipient of this "custom crush" automatically receives some kind of very special attention. Sometimes this is the case, but often it's not.

Still, unless you've got access to plenty of cash, a custom crush situation may be your best opportunity to make fine wine in an industry where the cost of doing business continues to rise rapidly. We've made wine--and continue to do so--in numerous custom crush facilities. There are always pros and cons. We hope that what we share in this column will help you find the best situation to fit your needs.

The basics

Today's custom crush facilities come in all shapes and sizes. Sometimes a "virtual" winemaker creates a unique relationship with a brick and mortar winery that has more room than it needs for its own production. They craft some kind of special deal that works for them both. It's unusual, but it happens. Most likely, it occurs at wineries that may have room for just one or two clients, and it's a good scenario to pursue when possible.

There are also cooperative models, as pioneered by Central Coast Wine Services in Santa Maria, Calif., that allow you to perform your own labor without having to buy equipment.

More often than not, however, a custom facility will operate in a more rigid manner. Basically, the full-time cellar staff does all the hands-on work, while custom crush customers provide winemaking protocols. This system keeps liability issues to a minimum, and it also ensures that only in-house workers have regular access to the winemaking equipment on site. It is this type of arrangement we will discuss here, as it is the most common.

Why custom crush?

Who are you? A farmer with grapes but no winemaking chops? A winemaker with no place to make wine? Or just a winemaker who needs a little more space to handle growing production? Obviously, it costs less to use someone else's space and equipment than it does to build, expand or equip your own winery. So a custom arrangement is very helpful to small producers or those who want to focus on making wine rather than building a winery. Basically, if you've got the fruit, you can start up immediately in someone else's cellar. Most custom facilities offer basic lab work and storage as well. Most importantly, you really can make great wine and avoid many sole-proprietor headaches in a well-organized, well-run custom crush winery.

Here's another upside: Some custom crush facilities have tasting rooms available to their clients. This, too, can be an incentive to sign up, as it offers a chance for direct interaction with the public, and the development of a retail clientele.

The downside?

As soon as you enter someone else's domain, you need to be prepared to give up a certain amount of control. It's not your facility, and standard procedure for equipment and crew availability will often boil down to, "Get in line!"

Admittedly, there will be schedules and protocols in place to create the smoothest operation possible. But when you're not first in line, you'll have little recourse but to shut up, sit tight and wait your turn. Don't take it personally. It's just the way things are. At a well-run facility, the people working on your behalf and their attention to detail likely will mitigate such sticky points.

Oh yeah--if you're not a winemaker, who do think is going to run your winemaking program, write the winemaking protocols and make sure everything is done right? You'll have to hire someone, or most likely negotiate a separate deal with the host winery.

And while you can blame yourself for any screw-ups at your own winery, you can't really blame your custom facility for many of their mistakes. Every custom crush we know of requires that you carry your own insurance Well, yes, you can blame them, but you'll still have limited recourse. You'll ultimately need to negotiate for any compensation. That's why we can't stress enough the importance of buying insurance from an agent who knows the wine business, and an underwriter that will respect and work with your agent. Think about this, for example: Does an accidental free SO2 add of 200ppm to your best Chardonnay fall under contamination that is covered by your policy, or is it excluded because workmanship is not covered? Get the best policy and these gray areas will work out in your favor.

Cost

What does it cost to make your wine at a custom facility? The prices are all over the board depending on where the winery is located, with whom you are dealing, and how much wine you want to mak e. Typically, most custom crush wineries charge a flat fee based on grape tonnage or case production. Either way, you--as a winemaker--will have to figure your final cost of goods by the case, so it's kind of a moot point.

We'll talk cases for the purposes of this column. Usually, the more valuable a facility's real estate, the higher your bill will be. A realistic average in California ranges from about $30 to $55 per case. The upper range makes it pretty hard to produce a "value" wine, no matter how little you might pay for the grapes.

So what's a reasonable price? That depends on what type of a program you are starting. Do you want to make a $10 wine or a $100 wine? Or maybe somewhere in between? The question you need to ask yourself is this: How much can you afford to pay and still make money? There is more custom capacity available now than there was several years ago. Prices might be more negotiable than you would think.

Look for the best fit. As you look for a place to make your wine, remember to think about the following: Is it a cookie-cutter kind of environment, or are the people there open to your ideas? Just how flexible are they? Will they be creative in helping you solve your special issues (at no extra cost)?

And what about you? Are you high-maintenance, or are you the type who will be OK with whatever is done to your wine (within reason)? There's nothing wrong with being high-maintenance, but you'd better let your prospective custom winery know about it in advance. Otherwise, you risk being severely frustrated and disappointed. Talk to the general manager or managing winemaker about this, and in the process, you'll get a feel for his or her personality, which really sets the tone for the whole operation.

Don't forget to match your style with the facility's strengths. Do they already make the style of wine you want to make? You'll need to know if they have the technology or know-how to address your requirements. If not, you may have to buy or rent the equipment they don't have. Make sure to plan for this ahead of time and factor in the costs.

For best results, you've got to find a facility that fits your personality, or one that at least has a personality. We really believe that the character of the people making the wines somehow manifests itself in the final product. OK, call us spiritually inclined. That's not to say you should look for cellar workers dressed in monks' robes, but perhaps a little Bob Marley played over the cellar boom-box is a good thing.

Taking the plunge

Some of America's most highly respected wines have started out in custom crush facilities. Many of the so-called "cult" wines today are still made this way. The trick is to find something that works for you. It's out there, but you'll have to work hard to find it, and then work harder to make sure things run smoothly. If, at crush, you walk away and just hope for the best, chances are you'll get out what you've put in. And it probably won't taste like the wine you hoped for. But if you are a willing participant, taste your wines at regular intervals and talk to the production staff, you'll find your wines can be everything you have imagined.

Jeff Morgan of Napa Valley and Daniel Moore of Sonoma County are partners in M Squared Wine Consultants, m2wine.com, and jointly own and operate SoloRosa and ZMOR wineries. Morgan also makes two kosher Napa Valley Cabernet Sauvignon wines: Covenant and RED C.
 
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