WineInk: Wine and math
It’s all about the numbers
2015.97 points. $1,000. ABV 14.9.%.
Which of those numbers is most important? If you are in the wine business, all of them.
A solid vintage, a high rating from the Wine Advocate, the price per bottle of one of California’s cultiest cult Cabernets, and the percentage of alcohol of the wine in the bottle. These are just four examples of number-related information vital to the business of wine.
I have often said in this space that wine is about so much more than just taste. The study of wine is about sociology, geology, ecology, and climatology. It is about chemistry, and, yes, it is perhaps most importantly about business. Because at its core, wine is a business just like any other, and it requires a solid understanding of the numbers, the dollars, the Euros, and the pounds that drive that business. At no point was that made any clearer than this past April when the “wine industry’s bank,” Silicon Valley Bank, was seized by the government, creating a stir for all those who had accounts with the bank.
Making wine is an expensive process. For starters, it requires land and lots of it, either owned or leased. Then there is the root stock and the time it takes — generally three years or more from planting to when the first fruit is ready — to even consider making wine. That is three years with expenses but no income. And your costs start at the very start. Specialized equipment, tractors, optical sorters, fermentation tanks — all are sold for a premium. Then there are the barrels to age wines. These can cost around $1,000 each and quality French Oak can be even more expensive.
Once you have acquired the land, planted the vines, harvested, and made the wines, the real fun begins. Now all you have to do is convince enough people that your wine is the one worth buying instead of the thousands of other wines already being marketed, some made from the same grapes in the same region and in the same vintage as your wines. Packaging and marketing expenses can frequently outstrip those spent in the production of the wine.
But for the sake of conversation let’s look at some of the numbers winemakers consider when they begin to look at what their vineyards can produce.
In this country, the standard mode of measurement for land is the acre. An acre is just shy of 44,000 square feet, or a little smaller than a football field without the end zones. In other parts of the world, the measurement used is the hectare, which is equal to just under two and a half acres. We’ll use the acre because, well, we’re here in America.
Now an acre of land can — based upon the variety of the grapes grown, the way they are trellised, and the desire for the level of quality — host anywhere from 600 vines on the low end, with 11×6 foot spacing of the vines, to as many as 2,700 vines in a mass production vineyard. Each vine will produce, on average, approximately 40 clusters of grapes depending upon the techniques used by the grower. And each cluster will have somewhere between 75-100 grapes, which will weigh over a pound per cluster.
A high-end winery will usually shoot for picking somewhere between two and four tons of grapes per acre. Using that as a model, that means in order to yield four tons of grapes you need about 800 vines.
So how much wine does four tons of grapes produce? Well, on average, a ton of grapes will crush down to around 160 gallons of wine. Multiply four times (tonnage) by 160 (gallons) and you get 640 gallons of wine from your 800-vine acre.
Now, a traditional-sized wine barrel holds 60 gallons of wine, which produces around 300 bottles or 25 cases, as there are 12 bottles of wine in each case. And 640 gallons would fill a little over 10 barrels. So if you multiply 10 barrels by 25 cases by 12 bottles, you get 3,000 bottles of wine on your planted acre or just over 60 cases per ton.
All of these numbers vary based on the vintage and a plethora of other factors. But it is up to the winemaker to constantly monitor not just what is happening in the vineyard, but also in the winery, as well. Too much juice coming out of the vineyard can mean a shortage of fermentation space. It can also require more barrels. These calculations are imperative for each pick.
Then there is the math that goes into pricing a bottle or glass of wine in a retail location. Let’s take a look at some of the numbers of wine starting with a bottle and working backward. A full bottle contains 750 milliliters of wine. That works out to a a fifth of a gallon, or just over 25 ounces. Who cares? Well, start with a restaurant or bar that is selling premium wines by the glass.
The average pour, or the amount of wine in a glass in a bar, is right around 5 ounces. If the bottle costs the bar, say $20 wholesale, and they are charging you $10, a reasonable price for a premium pour (Where in Aspen can you get a glass of wine for $10?), then they are making $50 for the five glasses they pour from that bottle. Or two and a half times more than they paid for it. You can see why by-the-glass wine sales can be the most profitable product in a restaurant.
Want to be in the wine business? It helps to know the numbers.
2015 Screaming Eagle: The Flight
Those numbers at the beginning of this WineInk? Those represent a bottle of Screaming Eagle: The Flight.
2015 is the vintage, 97 points is the score it received from Robert Parker’s The Wine Advocate, $1,000 represents the cost of the bottle — if you could get it — it would be actually somewhere north of a grand, and it was bottled at a hefty 14.9% ABV. This is an anomaly, but I thought I would make note of this wine here because it is the most expensive bottle of wine that I own. And yes, it was a gift. And no, I have never tasted it, so I can’t give you wine notes.
The cost of producing this wine, which hails from the Oakville appellation in Napa Valley, arguably the most expensive real estate in American wine, is incalculable, though I’m sure that the producers can map it to the penny. But no worries, the owner of Screaming Eagle is none other than Stanley Kroenke, whom you know as the owner of the Denver Nuggets, the Colorado Avalanche, and the Los Angeles Rams. This month, Forbes put his worth at just shy of $13 billion, putting him — currently – at No. 141 on the list of billionaires.
He can afford the finest in French Oak.