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THE

Photo Courtesy of: The Unified Wine & Grape Symposium

Tadeshow Issue 2013

RAPEVINE G

Your Best Viniculture Source Connecting Suppliers With Buyers

From Vine to Wine Save Money by Reducing Racking Losses, Pg 7 Crafting a More Creative Label, Pg 11 Reducing Current Tax Liabilities, Pg 33 Vineyard Equipment in Today’s Changing World, Pg 39 Setting Free Canada’s Grapes, Pg 50


Editorial Content • November - December 2013

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THE

ricker Group, LLC

RAPEVINE G

Your Best Viniculture Source Connecting Suppliers With Buyers

President & Publisher

Jeffrey D. Bricker Vice President

Cyndi C. Bowlby

In The Winery

Sales Manager

Bart Crotts Legal

David Hoffman Marketing

Miguel Lecuona Senior Staff Writer

Mike Marino Staff Writers

Robert Gluck April Ingram Neal Johnston Jessica Jones-Gorman Nan McCreary Contributing Writers

Chuck Andracchio Thomas J. Payette Judit Monis, Ph.D. Bricker Group, LLC 805 Central Ave., Suite 300 P.O. Box 1590 • Fort Dodge, IA 50501 E-mail: jeff@thegrapevinemagazine.net Website: www.thegrapevinemagazine.net The Grapevine Magazine targets the national viniculture market and located in Fort Dodge, Iowa. The Grapevine Magazine is printed bi-monthly and distributed to the most qualified buyers. Opinions expressed in The Grapevine Magazine are not necessarily those of the publication personnel, but of the writers who contribute stories to The Grapevine Magazine. ERROR RESPONSIBILITY: The Grapevine Magazine is responsible only for the cost of the ad for the first incorrect insertion of the ad. Each insertion of an advertisement is proof of publication and it is the responsibility of the advertiser to check the correctness of each insertion. The publisher shall not be liable for slight aesthetic changes or typographical errors that do not lessen the intent of the ad. No adjustment can be made for advertisements not published. In the event of any error in an ad for which the publisher is liable, the liability is limited to adjusting that portion occupied by the error in relationship to the entire value of the advertisement. No adjustments will be made 30 days after initial insertion date.

Trademarking: Selecting a New Wine Name . . . . . . . .4 Save Money by Reducing Racking Losses . . . . . . . .7 Crafting a More Creative Label . . . . . . . . . . . . . . . .11 Life-Cycles (Part 3) . . . . . . . . . . . . . . . . . . . . . . . . . .15 Distilled Spirits & Wine Equals a Healthy Bottom Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 Tassel Ridge Winery Puts Winemaking on the Iowa Map . . . . . . . . . . . . . . . . . . . . . . . . . . . .24 Scientific Support - How Guidance Helps New, Prospective Vintners . . . . . . . . . . . . . . . . . . . . . . . . .30 Reducing Current Tax Liabilities . . . . . . . . . . . . . . .33 Most Advanced Sustainable Wastewater Treatment System . . . . . . . . . . . . . . . . . . . . . . . . . . .35 Laetitia Vineyard & Winery Turns 30 . . . . . . . . . . .37

Around The Vineyard Vineyard Equipment in Today’s Changing World . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39 California Certification Program . . . . . . . . . . . . . . . .43 Rhino Tool Company Donates Gas-Powered Post Driver to “Flag Man” . . . . . . . . . . . . . . . . . . . .46

International News Setting Free Canada’s Grapes . . . . . . . . . . . . . . . . . . . .50 The Changing Face of the U.K. Wine Industry . . . . . .53

All contents of The Grapevine Magazine are Copywright © by Bricker Group, LLC

Wine Sales in Russia to Grow to 2017 . . . . . . . . . . . . .55

CHANGE OF ADDRESS: Please send new address and phone number along with “The Grapevine” mailing label or email changes to editor@thegrapevinemagazine.net

Quality & Pricing Drive the Still Wine Industry in Germany to Grow to 2017 . . . . . . . . . . . . . . . . . . . . . . .55

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The Grapevine • November -Decmber 2013


Advertiser Index • November - December 2013 Naming a new wine can be very tricky, The name of many other products or services can present an issue.

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Distilling and craft beer brewing has been added to the growing diversification mix of today's winemaker.

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In today's competitive marketplace, vineyard equipment is constantly evolving to improve productivity, efficiency and quality.

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Until just last year, it was illegal for anyone in Canada to carry a bottle of wine across provincial boundaries, but has anything changed?

Page 50 ON THE COVER: The Unified Wine & Grape Symposium is the largestof its kind in the Western hemisphere. See Page 9 for more information on this year's event.

The Grapevine • November - December 2013

Advertisers Index A&K Cooperage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 American Colloid . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 Apex Publishers . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46 Bergin Glass Impressions . . . . . . . . . . . . . . . . . . . . .12 Blue-X Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . .49 Bouchard Cooperages . . . . . . . . . . . . . . . . . . . . . . . .18 Branson Tractor Co . . . . . . . . . . . . . . . . . . . . . . . . . . .41 Brick Packaging . . . . . . . . . . . . . . . . . . . . . . . . . . .Pg 1 Cedar Ridge Vineyards . . . . . . . . . . . . . . . . . . . . . . . .31 Eclipse Technologies . . . . . . . . . . . . . . . . . . . . . . . . .36 Enartis Vinquiry . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34 Eurofins/STA Laboratories . . . . . . . . . . . . . . . . . . . . .44 Flame Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . .41 Franmara . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .BC Gempler's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56 G-M-I Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22 Hanna Instruments . . . . . . . . . . . . . . . . . . . . . . . . . .IBC Hoffman Patent Group . . . . . . . . . . . . . . . . . . . . . . . . .6 Infaco-USA, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48 Innovative Sourcing . . . . . . . . . . . . . . . . . . . . . . . . . .14 International Label & Printing . . . . . . . . . . . . . . . . . .16 Isagro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44 JACTO, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49 Jim's Supply Co., Inc. . . . . . . . . . . . . . . . . . . . . . . . . .48 Jingles Barrel Brackets . . . . . . . . . . . . . . . . . . . . . . .38 KCI Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Kuriyama of America, Inc. . . . . . . . . . . . . . . . . . . . . .17 Lechler Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 Leibinger Ink Jet . . . . . . . . . . . . . . . . . . . . . . . . . . . .38 Mark Michael Mackew Professional Corp . . . . . . . .48 Micro Matic USA Inc . . . . . . . . . . . . . . . . . . . . . . . . . .35 Midwest Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Milwaukee Instruments . . . . . . . . . . . . . . . . . . . . . . .25 Munckhof Manufacturing . . . . . . . . . . . . . . . . . . . . .49 National Storage Tank, Inc. . . . . . . . . . . . . . . . . . . . .14 Olde Tradition Spice . . . . . . . . . . . . . . . . . . . . . . . . . .31 Pasco Poly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 Phase-A-Matic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34 Progressive Ag Inc . . . . . . . . . . . . . . . . . . . . . . . . . . .40 Progressive Grower Technologies . . . . . . . . . . . . . . .47 Pronto Plant, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . .42 Quality Wine Barrels . . . . . . . . . . . . . . . . . . . . . . . . . .37 Raynox, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Recoop Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 Reliable Cork Solutions . . . . . . . . . . . . . . . . . . . . . . .37 Rubber Development . . . . . . . . . . . . . . . . . . . . . . . . .45 Salina Glass Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35 Shweiki Media . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Skolnik Industries . . . . . . . . . . . . . . . . . . . . . . . . . . .16 Solex Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . .49 Tenax Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . .46 Texas Plant & Soil Lab . . . . . . . . . . . . . . . . . . . . . . . .45 The Boswell Company . . . . . . . . . . . . . . . . . . . . . . . .23 The Hilliard Corporation . . . . . . . . . . . . . . . . . . . . . . .36 The Printed Drinkware Company . . . . . . . . . . . . . . .31 Thomas Cronin Real Estate LLC . . . . . . . . . . . . . . . .45 Titan-Rack . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Tricor Braun Winepak . . . . . . . . . . . . . . . . . . . . . . . .IFC Unified Wine & Grape Symposium . . . . . . . . . . . . . . . .9 Unitech Scientific, LLC . . . . . . . . . . . . . . . . . . . . . . . .18 Vacuum Barrier . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 Vertiflo Pumps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 Vine Pro/Tree Pro . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 Vintage Nurseries . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Vintners Global Resource . . . . . . . . . . . . . . . . . . . . . .22 Westfall Company Inc. . . . . . . . . . . . . . . . . . . . . . . . .10 Whatcom Mfg. Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .42 Wine Marketing Guide . . . . . . . . . . . . . . . . . . . . . . . .18 WineDoc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Winemaking Consultant . . . . . . . . . . . . . . . . . . . . . . .10 WS Packaging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32

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In The Winery • November - December 2013

When Selecting A New Wine Name, Do I Need To Avoid Names Used For Beer & Other Alcoholic Beverages? By David Hoffman

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aming a new wine can be very tricky. Not only should you avoid names already taken by other wines, but also you should consider other products and services. The name of a beer or hard alcohol can stand in the way of registration or use of your selected name for wine. In fact, the name of many other products or services can present an issue depending on a number of factors. A start up California winery named itself Bell Hill Vineyards and intended that its wine label would prominently display “BELL HILL.” Ms. Julia Martelli, owner and manager of Bell Hill Vineyards, filed a federal intent-to-use trademark application on BELL HILL for wine. Whether or not she had done a trademark search, we do not know. Ms. Martelli did a good job on the application itself. The Examining Attorney at the US Trademark Office found the application to be in order. Therefore, as is standard Trademark Office procedure, the application was published for

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opposition by third parties. Bell’s Brewery, Inc., a brewery in Michigan, opposed issuance of the registration on BELL HILL. It said that BELL HILL on wine would be confused by consumer’s with its mark BELL’S, which Bell’s previously registered for beer. No one gets confused between beer and wine (unless they have had too much of one or the other). But, that is not the standard for a finding of trademark confusion. The standard is whether it is likely that ordinary consumers of the first trademark owner’s products or services would be confused, when they see the second trademark in question, as to whether or not the goods or services are produced by or sponsored by the first trademark owner. The opposition proceeding in the Trademark Office is like a lawsuit. However, instead of a judge and jury, the Trademark Trials And Appeals Board (TTAB) decides the case. In this case, the TTAB looked mostly at four factors of an eight factor test for determining whether there was a likelihood of confusion between the two marks: 1) How close are the two marks? They said that BELL’S for beer was one word with a picture of bells next to it. This picture reinforced the meaning of the word as relating to bells. While BELL HILL had the word “bell” in common, it has a different meaning: BELL HILL sounds like a place.

The Grapevine • November - December 2013

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In The Winery • November - December 2013 2) How close are the goods? The TTAB said that beer and wine are related because both are alcoholic beverages and both often sold in the same stores. Occasionally they are made by the same company. 3) How strong is the first trademark? The TTAB said that the BELL’S mark was not famous and was not a really strong mark. 4) Are consumers sophisticated and/or is this type of good an “impulse” buy, or purchased after a lot of thought? The TTAB concluded that wine was generally not an impulse buy, and consumers, though not necessarily sophisticated, had some sense. On balance, the TTAB found that there was no likelihood of confusion. In this case, it took roughly four years. Ms. Martelli handled it on her own and to her credit again, she prevailed. Even without racking up tens or hundreds of thousands in attorneys’ fees, the proceeding took countless time away from her primary work on the winery. To illustrate that the comparison of trademarks on wine and on beer is fact specific, Franciscan Vineyards, Inc., the owner of the mark RAVENS for wine, was able to stop BeauxKat Enterprises LLC from registering the mark BLACK RAVEN BREWING COMPANY for beer.

1) Comparing the marks, the TTAB considered “RAVEN” in BLACK RAVEN BREWING COMPANY to be the “dominant” part of the mark. Why? Because ravens are all black, and “brewing company” is a descriptive part of the mark. The dominant part of each mark was essentially the same. Although RAVENS is plural and RAVEN is singular, the difference between singular words and plural words is usually of no import. 2) The TTAB had essentially the same conclusion on the relatedness of beer and wine as in the Bell’s case. 3) Although not famous, the RAVEN mark had some strength. RAVEN is completely unrelated to wine, and so is an “arbitrary mark” in relation to the goods. Arbitrary marks (and made up words) are strong marks.

On balance, the TTAB found that there was a likelihood of confusion. What did BLACK RAVEN BREWING COMPANY lose? This fight lasted about two and a half years, and must have cost quite a bit of money.

CONCLUSION When selecting a trademark in the wine industry, do not ignore trademarks of other goods and services, especially those of related goods such as beer and other alcohol products. Moreover, just because you have reached the right conclusion that your mark is different enough from the rest to be okay to use and register, does not mean a third party won’t reach the opposite conclusion. You must also consider whether or not the mark is close enough to another mark that the trademark owner may still come after you. I call that being too far into the “gray zone.” Stay out of the gray zone, unless you have a substantial risk tolerance and litigation budget to back up that risk tolerance.

Turning New Ideas, Names, Products & Computer Programs Into Powerful Intellectual Property David Hoffman has been an attorney practicing exclusively in intellectual property law (patents, trademarks, copyrights and unfair competition) since 1985. Mr. Hoffman represents multinational companies as well as numerous start up to medium size businesses. He both litigates and procures rights for his clients, and with his philosophy of procuring the broadest rights possible, performing good clearance procedures, and negotiating, has successfully avoided and minimized litigation for clients he counsels. Mr. Hoffman has taught for a patent bar review class, has authored articles and given lectures on intellectual property, and has been named to Who’s Who Millennium Edition and Who’s Who Among Rising Young Americans in American Society & Business.

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4) The TTAB appears to have reached a similar conclusion regarding the sophistication and attention of purchasers.

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The Grapevine • November - December 2013

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In The Winery • November - December 2013

$AVE MONEY by Reducing Racking Losses By Thomas J. Payette

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Lees Filter Press Operation

uring harvest, the winemaking staff will often cold settle the juices for white wine making and potentially for cold pressed reds to be made into a blush style wine. Many smaller wineries may collect the sludgy bottoms of the tank and try to ferment them unsuccessfully. Others will simply allow the bottoms to go down the drain. Both approaches result in an immediate financial loss to the winery.

gallons left over may actually result in roughly 250 gallons of clean juice after filtering through the lees filter press. This may, after normal winemaking losses, result in a 1200 bottle recapturing of wine from “waste” and that, represented in dollars at an average $10.00/bottle return, is $12,000.00. Soon this non-glamorous and down right dirty operation becomes of interest! Not to mention the wines usually ferment out very nicely – sometimes better than the clear racked wine! The above calculations are an average. Results may vary depending on many juice components such as pectin, pH, temperature and solids content from the crush pad equipment. The individual winery tank sizes and configurations may also affect these numbers.

Setting up the Filter: It is always recommended to follow the directions that come with the unit when possible. Please refer to these first as your primary source of information. If directions are unavailable, use the guideline below to get started. 1. Back off the screw portion on the lees filter press to open the gap for access to the filter plates.

Photo: Less Filter Press Credit: www.winemakingconsultant.mobi Another approach through the use of a lees filter press unit will allow for the recapturing of these “bottoms” off their rackings and allow these juices to be fermented into a very desirable wine. The lees filter press units have often been said to pay for themselves in the first two to three years if used properly. This may happen sooner depending on the size of the winery and the ratio of red to white wine production for a particular winery.

Financial Impact Example: If a winery presses 40 tons of white grapes per year one could expect the following depending on the variety of white grapes and their average yields. Forty tons may result in approximately 6900 gallons of juice. After cold settling for approximately 24 hours, the winemaker may rack off 6600 gallons with a potential loss of nearly 300 gallons. The 300

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2. Carefully examine the filter plate cloths (canvases) and look for abnormalities such as rips, tears or creases. All the cloths should look the same. 3. Examine the filter plates and make sure an understanding is established on the unit’s juice flow inside the filter. Make sure all the plates line up properly and that the end plates are positioned properly at the ends. Does the plate configuration align with the fixed plates on the filter ends? Does the flow of juice in the unit make sense to you? 4. Determine where the juice goes into the filter and how it exits. 5. Close the unit and pressurize to the normal or recommended pressure making sure all the plates are firmly held into place. Check that the canvases are not pinched or creased possibly creating a leak when filtration begins.

Process: This process is very easy once one gets the hang of it. At

The Grapevine • November - December 2013

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In The Winery • November - December 2013 first the winemaking staff may look at the process in disbelief that another operation will take place during crush. After time, it is a fun rewarding process and many can master ways to reduce the mess greatly. Using this step by step operation will become a template for helping this process along toward success. Set up the lees filter properly and according to the instructions if they were provided. If not – study the piece of equipment to understand how it works (see above). The overall process summary is that the sludge juice is mixed with DE (diatomaceous earth) and under large pressure forced through canvas filter covers. The canvas will hold back the DE and dirty juice mix sludge and will ultimately become the filter matrix.

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1. Perform a clean racking on a white wine juice after cold settling with enzymes and SO2 only. One may use other fining agents potentially at this step. The main agent not to use is bentonite. This will surely throw off the Lees Filter process and lead toward major frustrations and/or filtration failure. 2. Collect the racking bottoms in another tank or leave them in the same tank if one can perform the rest of the procedure properly in the tank in which the juice was initially collected. 3. Measure and record this volume of juice settling bottoms for internal and TTB recording purposes. 4. Be able to continuously mix these juice bottoms with a guth style mixer or with a food grade plastic shovel. (For time reasons the author recommends a guth style mixer in the racking valve of the tank) 5. Add 50 pounds of 545 DE per 1000 liters (264 gallons) of juice bottoms and continue to mix. (Please investigate DE and its potential hazardous conditions before using this product and remember to wear all safety equipment necessary. This product may be hazardous to your health. Consult your onsite Materials Safety Data Sheets) 6. While mixing continuously attach a hose to the lees filter press inlet from the bottom valve of the “sludge tank”. 7. Open the valve and allow the juice DE mix to flow to the unit inlet. 8. Start the operation of the unit with the plates well sealed together at the proper recommended hydraulic pressures. 9. Have a piece of hose lead into another tank or bucket to catch the first amount of filtrate that comes through. This is often very dirty at the beginning of the operation. The winemaker may return this juice to the sludge tank to eventually be filtered again. (This amount is often less than 10-15 gallons depending on the unit, juice and the operator) 10. Once the filtrate is “clean” start to capture that juice in another tank. Record volumes as needed. 11. Continue to monitor the process by checking on the unit from time to time. Listen to the unit as a rhythm will be established and one can watch the unit out of the “corner of his or her eye”. 12. The pressure build-up will progress over time and the unit pump will engage with larger time intervals inbetween. This is a sign the unit filtration is clogging and

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In The Winery • November - December 2013

the unit may need to be re-established removing the cakes formed. The flow rate will slow and become an unproductive process.

Important Note: Keep an eye on the operation and the mixer. As the juice/DE mix nears the racking valve (typical mixer area), turn the unit off to avoid mixing to a “froth”. At this point substitute with mixing by hand using a food grade shovel or similar action.

Stopping the Unit: 1. When to stop the unit is a judgment call. This can be inbetween pressloads from the crush pad or other operations of the normal winery day. 2. Turn off the machine. 3. Unplug the unit (optional but recommended). 4. Immediately shut the valve at the receiving tank. 5. Immediately shut off the valve at the sludge bottoms tank. 6. Drain off any clear juice and place in the filtered juice tank. 7. Depressurize the unit if drawing off any clear juice did not perform this operation already. 8. Release the hydraulic pressure cylinder and back the filter plates off one by one. 9. While moving the plates backward, try to remove the solid “cakes” of DE and solids from in-between the canvases. These may remove easily if the process went well

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and the ratio of DE to juice mix was formulated properly. If a slimy cake developes – change the DE to juice mix ratio. [Increase the DE amount] 10. Once all of the cakes have been removed rinse the unit, the canvases, all interior and exterior portions and reassemble the press to start again. 11. Plug the unit back in, open valves as necessary to restart the unit and restart the unit. Remember to catch the first filtrate since this may not be as clear as desired and return to the unfiltered tank sludge bottoms. 12. Repeat as necessary.

Collecting Juices: Multiple lots: During harvest the winemaker may find the tank space crunch and the speed of the fruit coming in the winery door may necessitate blending of pre-fermented juices. This can been done with success: however, strict records need to be kept to be able to track certain lots, with chemical data, so adjustments can be made to each juice and its contribution to the blend. Juices have been stored with success, as well, during the early stages of harvest for a couple of days. If the winemaker presses 4 tons on one day and more fruit is expected in the next two days, the winemaker may chill the juice bottoms collected, potentially add additional sulfur dioxide, and store the juices until a large enough run has been gathered to justify starting the lees filter press operation. Collect all volume data before and after operation to be able to report all blending activity.

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In The Winery • November - December 2013 Reducing the Mess: Every winery layout and lees filter will vary significantly. Try, however, to locate your lees filter press close to an electrical outlet that will run the unit and close to your raw materials such as DE, sludge bottoms (or a permanently designated "sludge bottoms" tank) and crush pad. The lees filter press should be located in an area near a drain and water source so hosing down the unit will be convenient and reduce the mess. Place the filter where the blow-by rinse water will not land on electrical plugs or other areas and equipment that may be difficult to clean afterwards. Use warm or hot water since this will help greatly to neutralize and dissolve the sugars of the juice from the equipment and canvases. If possible try to capture the “cakes” of DE as they fall off the filter plates after disassembling the lees filter. This can be done with a bin or tub. Otherwise shoveling may be needed. One does not need to clean the unit immaculately in between cycles or setups in one particular day. More of a gross cleaning will suffice to set the unit back up and get rolling again.

Some of the downfalls of a Lees filter Press: If a great understanding of how the unit works is not established the unit can become a great source of bad cross-contamination. The units are easy to clean but one must make sure to flush out areas such as the piston pumps, surge tanks, inlet centers, sample valves, check valves, canvas sheets etc. Flush

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all parts with copious amounts of water. Make certain to store the canvas cloth plates so air may pass between them after cleaning, otherwise a mold/mildew may form. Store the unit inside when not in use. Do not leave the unit outside for extended periods of time after its use. Sunlight will break down the canvases and they will need to be replaced sooner than normally expected. This goes beyond the normal problems associated with storing any electrical equipment outside. Space: These units are usually large size in order for them to do their job properly. They take up large amounts of space when not in operation.

Conclusion: The lees filter press is a very rewarding operation to the winemaker and the financial bottom line of the winery. Once the cellar team integrates this extra operation into their harvest routine it becomes a "piece of cake". It looks difficult and laborious but it can become easier if set up and run properly. Investigate your operation to see if it makes financial sense to add this piece of equipment to your cellar. Check out these money saving units at your upcoming trade shows.

Owners: Please reward the cellar crew in some fashion for going this extra step. It is a very dirty and labor intensive operation at the busiest time of the year.

Celebrate and reward!

Winemaking Consultant Thomas J. Payette "Winemaker of the Year"

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Winemaking Experience Tom Payette, a premier hands on and analytical winemaking consultant, serves clients through out the United States. He focuses on winery and vineyard start-ups, expansions, still and sparkling wine production and general winery issues.

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In The Winery • November - December 2013

Crafting a More Creative Label Etching & Screen Printing Processes Offer Winemakers Innovative Branding Options By Jessica Jones-Gorman

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creen printed bottles are not exactly a traditional packaging option for winemakers: The multi-color template and all of its floating icons and in-your-face fonts aren’t made to represent storied vintages. But looming on the shelf among hundreds of ink-and-paper-pasted varieties, competing for the attention of a young, trendy wine drinker, modern label makers say the screen printed bottle has become a successful marketing and branding tool.

“When you’re shipping a palette of wine and one bottle breaks, it usually pours through four or five cases, spattering all of the paper labels and rendering them unsellable,” Bergin said. “If a screen printed bottle breaks, you wipe it off and rebox the wine. No stains, no losses.” There’s also a 360º design surface to work with and vertical height surface 1/2” inch from base of the bottle to the shoulder. The bottle design

“When a consumer is shopping for wine at the grocery store or wine market, they’re almost blinded by paper labels because there are simply so many,” noted Mike Bergin, President and CEO of Bergin Glass Impressions, Inc., a Napa Valley-based commercial wine label printer which specializes in artisan etching and screen printed labeling. “A screen printed bottle stands out because it’s something different,” Bergin continued. “Buyers are intrigued by the packaging and that’s critical because it’s what draws the consumer in. I would say at least 75 percent of the buy is based on packaging alone.” Screen printing, also known as ACL – applied color labeling, is a process by which ceramic paint is applied directly to the surface of a bottle and fired through a furnace. After firing at temperatures of up to 1180° F, the label design is permanently fused to the glass. The unique look serves as a pretty significant brand builder, Bergin says, and the paperless wine labels are favored by clients and designers who want flexibility and creativity far beyond what paper or pressure sensitive labels can offer. But the pros of the process extend way beyond branding. “When you’re bottling wine the achilles heel is always the labeler,” Bergin told The Grapevine Magazine. “The corners can peel, the paper can scuff or get roughed up. They’re also pressure sensitive and can wrinkle. In addition if you’re bottling the wine really cold, you have to worry about condensation. That’s why from a production standpoint, screen printing is such a dream. There’s no bubbling, tearing or crooked labels to worry about. A screen printed label does not degrade. Store it in a dusty cellar for 10 years, you can wipe it with a soft cloth and it will look like it was just printed last week. Plus, breakage worries and the resulting collateral damage is also lessened.

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In The Winery • November - December 2013

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The Grapevine • November - December 2013

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In The Winery • November - December 2013 can even be printed in precious metals like gold and platinum. There’s ease in the bottling process too – small wineries and their mobile bottlers simply have to fill, cork and foil, the labeler is never turned on. The value for winemakers isn’t so bad either. “It’s a cost effective alternative to paper labels,” Bergin told The Grapevine Magazine. “Screen printing costs are a matter of case quantities and are usually custom quoted, but when you break it down, ink labels are usually significantly more expensive.” It’s a trend that surfaced in the wine industry more than a decade ago, bringing a new look to shelves across the country. But the popularity of screen printing is now growing. In The Grapevine Magazine’s 2013 Reader’s Survey, 87 percent of winemakers surveyed planned to purchase glassware for their business in 2014. Eighty-two percent of readers were interested in exploring new technology and 27 percent specifically asked about the screen print and etching processes. And many labelers say it’s the design options that make these labels so intriguing. “I love the cleanness of screen print,” Bergin said. “You can create incredible designs with two to four different colors, using the bottle surface as your canvas. And you can print 360 degrees around the bottle, which you cannot do with paper. It’s elegant, understated and powerful.” Although the screen printing technology has been refined in Europe and many of the best machines are produced in Italy, Germany and France, Bergin says you don’t really see a lot of European winemakers making use of screen printed bottles. “A lot of the high end vodka brands use it and other liquors will usually employ a screen printed label but as far as French, Italian and Spanish wines go, there are very few screen printed labels,” Bergin said. “Many of those winemakers are very traditional, so they want to use the same labels that they have been using for hundreds of years. California believes in new world marketing, so they are much more open to this type of packaging approach. You very rarely see wineries in Europe doing this process but it’s wonderfully embraced in America.” The even more

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complex artisan technique of bottle etching and hand painting is also enjoying a resurgence in the winemaking industry. “Screen Printing is our power and glory, but etching accounts for about eight percent of our revenue,” noted Bergin, who employs a staff of 12 for its hand-crafted services - eight artisan painters and four etchers in total. “The etching process allows us to do some incredibly complex work and we can recreate any label or design, no matter how intricate.” The etching process which can take anywhere from 30 minutes to 10 hours to complete, depending on the complexity of the design – involves a sandblasting technique which etches carefully designed logos and words directly into the glass which is then hand painted right on the bottle. The process is usually reserved for specialty pieces, large bottle formats offered strictly to wine club members or as wine buying incentives. Winemakers also use the pieces for charity auctions or as marketing generators. “The etched bottles were pretty much always used for charities and special auctions and then the larger winemakers decided to create special distribution incentives to move cases of wines,” Bergin told The Grapevine Magazine. “Those three liter items were engraved and hand painted, some bonus bottle you’d get if you ordered something like 10 cases of wine. That’s how the distribution incentive program was born.” Other etched bottles are held for the winemakers’ libraries or collected by enthusiasts. They’re usually all numbered and featured in limited edition quantities, creating even more of a desire for what Bergin calls the “Rolls Royce of wine bottle decorating.” “Etching and screen printing are two widely different processes,” noted Ole Westergaard, vice president of Cooper & Clement, Inc., a promotional product supplier in Syracuse, NY, which markets a range of etched and screen printed wine glasses and goods. “Etching is done by hand, one piece at a time, by applying a mask on the bottle and blasting away part of the glass going as much as a 1/16 deep into the glass. It has no color and details have their limitations. Graphics and fonts are then hand painted into the etched area after blasting occurs. The cost per bottle is very high,

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In The Winery • November - December 2013 $20 or more, so in no way does it lend itself to mass volume and is never used for inexpensive wines or even moderately priced wine.” But there is still a thriving market for this type of specialized service. “We etch about 10,000 bottles a year, creating large format pieces for a variety of different wineries,” noted Stu McFarland, Owner and President of Etched Images in Napa, who has been in the etching business for 22 years. “Most of our business comes from Napa and Sonoma Valley and some wineries from the central coast. But we have a really good customer in Australia and just finished an order for a business in Japan. Our customers use these bottles for advertising purposes and branding, but they’re also distributed to wine club members as well.” It’s an elite product, McFarland explained, describing the painstaking effort each bottle requires. “Every year we create a Darius series for Darioush which is highly complex,” McFarland said. “It takes about 20 minutes to sandblast and etch each bottle and then there’s about four hours of painting. There’s a lot of complex colors, lots of fine painting with little tiny brushes so we only do about 150 of those.” Depending on the complexity of the artwork, Etched Images pricing starts at $16 per bottle for an order that exceeds 289 750ml bottles.“We have real artisans working for us because this is a process that requires so much training and skill,” McFarland concluded, detailing his staff of 17. “These bottles are collectibles, artwork if you will, so you’re not going to see our work on a grocery store shelf.”

company in Yakima Washington which works as a liaison between winemakers and screen printers, says alternative bottle labels – etched or screen printed – certainly create a branding buzz.“It’s unique and screams added value,” Brader said. “That type of packaging naturally draws attention to the product.” That’s why Brader’s business offers a sort of turnkey distribution for small to midsize wineries, supplying the bottles and working as a design middleman between the artist at the winery and the art department at the screen printer. “We’re a marketing, consulting and packaging company that brings all facets of the process together,” Brader said. “If you don’t want to use a standard paper label, we come in and create one stop shop atmosphere. We sell the bottle, make arrangements to deliver it to the screen printer and further make arrangement to print cartons and enhance their branding at the grocery store for an endcap. It’s all part of better distribution which in turn increases branding and marketing.” For many winemakers who are simply focused on making good wine, it’s an important service. “What we find in the market is that our customers are very artistic and can make great wine but they often don’t have the marketing or sales staff to run a business,” Brader concluded. “So we go in and help customers in the areas they need assistance and this is usually one of them. They want to do a screen printed brand but they don’t’ know where to start, so we take control of all of the marketing and brand management while they focus on making and selling wine and keep more profit in their bottles.”

Fred Brader, President of Innovative Sourcing, a packaging

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In The Winery • November - December 2013

Life-Cycles

- Part 3

By Miguel Lecuona

Which business are you in -- wine as a drink, or wine as an experience?

D

o not expect customers to remain loyal to your business. Rather, insist that your business remain loyal to them.

This is the basis for all customer relations. Read this 10 times, skim the rest of the column, and I would believe your time would be well spent! That said, I am happy to present Part III of Life-cycles, a primer to improve Customer Retention and develop your own approach to customer loyalty.

The Wine Club Customer Lifecycle

In Life-cycles Part I, we defined whether your winery is in the Wine-as-Drink business, or Wine-As-Experience business. We presented the Customer Lifecycle model, and created a tactical grid for your team to develop profiles, messages and plans for sales growth based on the “one day drive” test. Lifecycles Part II probed key concepts of customer retention, focused the reasons for customer cancellations, and spent an agonizing amount of time to persuade you of the folly of trying to outrun your customer defection rate with discounted sales. Now, being sufficiently impressed with the importance of life-cycle marketing and retention, what exactly should you do about it?

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First Things First - People It is tempting to trot out a bunch of ideas -- anniversary awards, CRM-driven sales offers, contract minimums, loyalty point programs -- to create the trappings of a winery retention program based on carrots and sticks. (It reminds me of the old Cheers show, and barfly Norm’s blunt admission when discussing a questionable job with his boss: “I can’t be bribed, and I can’t be threatened. But put those two together and you’ve got yourself a deal!”) This approach does have the virtue of well intentioned activity and would certainly help matters. But as you are living this reality in the our beloved industry, let’s recognize that wineries, vineyards and vintages all operate on a long-term basis. We are interested in those programs, but only when the foundation for continued success is deeply engrained. Hence, life-cycles. Which brings us to you, the Owner. You may be a 4th generation farmer, a self-taught wine maker, or an investor going all in for your dream. Regardless, it’s on you to set the tone for customer retention with your staff. It’s easy to pick out the wine owners who put customers first. They take time out of their day to greet newcomers, meet “just one more friend” of club members, or hold an impromptu cellar tour and barrel tasting with a bridal party from a limo group. I love it when our marketing meetings are delayed for these reasons. When I tag along to watch this sort of interaction, the Owner Best Practices for Wine Club Member Loyalty spill out. • Being There: For wineries focusing on wine-as-experience, nothing is more powerful to your wine club members

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In The Winery • November - December 2013 - and for your staff - than an owner who is at the winery every day. The sheer delight that customers show when they meet the owner, the wine maker, or the grower of their favorite wine is a genuine pleasure, and one they want to repeat. Obviously, you must manage your schedule with some discipline, but if you want to increase loyalty of your wine club members, spend time with them. Informally at the tasting room, at every special wine club event, and when practical, on the road in their home town at private or ticketed tastings. • Tell it to their Face: It’s an obvious statement but one that bears repeating. Learn your Club members by name. Greet them by name. The worst thing is when repeat customers wander into the tasting room and nobody recognizes them. Have your staff prepare “flash cards” so everyone can match names to faces. Use facial recognition programs on iPad and photo programs. • Tag, you’re it: Use name tags at events so all members can overcome the “I should know you but I don’t remember” moment that permeates social occasions. And so that you can be assured of remembering everyone, too! Have nice tags made up for regulars when they arrive, and handwrite tags for new members as they join. Of course, tell your members about your Facebook page and to tag tag tag away whenever they can on all your pictures. • Pour it on: There is no better excuse for a personal, private moment with a guest than when the Owner is the one pouring the wine. Get a nice sturdy carafe/decanter for your barrel room, or a glass barrel pipe, and serve your customers! Use that opportunity to reinforce their visit, or better, invite them to participate in a special release opportunity or upcoming event. This is one of THE moments for your club member. Taste and enjoy your wine with them. • Develop Amabassadors: Your wine club is full of people who are ready to sing your praises, perhaps on a professional basis. Some will be in the industry -- in the trade, with a dedicated peer tasting group, perhaps contemplating their own vineyard ventures, or writing a wine education blog. It’s important to identify these industry resources within your membership, and when practical, consider an industryonly type of function that lets them convey your story to their own audience, or a discounted sampling program with some of your more interesting wines as an off-the-record perk for their tasting groups. Again, the point here is to respect the diverse interests of your members and reward their natural enthusiasm for your winery. (A CRM club management program will let these members identify themselves to you. We will discuss that in a future column). These may be “obviologies” (the art of not ignoring simple, important truths). I imagine you are checking a few of these off on your own activity list. But they are exactly the hi-touch moments that go a long way to ensuring your members just how special they really are to you. I hear them telling everyone how the highlight of the day was when the owner poured their favorite wine and invited them to the next event. Trust me,

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In The Winery • November - December 2013 other businesses would love to have these sorts of personal one-to-one interactions that should be a routine part of the day in your winery.

Your Place or Mine? How is your winery and facility set up to accommodate Club Members? Over the course of the year, how often will Members visit and participate in your events? These are important determinations for Loyalty, tying in with a challenging comment from Members: “I used to feel like this was my winery, but now it’s so crowded here, it doesn’t feel the same.” Many wineries in Texas are experiencing an influx of new customers, as the popularity of the Hill Country region reaches new heights. Articles in USA Today, the New York Times, and major regional bloggers all point to this region as one of the top wine destinations in the country. This puts pressure on wineries to assess physical space. After all, future wine club members come from this pool of new customer traffic. So you must find ways to hold on to those aspects of your winery that brought your first members to you, while accommodating the growth you need to succeed. Any discussion of facility planning requires both capital investment and operating expense budget issues. Assuming you have those financial considerations in mind, here are three ways to handle the continued growth of your wine club in a way that recognizes and rewards their loyalty while accommodating more new customers. 1. More Club Events: Many wine calendars are covered up with weekend tourist activity, association events, and general Wine Club Release parties. As your winery becomes increasingly busy with the normal course of business, your Wine Club Membership may feel crowded out by new arrivals and day-trippers. Alleviate this by scheduling more Member-Only events, both at your winery and perhaps at local restaurants. The important thing here is to communicate with your Membership and create exclusive opportunities to share time together. Off-peak dinner events; ticketed tasting events; chef-winery paired dinners at local restaurants. All of these can afford the growing wine club with more chances to participate. Granted, it does require more service time, attention and operating expense. But that’s why we’re here! 2. Add a “Wine Club Member” Room: If space and the budget are both generous, consider a Member facility on premise. I think this is a delicate choice requiring extensive planning and real care in implementation. This can be done poorly, and the correction is difficult, expensive and time consuming. There are several choices, and the sky is the limit. If you do go down this road, do not do it “on the cheap”, with a rope line and a couple couches inside your existing tasting room. A Members-only facility needs to be an upgrade in every way -- view, selection, service, and exclusive access. You can consider whether it is open for all hours, or just special occasions. The two best views: your own vineyard via covered multi-use pavilion and party station, or down a set of stairs into your own cellar, surrounded by bottles, barrels, candle light, and hidden pas-

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In The Winery • November - December 2013 sages. I’m not kidding! We don’t have the budget of Chateau Smith Haut-Lafitte to build a Goldfinger-esque trap door into the main floor to whisk visitors to a subterranean tasting room. But the more drama the better! And here is where you exhibit your own history, so Members can understand the winery they have joined a little more intimately. Membership should have its privileges! 3. Open Tasting rooms away from the main winery: A third option is to consider expanding your reach. Grape Creek Vineyards, on Wine Road 290 in the Texas Hill Country, has a beautiful winery and expansive grounds. They also opened tasting rooms in nearby Fredericksburg, and in Georgetown, a suburb north of Austin. Boxwood Winery in Middleburg, VA has a tasting room in Reston, the heart of the Dulles Corridor technology center. These remote locations can help bring their wines to new prospects, offering greater conversion opportunities. They can also make it “easy to do business with” for local club shipments and pickups.

Tools and Systems The purpose of these “People and Place” ideas is to proclaim that Retention and Loyalty marketing are fundamental building blocks of any winery. That said, today’s array of club management software programs, CRM tools, and online selling apps are increasingly helpful and valuable to take your sales, marketing and customer retention programs to the next level. Once we have the Owner shaking hands and serving wine, and

your Members feeling at home and entertained, let’s talk to the Wine Club Manager about these software tools. As your wine club grows beyond the notepad and spreadsheet, an investment in club software programs by eWinery Solutions, Nexternal, and Vinteractive can occupy a greater role in the way your winery is perceived by your club members. These programs bring an incredible capability to even the smallest winery, but require a dedicated level of attention by your staff, in partnership with the software provider. They are not trivial investments, and the prospect of using one is daunting. When it comes to choosing between an investment in computer software for the office vs a new tractor for the vineyard, you can guess the outcome. As I was told repeatedly in Bordeaux, “We are farmers!” Yes, but your customers buy on Amazon.com. So, this is worth consideration, and is a growing expectation. These programs will be covered in a future column of the Wine Marketing Guide. Until then, remember: Do not expect customers to remain loyal to your business. Rather, insist that your business remain loyal to them. Miguel Lecuona, Wine Marketing Guide LLC

Miguel Lecuona

Wine Marketing Guide

MiguelLecuona@mac.com Page 18

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In The Winery • November - December 2013

Distilled Spirits and Wines Equals a Healthy Bottom Line

By Mike Marino

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t was an exciting area of moonshiners and bootleg beer that has been romanticized in film and literature. Beer barron Al Capone fighting for control of the Chicago underworld during the dark days of Prohibition. Moonshiners in the deep south with illegal stills and souped up cars racing to outrun the Fed's on back roads in a race for profits. Gangland wars in Chicago with warring factions gunning each other down in the streets while speakeasies proliferated faster than bullets fired from a Tommygun! It was an era of violence, not to mention bad booze that was the foundation for the growth of organized crime. Today that "Godfather" scenario has all but faded into the dustbin of nostalgia, and has gone from zero to sixty as it is now a Medusa head combination of the distiller, the brewer and the vintner all rolled into one. Distilling and craft beer brewing has been added to the growing diversification mix of todays winemaker, and the winery of today is seeing an explosive surge of popularity in this growing phenomenon of libations multi-tasking. What is the reasoning behind this tasty trend? Is it for some aesthetic purpose to creatively explore new paths to offer the public a choice of "art in a glass" whether it has been fermented, distilled or brewed? Or is it driven by something more bottomline oriented to increase profits while increasing product lines? Of course when you increase product lines, you also increase the costs to produce it, along with now having to fight for shelf space for two or three product offerings as opposed to one..the wine! Don't forget marketing which will

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also now take you to where no winemaker has gone before to a marketing galaxy far, far away and you don't want your whiskey confused or competing with your Chardonnay. It's a trend that many are watching to see if this trend will lead to a boom or a bust, and will the wineries production of red wine keep the corporate books in the black! A lot of wineries in the Midwest began diversification over a decade ago. The economy at the time was not healthy some of the wineries decided that diversification was good for the bottom line by increasing revenue and profits. Although some wineries were and are adding brewing capabilities, distillery operations seem to be the most prevalent with many producing lines of whiskey, gin and vodkas. Don't be surprised if you start seeing a trend in sake production start to take hold as well. There are a few speed bumps along the way to impede the initial production of these craft spirits, but all in all, most agree if you have an operating winery it is generally easier to start your diversification portolio. Distilled spirits like wine has a gauntlet of regulation you have to traverse to get from point A to point B but it is generally the same government officials you already deal with for the winery operation so familiarity of each side of the coin should speed up the process as you diversify. Most wineries who start micro-distilleries start with the production of Vodka as it does not require aging and can get to the market faster to start generating revenue. It also has a shorter learning curve for the novice distiller to get their feet wet and move onto other products such as whiskey. Today's wines do battle in a global marketplace which means competi-

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In The Winery • November - December 2013 tion for consumer dollars is more fierce than an out of control roller derby championship. Spirits however have less global competion and are more readily marketed and purchased by regional customers, but then of course there has to be a local market to begin with. Micro distilleries like craft beers and wines are a major growing component of the burgeoning locavore movement of locally produced foods and drinks. Americans are buying more homegrown fruits and vegetables and local wines and drinks to not only show support of their local vendors but because it makes good economic sense for the community at large. Many restaurants are locavore friendly and will opt to serve dishes made from locally grown foods, and if they serve beer, wine and spirits they will be more agreeable as well to offer locally produced products from wineries who have diversified into those areas. Take a winery, place it in the beautiful Napa Valley where wine is king. Now, add a distillery and voila! You have the Charbay Distillery (www.charbay.com) and Winery that got it's start in 1983 in St. Helena, California. Miles and Susan Karakasevic are carrying on the traditions of 12 generations of European winemaking and distilling. According to Susan Karakasevic, "We are a family run winery and distillery. We strive to preserve the old world feel as we share our wines. Our family has roots in Yugoslavia and have in the business for generations. We ferment in small lots and age in French oak barrels. Charbay is a three fold experience that includes good aroma, full body with mouthfeel and then a full lingering finish." Diversification came in the 90's. "We started making flavored vodkas from whole fresh fruit – we created a niche of artisan distillers in the vodka world – a few years later we released the Clear Vodka that was our base. That was foreign to Miles because he is all about flavors – but it paid off and continues to be a front seller for us," said SK Diversification into other products also brought more attention to their wines as the added product offerings reach out to newer consumers who enjoy their distilled spirits. Revenues are also on the increase. "All of our product lines are money makers. Being able to sell directly is a key – and in California we can not sell our spirits directly to our California customers. So that’s a problem. Looks as if the Distributors are holding that line very tightly – we just heard about a proposed law to allow artisan distillers to be able to sell directly to their customer but it was not passed. The California Distributors won’t let it happen," said SK. Government regulations can be taxing to the corporate bottomline. Laws regarding sale, shipment and tasting of liquor are different from that of wine, at least in California. "It’s California..tons of laws, not conducive to business but we are artists," said Susan. Marketing of multiple lines also has it's own unique set of problems, but Charbay realizes that small distillers have a hard time getting the attention of distributors so they work with them when the can to keep channels open.

hours and pour our creativity into our business. We feel there will always be those looking for exceptional quality and the quest always drives us forward. It’s our life as well as our heritage. Our son is generation XIII and he’s as natural with flavors and distilling as his father. We make ports, aperitifs and dessert wines with the brandy we distill – it’s an art form, always exciting," Susan said. In the heart of Michigan in the Great Lakes Wine Region, Heart of the Vineyard Winery (ententespirits.com) has been distilling began in 2001 when they also began the making of hand-crafted brandies. Beer was added to their mix in 2005. It was a matter of economics, according to Nichole Birmingham-Moersch. "We decided to go this route out of necessity as we were hosting weddings at our venue at that time." Since then they found that the added product lines increased their bottom line. "We won’t be able to continue down the path otherwise, and by adding these products it has brought more attention to our wines as we reach out to new customers.Overall I would say yes it has helped greatly and what it does is to allow a group of people with differing tastes to come to one location and enjoy themselves.The wine is still our most profitable product. To produce these diverse products different production methods and equipment are needed, and at first can be costly to expand to these other areas from an equipment standpoint and training of personnel. "You are basically running separate businesses so that does add to costs" she said. And there are precautions they have to take to avoid any cross contamination of each product during the manufacturing cycle, so Heart of the Vineyard has seperate buildings for producing the varied product lines to avoid any complications. As for personnel they have some carryover but for the most part they are seperate. Differentiating these various products from a marketing standpoint to the public can be a challenge in the arena of distribution.to obtain valued shelf space, but in this winery's case it doesn't seem to matter much and the job gets done. "One doesn’t really seem to affect the others, often times we are required to have different distributors anyway as certain states don’t allow distributors to carry beer, wine and spirits," she said. One of the big questions being raised is how the quality of the wines are affected with this divrsification. According to Nicole, "Our main focus is quality throughout. If we felt that our quality was being affected then we wouldn’t proceed." It does seem to be a growing trend to some degree but is up to the individual operation to determine if it is the right course of action for them. "I don’t know how deep the trend will be, but it will certainly increase as not everyone likes just one type of product. We’ve run across very few businesses throughout the world that do all 3 lines.It’s a lot of work and money so it depends on your business model. All I can say is that it seems to have worked for us. If you choose to go this route make sure to visit as many places as possible, there is nothing like seeing it for yourself."

"Charbay is more about a way of life – we work long hard

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In The Winery • November - December 2013

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Iowa is fast becoming a leader in wine production, and the art of distilling has not escaped many of the wineries in the state. One in particular, Cedar Ridge Vineyards, (www.crwine.com) founded in 2002 by Jeff and Laurie Quint is a shining example of this new industry diversification. The winery is in a picturesque setting on a 27-acre hilltop midway between Cedar Rapids and Iowa City. There was one very strong factor that motivated the expansion into the art of distilling. "In the process of planning the winery and trying to identify ways to differentiate ourselves, we came to realize that, while Iowa is the nation's largest producer of corn, and most distilled spirits are made from corn, there wasn't a single distillery selling local spirits in Iowa. Our state was importing 100% of the $300 million of distilled spirits we consume annually. What also became apparent was that, since Prohibition, the U.S. has been dominated by just a few very large distilleries. Meanwhile, in other parts of the world, most moderately sized cities like Des Moines or Cedar Rapids might have a local distillery. So we began the process of getting federal and state approval to open a distillery as well." said Quint. In the year 2005 they sold $16,000 worth of wine and spirits. Quint has definite opinions on whether this is a growing trend or not. "I don't think this is necessarily a trend among wineries, but it is definitely a trend. Small-scale wineries have been doing really well (most California wineries aren't much bigger than the wineries here in the Midwest). Craft breweries are all the rage. Now, craft distilleries are really heating up.

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Aside from the whole "local" movement, I think the consumer is interested in trying new things and finding new favorites that aren't all mass-produced. I think you can see the big distilleries reacting to this trend by putting out tons of new products, in smaller quantities, to attempt to satisfy this appetite. One other thing I'd point out is that margins aren't as high in distilled spirits as they can be in wine. Where a relatively small winery (maybe 12,000 gallons or so) might be able to provide its owner a full-time living, a small distillery will really struggle financially. First of all, excise taxes are a huge factor. On a bottle of our Cedar Ridge Bourbon Whiskey, for instance, we have already paid over $11 in excise tax before we can put it on the shelf for sale. On a comparable bottle of wine here in Iowa, it would be less than 25 cents. So, you really have to get a lot of volume going in order to create sufficient margin to cover your overhead. On top of that, wine can be harvested and then sold within 3-12 months. In the whiskey or brandy business, you have to hold your inventory for maybe 2-5 years. Financially, a distillery simply can't be put together on a budget similar to a winery," said Quint. When you add a product line to your corporate mix, that generally means an increased and healthier bottom line, but along with that, there are additional costs added to produce the newer products but, do the economic pro's outweigh the economic con's? According to Quint it's a mixed bag. "We are probably guilty of having way too many products. Not only do new products require significant development time and expenses, but they also complicate your production and sched-

The Grapevine • November - December 2013

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In The Winery • November - December 2013 uling processes. We just really get off on developing new, interesting products and it's part of the fun of being an independently-owned micro. For one thing, our winery is committed to producing as many varietals as we feel we can impress people with. This means a lot of small bottlings for us. And we more often run out of a product because you can't always simply get more of a given varietal. Many wineries develop generic blends to eliminate this problem. Not us. For another, we want our local fans to keep coming back. In order to do that, we continue to innovate and bring in fresh new offerings. This is especially true in our kitchen, where we continuously update our menu, and in our distillery. We literally forecast out 2-3 years on what our new distilled products are going to be. We have several products we've been making for a couple years now that we have never yet released. We like to keep it interesting!" Sterilization is a key factor as well and to Cedar Ridge it is their business mantra. "For instance, when we get done running vodka in the still, we can go straight to whiskey. But when we get done running whiskey, we have to spend a day cleaning and flushing the inside of the still before we could go back to vodka, simply because vodka needs to be such a pure, clean, neutral product. Luckily, we are dealing with alcohol here and vodka, for instance, does a pretty good job of cleaning up after itself," he said.

two different worlds from a regulatory standpoint. The federal reporting requirements for distilled spirits are very intense, to say the least. We spend several man-days per month simply reporting on our spirits activity. Taxes run high on spirits, and tracking them and reporting on them is, therefore, much more complicated. Also, within our state of Iowa, we can't sell our own spirits until after we have delivered them to the state warehouse (two hours from our plant) and then purchased them back from the warehouse. And the cash flow is a nightmare because we have to pay the state immediately to get our product back (at a 50% mark-up, plus handling fees), even though it may be up to a month later before they pay us for that same product. Iowa's distilled spirits laws are a relic of the ancient past. These laws and related governance are the reason Iowa still imports the vast majority of its beverage spirits even though we make more raw materials here than any other state," Quint explained. If your winery bottom line needs a fuel injection, you may want to consider diversification by adding a distilling operation. If so, learn all you can, do the math carefully, and above all have fun. It can pay off in consumer satisfaction, increased visibility in the marketplace and will help increase your prized wines precious bottom lines.

"Government Regulations are a large factor to deal with when diversifying. According to Quint, "Wine and spirits are

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In The Winery • November - December 2013

Tassel Ridge Winery Puts Winemaking on the Iowa Map By Nan McCreary

O

ne might expect to see vineyard innovation occurring in California. Maybe even in Oregon or Washington, or the Finger Lakes of New York. But not in Iowa. After all, until recently, Iowa was tied with Oklahoma for 43rd place in U.S. wine consumption.

But all that is changing, partially because of Bob Wersen, entrepreneur and owner of Tassel Ridge Winery, located in the heartland of Iowa near Oskaloosa (60 miles southeast of Des Moines). Established a mere seven years ago, Wersen’s operation is already one of the largest vineyards in the state. As founder and president of Interpower Corporation, an electronics manufacturing firm, Wersen is naturally inclined to think big: not only does he grow11 different types of grapes on his 67-acre vineyard, he produces nearly every style of wine known in the international wine community: red and white wines, dry and sweet wines, sparkling wines, fortified wines, rosés, and even ice wines and fruit wines. While he sells directly to consumers at the winery and through the Tassel Ridge Harvest club, he also self-distributes his wine, which is available at over 400 retail outlets in the state. In his “spare” time, Wersen pursues his two passions — introducing Iowans to the art of food and wine pairings, and promoting cold-hardy Vitis riparia-based wine grape cultivars through a national agricultural consortium called the Northern Grape Project.

Bob and Sharman Wersen are the founders and owners of Tassel Ridge Winery in Leighton, Iowa.

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Under Wersen’s guidance, and that of Assistant Vineyard Manager Adam Nunnikhoven, Tassel Ridge Winery is a very busy operation, producing 15,000 cases of wine per year. Grapes include nine Northern varieties that can survive Iowa’s long winters and short ripening season: Edelweiss, La Crescent

The Grapevine Magazine • November - December 2013

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In The Winery • November - December 2013 and St. Pepin, LaCrosse, and Brianna — all whites— and Marquette, St. Croix, Frontenac and Sabrevois, all reds. In addition, the Vineyard grows two marginal grapes: Foch, a French-American hybrid white grape, and Steuben, a Vitis labrusca red grape that adds a characteristic flavor to the Tassel Ridge rosé. To supplement its plantings, and to offer more diversity, the Vineyard also buys juice from Concord and Catawba grapes in upstate New York. Like all northern wine growers, Wersen’s biggest challenge is the climate. Typically, the Iowa growing season begins with bud break in June and ends with harvest in August. Because of Iowa’s high humidity, the crew must apply fungicide to the vineyard every 7 to 10 days, varying the mix so the fungus doesn’t develop immunity to any one formula. Tassel Ridge harvests its grapes mechanically, but relies on seasonal help to bring all of the grapes in on time. In spite of the limitations dictated by climate, Wersen remains undaunted, and is continually “playing with” new grape varieties. He once tried to grow Cabernet Franc because it is the most cold-resistant of the Vitis vinifera grape but, he said, they planted the grapes in a low area that was exposed to the cold and it froze to the ground every year. Currently, Wersen is experimenting with an Osceola Muscat, which grows in Nova Scotia. “If we try something that doesn’t grow well, we aren’t sentimental about it,” he said. “We just root it up and put something else in its place.”

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Wersen, who is clearly passionate about his endeavors, developed his love for wine while living in California in the 1970s after graduating from the University of California at Berkeley. When he moved his business to Iowa 20 years ago, he and his wife, Sharman, saw an opportunity to share their love of wine, and in particular, wine pairings with food. They planted Tassel

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The Grapevine • November - December 2013

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In The Winery • November - December 2013 Ridge Winery in 2002, and released their first wines in 2006. “The U.S. average wine consumption was 2.5 gallons per capita,” Wersen remembered. “Iowa’s was 1.6 gallons per capita. Iowans didn’t consume much wine because they haven’t had the exposure.” That opportunity for exposure is quickly changing. Today, Tassel Ridge Winery has a full-time chef onboard and a commercial kitchen, and offers events ranging from wine and burger night to formal sit-down, multicourse dinners with wines with each course. “We work the seasons,” Wersen told the Grapevine Magazine. In the fall, for example, they offer a tailgate-style pairings. On the 3rd Thursday of November, they celebrate their first release of the year, Iowa Nouveau (think Beaujolais Nouveau). In December, the staff presents hors de oeuvres and wine pairings appropriate for holiday parties. But, no matter what time of year it is, there is always something happening at Tassel Ridge. “We like to get people thinking about incorporating wine into their lives," Wersen said, “whether it’s for aperitifs, special dinners, celebrations, gifts.” Wersen added that the Vineyard is now constructing a greenhouse — actually a 1,000 square foot indoor dining facility— with a wood-fired pizza oven in the corner. “For many people, pizza for tailgaiting equals beer,” Wersen laughed. “Now they say they’re tired of beer, so we’re giving them an alternative.” For the Wersens, wine education does not stop with wine tastings and cooking demonstrations. Visitors to the vineyards can tour the fully-integrated facility, with its crush pad, cold storage units, multiple tanks with a 45,000-gallon total capacity, a filtration system and a bottling line that can handle 25 bottles per minute. In addition, they can view videos that explain the history of grape growing in Iowa. “Education is clearly our focus. It’s our business model,” Wersen explained. In keeping with that model, the Winery also publishes a weekly electronic newsletter, as well as a 32-page quarterly magazine, “Simply Extraordinary,” that reaches 100,000 people. These publications are available at the Vineyard’s website, www.tasselridge.com. There is no doubt that Wersen, ever the entrepreneur, has lead Tassel Ridge to the forefront of Iowa winemaking. His wines have won over 250 medals in national and international competitions. Most recently, their Iowa Prairie Snow — a sweet iced wine made from grapes picked at the picked at the peak of perfection and frozen after harvest — won a Double Gold at the Iowa Wine Commercial Competition judged prior to the start of the 2013 Iowa State fair. Their red blend, “Red, White, and Blue,” is an international Gold Medal winner, and is number one in the state among sales of Iowa-made wines.

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As Wersen looks to the future, he told the Grapevine Magazine that “I want to develop the kind of world-beating wines from northern grapes that people will find so good that they will beat a path to our door to consume it. I want to be sure we have a good experience for them when they come, but the key is to have quality wines from northern wine grape varieties.” Today, while it is now possible to make good wines in states with continental climates, Wersen sees many opportunities ahead, as well as challenges. “We’re pioneers and we’re dealing with grape varieties that have not been around long,” he said. “We really don’t know how to get the most out of them in the vineyard and in the winery.” Wersen is an active proponent of the Northern Grape Project, a national consortium out of Cornell University that was founded to help meet the production, processing and marketing challenges of this rapidly expanding industry in more than 12 states in New England, northern New York, and the Upper Midwest. According to Wersen, Iowa is playing a major role in bringing all of this together. The State alone has over 1200 acres of

grapes and 103 wineries, plus it has the support of the Midwest Grape and Wine Institute at Iowa State University in Ames, which is dedicated to integrating viticulture, winemaking and marketing of new cold-hardy cultivars and supporting new and growing rural wineries. Tassel Ridge Winery has become a special destination for those in the heartland who want a unique wine experience. Wines made in Iowa now represent 6.5 per cent of all wine consumed in the state, and more and more people are bound to discover the joys of wine and of wine and food pairings. One thing is for sure: under the guidance of Bob Wersen and his crew, experience can only get bigger and better. Tassel Ridge Winery is open seven days a week: MondayFriday, 9 a.m. to 6 p.m.; Saturdays from 10 a.m. to 6 p.m.; and Sundays 12 p.m. to 6 p.m. For more information on the Winery and its events, visit www.tasselridge.com.

The Grapevine • November - December 2013

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ccc The 2014 Annual Te x Growers Association Confe re February 13-15, 2014 is the 38th Annual Texas Wine and Grape Growers Association Conference and Trade Show. This must-attend event will host over 450 Association members, winery leaders, grape growers, industry vendors, and consumers at the Embassy Suites Dallas-Frisco Hotel, Conference Center & Spa located at 7600 John Q. Hammons Drive in Frisco, TX. Attendees will enjoy three full days of educational seminars, one-on-one time with suppliers, and networking…lots of networking. Educational Seminars will cover a wide variety of important topics on Viticulture, Enology, Marketing, Social Media, and Compliance. The Trade Show floor plan includes a stage area for vendor presentations. The 4-Diamond Embassy Suites Dallas-Frisco Hotel, Convention Center, and Spa, located in the north Dallas suburb of Frisco, is an all-suite hotel connected to the Frisco Conference Center and adjacent to the Dr. Pepper Ballpark. Only 25 minutes from Dallas-Fort Worth International Airport (DFW), 15 miles from Dallas Love Field (DAL) and 10 miles from Addison Executive Airport, the Frisco hotel offer convenient highway access to numerous restaurants, bars, shopping venues, and sports facilities. The Frisco Embassy Suites offers spacious two-room suites featuring a separate living room with a sofa bed and private bedroom. Enjoy high-speed internet access, two flat-screen TVs, a refrigerator and microwave. Start your day with a complimentary cooked-toorder breakfast. Enjoy a bagel and coffee from Starbucks. In the evening, gather in the tropical atrium lobby for the complimentary Manager’s Reception. The hotel is centrally located next to the Stonebriar Centre Mall, The Container Store, and IKEA. The west rooms overlook Dr. Pepper Ballpark, home of the Frisco RoughRiders. TWGGA Conference Rate: $149.00 per night for single and double occupancy rooms. $159.00 per night for triple/quad accommodations. Call (972) 963-9175 or (800) 921-1443 for reservations. All reservations must be confirmed before January 12, 2014. After that date, the negotiated rate will not be honored. •

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In The Winery • November - December 2013

SCIENTIFIC SUPPORTHow Guidance Helps New, Prospective Vintners By Robert Gluck

M

any new and prospective vintners do not have the science background to analyze faults and improve their products. However, with guidance from a college extension enologist, wine quality can and does improve. Scientists help the wine industry with applied enology research and educational programs aimed at commercial winemakers and their employees. Denise Gardner has been doing just that at Penn State University. A member of the American Society of Enology and Viticulture and the American Wine Society, Gardner worked in wineries in France, spent two years working for Enartis Vinquiry in Napa, and holds a master's degree from Virginia Tech. All told, Gardner has studied grape growing and winemaking for 12 years.

more operations, and gets more industry people together to visit the operations of other vintners, all the while enhancing discussions around winemaking problems. Because of her work, the industry reaps benefits in the form of recommended improvements. Simply, Gardner’s support keeps winemakers apprised of the latest science regarding wine production methods, winery economics, and business practices. Recently, Gardner traveled to Galer Estate Winery in southeast Pennsylvania near Philadelphia and focused on red wine quality. She also traveled to wineries in the northeast and did reviews of production facilities and wine tasting. “If they have a problem wine, they ask me to taste it with them, and talk it through, and let them know what they should do,” Gardner said. “In this region of the world our biggest problem is oxidation. There are also a fair number of volatile acidity problems out there. These two problems are related to sulfur dioxide (SO2) and oxygen management. “ Gardner finds the best way possible to remediate a problem. “My main goal is to give them more confidence and education for when things go wrong. I make the winemaker aware of their most common problem. If that awareness happens, they have the ability to fix the situation and improve their wine quality, which is the overall goal. They want to have a better product to sell to consumers, represent their brand and represent the state. We see this happening.” Some winemakers are very daunted by the challenges, but there is always something they can do to improve their wines.

Denise Gardner - Penn State University A busy woman, Gardner’s workload includes research as well as organizing educational seminars and traveling for on-site evaluations of winemaking operations. “I’m focused on the industry side and I do it in two different ways. First, I hold large education workshops and seminars that teach people things about wine quality they can take back and immediately utilize in their wineries. Second, I do onsite evaluations including regional visits," Gardner told The Grapevine. By doing regional visits, Gardner reaches more people, sees

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According to Gardner, more frequently than not, oxidation, in addition to oxygen exposure, is caused by poor sulfur dioxide management. “Because winemakers don’t like to use a lot of SO2 there’s a lot of negative connotation around it,” she noted. “I was at a winery once and they were trying to monitor it with an analytical method. However, their analytical method was not very accurate. Therefore, they were having some of these problems associated with not enough SO2 in the wine. We made some updates to their wine labs. I sent them a protocol on how to measure SO2 and why it is important. They updated their wine labs and started measuring all their wines. A year later, I heard back from the winemaker. He said it was the best investment they ever made.” Gardner works closely with the Pennsylvania Winery

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In The Winery • November - December 2013

Association (PWA). PWA is a non-profit trade association that acts as advocates for the wine industry in Pennsylvania. According to Jennifer Eckinger, executive director of PWA, the association contributes funds to programs that help its members gain further understanding and assistance. “Denise’s workshops help the wineries identify issues they can mitigate to improve their systems and also identify quality standards,” Eckinger said. “We have 117 wineries in our association. When someone tells us they want to open a winery, we always connect them to Denise so they have a grounding, a point of reference and a group to be able to ask questions, as well as to sign up for the programs and seminars so they can get involved and network within the industry.” Eckinger said Pennsylvania's moderate climate and rolling terrain provides some of the best growing conditions on the East Coast. Here, more than 100 wineries produce a delightful array of wine varietals including Cabernet Sauvignon, Catawba, Cayuga, Chambourcin, Chardonnay, Gewurztraminer, Pinot Gris, Pinot Noir, Reisling, Seyval Blanc, Vidal Blanc and Vignoles. “We have different growing conditions that help to make our wines unique,” she added. “We promote Pennsylvania wines as unique and our wineries are unique. It’s a non-intimidating place to learn about wines.”

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Penn State is involved in research, Gardner said, including work on pest and canopy management and soil studies. “On the viticulture side we are working on frost protection, different treatments to minimize botrytis, including different leaf removal techniques to remove leaves from the canopy and the use giberillic acid. We are looking at different biometric tools to manage grape berry moths. We also have a graduate student working with Dr. Ryan Elias on ways to inhibit wine oxidation. Another big project I’m a part of is the USDA NE 1020 Wine Grape Variety Trials,” Gardner said. Gardner held a well-attended seminar in July on how to manage SO2 in the winery. Coming up in January in State College is a two day training and education workshop on how to identify wine defects. “We are advancing,” Gardner concluded. “Winemaking is a continuing education process. I truly believe that. There is never a moment where you stop learning. Now we have so many tools to get information out to winemakers that they are able to get the information more quickly and apply it to their operations. “ Vintners can learn more about such topics as “Starting a Winery”, “Producing a Wine with Sub-Optimal Fruit”, and “A Review of Filtration for Wineries” by clicking this link: http://extension.psu.edu/food/enology/wine-production To contact Denise Gardner and other educators at Penn State click here: http://extension.psu.edu//food/enology/directory

The Grapevine • November - December 2013

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In The Winery • November - December 2013

Reducing Current Tax Liabilities A

By Jeffrey L. Shilling, CCSP, Tax Director – Moss Adams LLP

s the economy gradually improves and business expansion is once again on the table, winery owners are increasingly employing a tax deferral strategy that's long been in use by business operators in other industries.

This proven approach allows wineries of all sizes to reduce their current tax liability, which results in improved cash flow. The strategy, known as cost segregation, reduces current income tax liability by shifting costs from long lived assets to assets with shorter lives, thereby increasing depreciation and reducing taxable income. A cost segregation study identifies and separates a winery’s real and personal property assets—also referred to as buildings and equipment—into proper asset classifications. Not only does the process result in shorter lives, but depreciation gets an extra boost due to the accelerated depreciation methods available for short-lived assets. The result can be significant cash-flow benefits for wineries constructing new facilities, like fermentation halls and/or tasting rooms, as well as for taxpayers acquiring their first winery or new facility.

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Who Should Consider Cost Segregation? It’s clear that many businesses fail to capitalize on these opportunities and are required to pay federal and state income taxes earlier than needed. Cost segregation can considerably shorten the tax lives of assets related to a winery expansion; in many cases, the standard 39-year depreciation period can be shortened to five-, seven-, or 15-year periods. The most likely owners to benefit from a cost segregation study are taxpayers with buildings or real estate valued at over $1 million or taxpayers that have completed building or land improvements (for the purpose of adding to or expanding their operations) costing over $300,000. They should be planning to hold their property for more than five years and be able to utilize accelerated depreciation. For many winery owners, depending on their tax situations, this accelerated depreciation can be used to reduce taxable income from other sources. The benefits of a cost segregation study can be seen in the example of a boutique winery.

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In The Winery • November - December 2013 This winery recently constructed a $5 million winery and tasting room. Original estimates pegged the first five years’ depreciation deductions at $582,000. By commissioning a cost segregation study from professionals with significant experience in the wine industry, the deductions were more than tripled. By re-categorizing portions of the winery’s construction costs into shorter depreciable lives, the study helped increase the winery's current and next four years’ deductions by $1,355,000; potentially deferring federal income tax of $562,000. Cost segregation studies can also assist wineries in determining classifications for initial property tax filings, further reducing a winery’s tax burden through properly allocating between real and personal property.

Bring Home the Money From boutique wineries like the one mentioned above to large international operations, cost segregation is helping owners discover that accelerated depreciation deductions on new construction—fermentation halls, crush pads, barrel storage, tasting rooms, and even whole new wineries—can help infuse needed cash into the business.

A Few Things to Consider: • A cost segregation study may be conducted for new construction, remodels, expansions, or even leasehold improvements funded by a tenant or landlord. • A study can be performed for any of the above without amending current tax returns—even if the project occurred years ago. • Similar features at different wineries may be eligible for different depreciation treatments depending on its use. For example, a wine cave may serve as a production warehouse at one winery and a tasting room at another. When fully understood, and applied, cost segregation studies help wineries reinvest current tax savings into their business or pay down debt by pushing tax liabilities out to the future when an expansion project is more likely providing increased revenue. Wineries are capital intensive and require significant investments to grow and improve their competitive position. For years only the largest players in the industry were familiar with tax deferral options available for improvements and expansions. Today, more and more wineries understand how to apply the rules, new and old, to improve their bottom lines. Jeffrey L. Shilling’s 20-plus years of experience includes hundreds of cost segregation, allocation of purchase price, and deprecation studies across a wide variety of industries (wineries are just his favorite).

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The Grapevine • November - December 2013

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In The Winery • November - December 2013

Most Advanced Sustainable Wastewater Treatment System for Food & Beverage Industry Now Commercially Available

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ddressing the serious wastewater treatment issues in the food and beverage industry, Cambrian Innovation Inc., a leader in bioelectric environmental solutions for industrial, agricultural, and government organizations, announced the commercial availability of EcoVolt™. The first and only industrial-scale bioelectrically enhanced system ever created, EcoVolt empowers food and beverage companies, including wineries, breweries, and dairy operations, to cut operating costs and monetize their process and wastewater streams while significantly increasing plant sustainability.

Cambrian Innovation launches EcoVolt, the first and only industrial-scale bioelectrically enhanced wastewater treatment system for sustainable water management Traditional wastewater treatment processes are energy-intensive and susceptible to disruptions. EcoVolt leverages electrically active microbes to stabilize the wastewater treatment process while generating clean energy. This energy can save

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money, decrease grid reliance, and form a core part of a sustainable water management and re-use plan. “EcoVolt has the potential to revolutionize how wineries and breweries manage water,” said Matthew Silver, CEO of Cambrian Innovation. “Today, most companies looking to expand production must quickly think through access to water and treatment of wastewater, and current solutions leave much wanting. The Cambrian EcoVolt system is designed to turn water management from a hassle into an opportunity. We expect many customers will be able to significantly cut electricity usage and even go ‘off grid’ when using EcoVolt to treat wastewater and generate power.”

Robust Operation, Remote Monitoring, and Simple Capacity Expansion Developed with assistance from the National Science Foundation, EcoVolt’s bioelectric innovation uses electrogenic organisms to generate clean energy from wastewater. These recently-discovered electricity-generating organisms convert wastewater pollutants into electricity. This electricity is funneled to a circuit, and back into an electrode, where a different set of micro-organisms convert electricity and carbon dioxide into

The Grapevine • November - December 2013

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In The Winery • November - December 2013

methane fuel – forming a complete treatment process. The methane can be used on-site for clean power and heat production. EcoVolt is a robust, end-to-end, anaerobic wastewater treatment solution that can operate across a range of biological oxygen demand (BOD) loadings and wastewater volumes. Its modular design and bioelectric capability allow for rapid commissioning and continuous, remote monitoring and control. These attributes minimize installation and operation hassles. Because EcoVolt is prefabricated and provides for turnkey installation, the system can easily accommodate facility expansion, as well as new system installations. Historically, anaerobic wastewater treatment systems have not responded well to changing BOD loadings and wastewater flows. Accordingly, many food and beverage companies pretreat wastewater using costly, on-site aeration. EcoVolt’s bioelectric capabilities enable it to accommodate fluctuations common in beer, wine, and other food and beverage production cycles. “Industrial food and beverage producers typically use large amounts of electrical energy to treat their wastewater. Ironically, the wastewater itself contains energy,” continued Silver. “EcoVolt uses naturally occurring organisms with unique properties to extract this energy, which can offset overall operation costs. We view this as the future of water management, globally.”

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Compared to using traditional aeration technologies, a winery or brewery can save from $100,000 to more than $1 million a year using EcoVolt, which eliminates aeration energy requirements and sludge hauling, minimizes sewer fees, and generates clean heat and power. An average EcoVolt system can also cut a facility’s carbon footprint substantially, facilitating its certification as a green producer.

EcoVolt’s Demonstrated Success Well-known for its focus on sustainability, Clos du Bois Winery, located in California’s Wine Country, field tested Cambrian’s new wastewater treatment system at an industrial scale. For the last 15 months, EcoVolt treated up to 10 percent of Clos du Bois’ total wastewater flow. The EcoVolt system treated 80 to 90 percent of the wastewater’s BOD while simultaneously generating high-quality methane fuel. The winery experienced a reduction in aeration pump electricity costs and a surplus of reusable energy. EcoVolt is available immediately and is competitively priced according to a site’s specific wastewater needs. More information on commissioning an EcoVolt wastewater treatment system may be found at www.cambrianinnovation.com/solutions/ecovolt. To contact Cambrian regarding EcoVolt, please email: EcoVolt@cambrianinnovation.com

The Grapevine • November - December 2013

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In The Winery • November - December 2013

Laetitia Vineyard & Winery Turns 30 A Pearl Anniversary for the Pearl of Central Coast Wine Country

T

hirty years after its first vintage of Old Worldstyle sparkling wine, Laetitia Vineyard & Winery is popping open a bottle of bubbly and celebrating with friends.

Sparkling Winemaker Dave Hickey has been on the team almost since the beginning, albeit in roles as varied as cleanup crewman and cellar hand. And his son, Eric Hickey, who started out observing winery operations as a kid on the fringe, is now President and Head Winemaker of the venerated brand. “When I started here, the winery was empty,” said Dave Hickey. “The tasting room was built but had never been used.” The inception of Laetitia Vineyard & Winery is woven into the history of Central Coast winemaking, though sparkling wine was something of an anomaly for the area at the time. In

the early 1980s, French viticulturists came to California to seek out a New World outpost for growing vines and producing wines similar to those of their homeland in Champagne’s Epernay region. Their search ended just south of Arroyo Grande, nestled among the foothills that stretch parallel to Highway 101. The property soon boasted several acres of Chardonnay, Pinot Noir and Pinot Blanc, as well as a production facility equipped with two traditional French Coquard presses – still, the only two in North America. As Maison Deutz Winery (the original name for what is now Laetitia) a culture of respect for Old World methods was established with the Coquard presses and méthode champenoise, a traditional, labor-intensive and time-consuming approach to making sparkling wine. And even after the property changed hands and the name became Laetitia Vineyard & Winery several years later, that culture remains.

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The Grapevine • November - December 2013

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“When it comes to sparkling wines, the only difference between Old World wine and Laetitia sparkling wine is the use of New World grapes,” said Dave Hickey. “I was trained by French winemakers who were, themselves, trained in Champagne. They wanted it done exactly the same way here as it was there. And to this day, one of the highest compliments anyone can pay me is to say that my wine reminds them of Champagne.” Today, Laetitia’s estate vineyards have expanded to include over 600 acres and more than a dozen varieties, in addition to the 1,100-acre Santa Barbara Highlands Vineyard in eastern Santa Barbara County which sources all fruit for the brand’s sought-after NADIA label. Between Laetitia and NADIA, nearly 1,000 tons of grapes were harvested in 2012 and 160,000 gallons of wine produced.

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Both properties are sustainably farmed under the purview of Vice President Vineyard Operations, Lino Bozzano. “With a large addition of new Pinot acres just before I started here eight years ago, there was a lot of unknown,” said Bozzano. “Today, these vineyards show several different expressions of Pinot Noir. Being here to watch these terroirs develop has given me a great personal connection with the property.” But no matter how the Laetitia Vineyard & Winery domain grows, its backbone will always be pure, complex and utterly festive sparkling wine. To celebrate the brand’s 30th year, Laetitia will offer a limited edition etched magnum series for purchase. Additionally, the winery will host an intimate and formal Dual Winemaker Dinner on Saturday, September 14 at 5 PM. Winemakers Dave Hickey and Eric Hickey will pour their coveted library wines from over the course of their time with the winery, accompanied by dishes from the culinary genius of Chef José Dahan of Et Voilá Restaurant. Tickets are $145 per person, $125 for Laetitia Wine Club members. For more information on the 30th anniversary etched magnum or to make a reservation for the dinner, please call 805.474.7641.

About Laetitia Vineyard & Winery Since 1982, the Laetitia Vineyard & Winery has produced elegant wines that champion the exceptional character and diversity of the Arroyo Grande Valley AVA. Originally founded by an established French Champagne house, the Laetitia estate carries on in the longstanding traditions of Burgundy and Champagne with a focus on small-lot Pinot Noir and sparkling wines. Valuing legacy, balance, innovation, and sustainable practices from harvest to glass, the Laetitia team works meticulously from vintage to vintage to ensure that every bottle of Laetitia wine is as expressive as the land from which it originates. For more information about Laetitia Vineyard & Winery please call 805-481-1772 or 1-888-809-VINE Visit our website: www.LaetitiaWine.com

Laetitia Vineyard & Winery 453 Laetitia Vineyard Drive Arroyo Grande, CA 93420

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The Grapevine Magazine • November - December 2013

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Around The Vineyard • November - December 2013

Vineyard Equipment in Today’s Changing World A by Nan McCreary

s wine begins its journey from the grape to the glass, an important consideration is the equipment necessary to produce and harvest a profitable yield. And in today’s competitive marketplace, vineyard equipment is constantly evolving to meet the needs of vineyards striving to improve productivity, efficiency and quality.

In talking with vineyard experts and equipment dealers and manufacturers throughout the country, the Grapevine Magazine identified significant technologies that are changing the face of today’s vineyards: specialized and multi-function tractors, optical grape sorters, mechanized implements such as deleafers and pruners, and more efficient and environmentallyfriendly sprayers. Tractors have, and always will be, the mainstay of the vineyard. In today’s vineyards, narrow rows are becoming the norm, from 12 feet in the 1980’s to 6 feet or less today, and

tractor manufacturers have responded accordingly. One company, Branson Tractors, headquartered in Rome, Georgia, met this demand with technology to convert a standard agricultural tractor to a narrow-width vineyard tractor. “Basically, we took a standard tractor and designed a kit to narrow the wheel base so the tractor could operate a vineyard, ” said Jim Steele, vice president of Branson. The technology is applicable to any one of our 20 series tractors with 31 to 55 horsepower. Oregon Vineyard Supply (OVS), a one-stop shop for hundreds of Willamette Valley vineyards located in McMinnville, OR, offers its customers an 85-horsepower Kubota tractor that, at four-feet wide, is specifically designed to fit in tight spaces. “Many vineyards in this area plant with six-foot rows, so there is a big demand for these tractors,” said OVS’ Brian Crawford. “While purchasing a specialty tractor is an added expense to the vineyard,” he added “it can be cost-effective, because

Pellenc’s Selectiv’ Process On Board technology is generating more and more interest among winery operators and owners. The Selectiv’ Process system, an option on Pellenc multifunction and tow-behind grape harvesters, comprises a high-frequency, in-line destemmer and an onboard sorting table which successfully removes petioles and other matter from the harvest.

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The Grapevine • November - December 2013

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Around The Vineyard • November - December 2013

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Call for a Dealer Near You... 800-351-8101 Visit Our Website... www.proaginc.com Progressive Ag Inc. • 1336 McWilliams Way • Modesto, CA 95351 yields can be increased to economically viable levels.” According to Crawford, most of the vineyards in the Willamette Valley hand-pick their grapes, so the specialty tractor is an economical alternative to the pricier over-the-row tractor/harvesters. “But,” he added, “as labor becomes harder to find and more expensive, we may see more mechanical harvesting, so all that could change.” The gold standard in tractors is the multi-function over-therow tractor that can harvest, spray, prune and mow. This piece of equipment offers vineyards the advantage of using one piece of equipment year-round by simply changing out the tools, depending on the application. Over-the-row tractors also allow vineyards to farm more efficiently and cost-effectively because they can cover multiple rows per pass. Pellenc, the world-leading manufacturer of mechanized equipment for the vineyards and orchards, has taken the multifunction tractor to a whole new level with a Pellenc Selectiv’ Process Onboard destemmer/berry sorter. The equipment can operate in minimum row spacing of five feet, and remove 90 percent of the waste from the grape. “When we introduced this product in 2008, it became so popular that we developed a stand-alone unit for the wineries who hand-pick their grapes,” said Lance Vandehoef of Pellenc America, Inc. “This innovation increases quality and provides a whole new segment of cost savings for both parties.” Pellenc has recently added Pellenc Vision — a mobile optical

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sorter — to its line of Selectiv Process technology. Pellenc Vision, which sorts berries by color and shape, can be used in the vineyard or at the winery. . “You just get single berries,” said Vandehoef. According to Vanderhoef, wine trials have demonstrated that grapes harvested and sorted with Pellenc’s Selectiv Processes produce wines that are far better than wines picked and sorted by traditional methods. “Selectiv Process is taking wine industry by storm,” Vandehoef told The Grapevine Magazine. “The technology is sound, simple, and reliable. It’s been a huge hit.” Vineyard mechanization, on some level, is becoming more commonplace in vineyards as growers continue to face higher labor costs and increased labor shortages. Mechanical deleafers, for example, are gaining momentum for removing leaves around the fruit zone to improve ventilation in the vineyard. Deleafers can be mounted on tractors or on harvesters. Mechanical pruners, too, are growing in popularity. These may either be pulled behind or mounted on a tractor. “Oxbo Mechanical pruners have been around for about eight years,” said Chris Peterson of Midwest Grower Supply in Stanberry, MO. “They continue to improve, but it’s still a fairly new technology.” Peterson is a representative of equipment manufactured by Oxbo, a leader in vineyard mechanization equipment. Oxbo, as well as other companies, offers a full range of mechanical products that can be fully customized to meet current and future levels of mechanization, including harvesters, pruners,

The Grapevine • November - December 2013

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Around The Vineyard • November - December 2013 VSP (vertical shoot positioning) and rotary shoot thinners, cordon brushes and fruit thinners. Oxbo also manufacturers the Oxbo 4420, a multi-function power unit for year-round vineyard.

tiveness of the spray technology also means decreased applications and decreased fuel use. By reducing materials, water and labor costs, On Target Spray Systems helps companys “save green while staying green.”

Another area of innovation that has been a boon to farmers is the advancement of sprayer technology. Spraying for fungicides has always been a challenge for growers, as they strive to improve application efficiency without the waste and the environmental impact associated with drift. One company, Progressive Ag Inc. of Modesto, CA, has addressed this with the LectroBlast®, a low-volume electrostatic sprayer that increases under-leaf coverage and reduces drift. Here’s how it works: High velocity air, moving at speeds over 200 mph, passes by unique air-shear nozzles where chemical-laden liquid is pulled into the air stream. Small, fine droplets, approximately 50 micron in size, are created and take on a charge as they pass by patented electrostatic electrodes. As the charged cloud comes near the plant, it has a magnet-like effect. The result is more chemical laden droplets deposited on the plant surface, especially in the under-leaf and hard to reach areas. The LectroBlast® also has high-volume capabilities: the equipment can do up to 500 gallons per acre, if necessary. Also, LectroBlast® Electrostatic Sprayers are concentrate sprayers that can spray with less than 40 gallons of water per acre.

Electrostatic technology is not new, but it is improving significantly. Mark Rykman of Progressive Ag said the company now has a wraparound model that can spray two or three rows

Another company, On-Target Spray Systems, utilizes the same technology to make sprayers that are environmentally sound, socially equitable and economically viable. The effec-

On-Target Spray System at a time.The LectroBlast® model sprays out from the center and in from the outside to hit the fruit zone, plus it has a the third head that sprays down from the top. This makes the spraying more uniform, and keeps the material confined to the grapevine. As more and more vineyards opt for electrostatic sprayers, the technology continues to develop. Rykman told The

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Around The Vineyard • November - December 2013 Grapevine Magazine that companies are working with growers to develop a GPS mapping system to plot areas in the vineyard that may be weak or exposed to disease. An onboard computer would identify these areas, so the operator can control the amount of material that’s applied. “This system is being used for corn and soy beans, and we’ll be seeing in the vineyard soon,” said Rykman. Oregon Vineyard Supply (OVS) offers its customers another advanced alternative to spraying: the low-volume Gearmore Venturi Air Sprayer. Traditionally, sprayers used a system called “high Volume” or “dilute” spraying, where liquid is forced under high pressure through a small diameter nozzle to atomize the spray. The Venturi Air Sprayer uses a Venturi tube to atomize the spray liquid, which reduces the liquid to diameters of approximately 50 microns, i.e. fog size. Unlike “highvolume” sprayers, the particles do not run together or drip off the plants. Less water is used because the air is carrying the spray particles to cover the plant with the homogeneous foglike spray. OVS’ Brian Crawford said, “This sprayer is new in the last few years. It can cover two full rows with one pass and is extremely efficient.” Yet another area of development in the vineyard is the use of flame technology rather than chemicals to control weeds. In this application, propane is heated to 2000 degrees, which causes the cell structure of the plant to collapse. The technology has been around since 1938, but is improving, and gaining in popularity among environmentally-conscious vineyards because it totally eliminates particulates in the air. According to Steve Koch of Flame Engineering in La Crosse, KS., some studies have shown that drift from herbicides can travel as far as 11 miles. Flame Engineering produces hand-held torches, including as well trailer-type machines that can be pulled by a tractor or an ATV. When it comes to farming, technology is the way of the future. The vineyards in the next decade will look very different from the ones today. Experts tell The Grapevine Magazine that we can expect to see improvements in mechanization, as well as more computer-based applications. Already some vineyard operators are using wireless sensors to control irrigation, and others are experimenting with digital monitoring of grape vigor. Stay tuned: more changes are on the way

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The Grapevine • November - December 2013

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Around The Vineyard • November - December 2013

California

Certification Program:

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Update on Grapevine Red Blotch Virus & Laboratory Disease Testing By Judit Monis, Ph.D.

n order to obtain healthy vineyards, pathogen-free material should be planted. Countries around the world and many states within the United States have developed certification programs that establish a foundation of disease-tested grapevines for distribution to nurseries and growers.

issue was one of the topics of the International Workshop for Grapevine Trunk Diseases held in Valencia, Spain in June 2012. This author plans to attend the next meeting to be in Australia in November 2014 and update our readers with new information.

Most certification programs are voluntary and open to participants who fulfill and follow all required rules. Nurseries further propagate the material from the certification program to create increase blocks and to produce grafted vines and rootstock to distribute to growers. Although there is information on the detrimental effect of fungal pathogens as they relate to nursery propagation, most certification programs limit their disease testing efforts to viruses. Due to its importance, this

To keep certification programs current, the foundation mother plants and vines from nursery increase blocks need to be retested routinely as new detection methods are developed. The California Department of Food and Agriculture (CDFA) Registration and Certification (R&C) Program was revised in 2010. The new rules are associated with plant material that has been subjected to rigorous testing using the Protocol 2010 The regulations require the traceability of the propagation

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The Grapevine • November - December 2013

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Around The Vineyard • November - December 2013 cific distance of increase blocks from non-registered vineyards. Finally, the planting site cannot include land on which non-registered grapevines have been grown in the past 10 years.

material to the original foundation blocks. For the first time in the history of certification, vines will be certified to be free of disease but also free of known disease causing viruses. For this purpose, field and laboratory tests will be applied to the vines in the program to certify that (at least the mother vines) are free of a list of pathogens. Additionally, the planting location must be approved by CDFA prior to planting, require spe-

Page 44

A comprehensive list of pathogens (mostly viruses) will be prescribed for Protocol 2010 mother and propagative plant material. The rules allow flexibility and the list can be updated as new viruses are discovered. For example, the Grapevine red blotch associated virus (GRBaV) was recently added. Vines found to be infected with a pathogen in the list will be disqualified from the program. To help increase the amount of certified planting material available, the 2010 regulations will allow for secondary increase blocks- a block managed under the same conditions required by the CDFA R&C Program planted in a commercial vineyard. The propagative material used for the establishment of secondary increase blocks could originate from foundation or primary increase block cuttings and must be registered with CDFA. The same planting site requirements must be met for the establishment of a primary or secondary increase blocks.

The Grapevine • November - December 2013

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Around The Vineyard • November - December 2013 A program funded by the United States Department of Agriculture, The National Clean Plant Network (NCPN), made the testing and production of grapevine and other fruit crop clean stock possible. The most important product was the planting of the Russell Ranch foundation block at University of California Davis Foundation Plant Services (FPS) using the guidelines of the new regulations. It is expected that nurseries will be able to supply virustested progeny material to growers in 2015. Under the 2010 regulations, plantings from the old R&C program (derived from the Classic or older mother blocks) will not be phased out. Consequently it will be prudent to obtain history information about age, disease testing, origin of material (primary, secondary, or outdated regulation increase blocks) to ascertain the potential quality and disease status of grapevine planting material, It would be expected that healthier plantings will derive from new the foundation and increase blocks derived from the newer foundation block. Similarly, since the plantings generated from foundation stock covered by the Protocol 2010 will be subjected to more sophisticated tests, plantings from the younger generation blocks will have the lowest probability of infection. Because viruses and other

pathogens can spread from adjacent vineyards, it is important to work with a plant pathologist to inspect the increase blocks and adjacent vineyards for insect vectors and/or suspicious symptoms and collect samples for testing at a laboratory. The UC Davis Foundation Plant Services has done a tremendous job testing both the Classic and Russell Ranch foundation blocks for the presence of Grapevine red blotch associated virus. The testing determined that the Russell Ranch block is free of the virus, while the researchers found eight clones in the Classic foundation to be infected. To assure the highest quality, planting material from certified sources, should always be tested (i.e., do not assume that certified planting material is disease free). Healthier vineyards will be the result of only planting vines from reputable certification programs complemented by nursery internal quality assurance programs that include routine disease testing programs.

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Around The Vineyard • November - December 2013

Rhino Tool Company Donates GasPowered Post Driver to “Flag Man”

K

EWANEE — Larry "The Flag Man" Eckhardt's life just got a little easier thanks to a product engineered and manufactured in Kewanee.

Rhino Tool Company, 620 Andrews Ave., noticed the tireless volunteer who has lined streets with American flags at homecomings and funerals for American soldiers since 2006. Larry was using a homemade slide hammer to drive a threequarter-inch steel rod manually to install flag posts. Eckhardt, of Little York, IL, started his mission to make sure no soldier is forgotten with 150 flags. He can now provide up to 3,000 flags to line streets from the airport to the church, or the church to the cemetery, or both. Bob Tellier, marketing manager, explained the GPD-30 is a powerful, lightweight post driver that operates on regular gas. It's the perfect tool for t-posts, ground rod, form pins, grape stakes, and fence posts up to 1-7/8-inches in diameter. "It should help make flag installation much quicker and easier at the events Larry serves," said Tellier. Installing the flags takes

Page 46

Friday, September 20th, Rhino Tool presented Eckhardt with a GPD-30 gas-powered post driver.

The Grapevine • November - December 2013

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Around The Vineyard • November - December 2013

Defy the law of gravity with the power of attraction

On Target sprayers use an electrical charge to On Target Spray Systems create a fine mist of uniform, electrostatic droplets, Learn more at www.ontargetspray.com which are attracted to the surfaces of the crop like • How it works a magnet. The result? Complete and uniform coverage, highly potent drops and up to 85% less water usage. time and Eckhardt relies local veterans groups, Boy Scouts, and ordinary volunteers to pound a hole into the ground to make a hole for the aluminum tube in which each flag is mounted. "Rhino Tool Company is proud that our product will be used to install displays to honor military and public servants," Tellier said. Established in 1975, Rhino Tool Company is a manufacturer of top quality post drivers and post pullers." Our product line includes several models of air operated post drivers, gas powered post drivers, manual and hydraulic post pullers," Tellier said. Rhino’s post driver product line consists of eight air operated models covering the application range from medium-duty to heavy-duty, and two gas powered light-to medium-duty models. Rhino’s Post Puller product line consists of three models of manual post pullers and one hydraulic. Rhino serves many industries which include fence installation, sign installation, agriculture, vineyards, marine construction, construction, landscape construction, and more. Located in Kewanee, IL, Rhino Tool Company is served by a sales network of distributors and dealers across the United States, Canada, and around the world.

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This is not the first time Kewanee citizens have provided support for Eckhardt's efforts. In 2009, he was surprised with a 12-foot, enclosed trailer donated by the community at the homecoming for Kewanee National Guardsmen from Afghanistan. At that point, Eckhardt was up to about 530 flag poles which he carried in the back of his pickup. Since then, Fairfiled, Illinois community has presented him with a van. For Eckhardt, a humble man who seldom attends the funerals where he installs the flags, placed 1,000 flags along the route President Obama took when entering Atkinson, Ill., for a speech on the economy at Wyffels Hybrids in 2011. Obama sent Eckhardt an autographed photo and a thank you for what he does for American soldiers, veterans and their families. But Larry states, “While planting flags for the President was truly a great honor, the highest honor we feel is when we are allowed to pay tribute to one our country’s heroes.”

The Grapevine Magazine salutes all of our Veterans for their service, and Rhino Tool Company for their Generosity.

God Bless & Thank You!

The Grapevine • November - December 2013

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Around The Vineyard • November - December 2013

FARM FOR SALE BY TENDER The owner of Part of Lot 8, Concession 4, West Communication Road Geographic Township of Harwich, designated as Part 1, 24R3940 and Part 1 24R3278, subject to an easement in gross until July 26, 2051 as in CK63666, Chatham-Kent, municipally known as 19277 Gore Road, Blenheim, Ontario, containing 63 acres more or less. The property has beans and grapes planted at present, to be harvested in the fall. The property is suitable for cash crop farming and grape production for the wine industry. There is an easement to Erieau Wind Inc. respecting a wind turbine which is producing power and revenue. This easement goes with title and revenue generated will be assigned to the ultimate buyer. The land is tiled and a tile map is available. Inspection of the property can be arranged with the seller if requested. Grape production equipment and storage tanks are not included in the sale of land and will be sold separately to the buyer of the land or any other interested buyer. The vendor is to be afforded a two month period after closing to store and remove equipment at a rent of $1.00 per month. The transaction will close on February 21, 2014. All tenders must be in writing in a sealed envelope accompanied by a certified cheque in the amount of Five Thousand Dollars ($5,000.00) payable to “Mark Michael MacKew Professional Corporation in trust”. Price offered must be for cash and not subject to financing. Highest or any tender will not necessarily be accepted. Tenders will close at 4:00 p.m. December 20, 2013 and must be delivered to the undersigned law firm prior to the closing time and date. All bidders are required to present their bids on the form provided by the seller’s solicitor, available at the address below. Unsuccessful tenders will be notified in writing and their deposit will be returned to them by mail. Mark Michael MacKew Professional Corporation, Barristers and Solicitors, 4 Talbot Street West, P.O. Box 760, Blenheim, Ontario N0P 1A0, telephone (519) 676-3266. For more information please go to www.farmforsalechathamkent.com

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The Grapevine • November - December 2013

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International News • November - December 2013

Bill C-311: One Year Later Setting Free Canada’s Grapes…Or Not By April Ingram

Free My Grapes tractor convoy in Penticton, BC to raise awarenus. Photo courtesy of Perseus Winery

P

rohibition’ conjures up images of bootlegging operations run by gangsters under the cover of night. But how things have changed…or have they? Until just last year, it was illegal for anyone in Canada to carry a bottle of wine across provincial boundaries. If travelers from another region were to visit a vineyard in British Columbia (BC), Ontario or Nova Scotia, it was illegal for them to bring a bottle back with them or even request the winery to ship bottles to their home province. Without the existence of border patrols between provinces the law was impossible to enforce, at least for personal purchases, but still loomed heavy on wine producers. In June 2012, the Canadian House of Commons unanimously voted in favor of Bill C-311, a private member’s bill presented to the house by Dan Albas, Member of Parliament for the region of the Okanagan-Coquihalla, a vineyard rich

Page 50

part of the country. The intent of C-311 was to amend the 1928 Importation of Intoxicating Liquors Act, free the grapes and correct the ridiculousness of the post-Prohibition laws surrounding the sale of wine in Canada by removing the federal restrictions prohibiting individuals from moving wine for personal use across provincial borders. Over a year has gone by since C-311 has passed and what exactly has changed? Did it spark a flurry of online ordering and increase wine tourism now that wine for personal consumption could flow freely across provincial borders? Most Canadians still can’t buy wine directly from an out-ofprovince winery; unless they haul it back themselves. So far, only two of ten provinces, British Columbia and Manitoba, have so far authorized interprovincial Internet and phone sales

The Grapevine • November - December 2013

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International News • November - December 2013 to individuals since the law was passed. Although the bill was passed without any opposition at the federal level, the amendment did not impact the individual provinces’ right to regulate the possession, movement and sale of wine. The Canada Revenue Agency confirms on their website that, “supporting provincial legislative or regulatory changes are also required to permit individuals to move wine interprovincially or to place orders with wineries by telephone or over the Internet.” An example to consider, last month a pinot noir from Mission Hill Winery in BC won the title of “Best in the World” at its price point, and yet the vast majority of Canadians still cannot order a bottle from the winery to enjoy. Similarly, imagine if a wine list in a Paris restaurant had no wines on it from Burgundy and Bordeaux because the shipment of wines across regional borders was considered illegal. The largest provinces that appear to have the greatest resistance to listing the internal trade barriers are most notably, Ontario, Alberta and Quebec. The obstacles seem to be focused on apparent threat to the potential revenue loss to their individual liquor distribution systems if consumers can go online or join a wine club and get wine shipped to them, circumventing provincial marketing and taxation systems. There are some politicians at the provincial level that oppose this free flowing of wine because they believe that they might lose some revenue from lost mark-ups and taxes if consumers buy direct from another province; and retailers might lose a few sales. Wineries are certainly not trying to evade paying provincial taxes by selling direct to consumers and in fact, Canadian wineries pay over $879 million in federal, provincial and local taxes. This position is denied by The Liquor Control Board of Ontario (LCBO), as they state that changes to the provincial legislation are simply unnecessary because consumers in their province have access to their private ordering programs which can facilitate the purchase of “any wine” not sold in its stores. The LCBO which controls all liquor sales in the province, and state that any Canadian wine is available, however the striking reality is that due to the significant markup they charge, it is not feasible for most small wineries to sell or make any profits under this system. Canada ranks 16th in global wine consumption but only 32% of it is Canadian made. Compare that to Argentina at 96%, Italy at 93%, the United States at 66% and surprisingly even 50% of Russia’s wine consumption is domestic. (www.wgao.ca) A study conducted for The Canadian Vintner Association, accepted as valid within the industry and liquor boards, showed that the entire Canadian wine industry (including Canadian and foreign blended wines) represents $1.15B in revenue. 100% Canadian wines represent $471.9M in revenue and $98M in liquor board mark-ups with half of the latter going to provincial treasuries. This is in extreme contrast to figures publicized by the Canadian Association of Liquor Jurisdictions (CALJ) which indicate that the cost would be $300M, which means that the entire Canadian wine industry would need to more triple to make this projection accurate. Interestingly, 83% of surveyed Ontarians believe that they should be able to buy wine over the internet from any winery

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Dan Albas, Member of Parliament for the region of the Okanagan-Coquihalla, presented Bill C-311, a private member’s bill which would remove federal restrictions prohibiting individuals from moving wine for personal use across provincial borders, which was unanimously voted in favor of and passed In June 2012 in Canada (Harris Decima June 2012 study “Canadians Embrace the Ability to Purchase Wines from Other Provinces”). Industry sources have also noted that the provinces have concern that by allowing internet wine sales, access to foreign wines could soon follow. A group of dedicated volunteers, under the direction of President and Founder, Shirley-Ann George, of FreeMyGrapes (freemygrapes.ca) has taken on the challenge of working with wine producers to bring the federal intent and spirit of Bill C311 to realization. FreeMyGrapes (freemygrapes.ca) is a grassroots, non-profit organization established by wine lovers who believe that Canada produces great wine, which is, unfortunately, often not available to Canadian consumers at their local liquor stores. They want to change this and feel that current Canadian laws limit the variety of Canadian wines easily available to Canadian consumers which then encourages the purchase of foreign wine. This is harmful to Canadian businesses and jobs by severely limiting the growth of Canadian wineries, discouraging wine tourism, and punishing those Canadians who wish to buy their own wines. FreeMyGrapes has generated a movement by creating awareness through social media, email campaigns and news-catching events which effectively educate consumers and catch the attention of politicians. According to George, “The challenge is that now we may have to go province to province advocating for the necessary changes to clarify the law.” To date, their determination and campaign has produced the needed changes in federal law with Manitoba, British Columbia and, potentially, Nova Scotia stepping up to the intent of federal Bill C-311. There are nearly 1700 growers and vineyards across Canada and 476 licensed wineries, which are largely rural, small busi-

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International News • November - December 2013

Map of Canada showing only 2 provinces, British Columbia and Manitoba, which have opened up their provincial borders to wine sales. Nova Scotia on the east coast has recently passed legislation and is awaiting regulations. nesses that do not produce in sufficient quantities or the financial capital to provide the substantial discounts required by the liquor boards to carry their product. Canadian winemakers are frustrated that their homegrown, Canadian product that supports small business and agriculture still cannot be sold online or by phone to Canadian consumers who want it, except in Manitoba and BC. Direct to consumer sales are essential to sustain these small enterprises and they certainly cannot afford to turn away any legitimate customers from outside their own province. Some, however, are choosing to ignore the provincial restrictions and are acting on what they feel was the intended spirit of C-311 at the federal level. Painted Rock Estate Winery of Penticton, BC sells directly to Ontario consumers who request their product because it helps to expand the visibility of their wines and contributes to the viability of the small business. Direct marketing to consumers is a growing trend, especially with something as personal as wine, so making connections directly with wineries adds to the development of a loyal consumer following. Additionally, Wine related tourism is growing within Canada, with an estimated total impact of $1.2 billion annually. According to Dan Paszkowski, Canadian Vintners Association President & CEO, “The Canadian grape and wine industry contributes $6.8 billion in annual economic impact to the Canadian economy and supports more than 31,000 jobs — we are confident that removing internal trade barriers will further encourage industry market growth and new jobs.”

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The United States has undergone similar evolution with regards to internet wine sales across state lines. Forty states now permit direct-to-consumer wine sales which accounts for approximately 2% of all US produced wine with 75% of this being sold within the wineries’ own state, meaning that only half of one percent is shipped across state lines. Further, every US state, including Nebraska, that have opened up their borders have seen their own wine sales increase. This has already been confirmed in BC since the lifting of the regulation across their provincial border. In Manitoba it has been shown that since residents can go to a winery's website, place an order and have it show up on their doorstep, sales of Canadian wine from retailers have not declined, and in fact, Manitoba Liquor Marts reported an 11% increase in the sales of Canadian VQA wine over the previous year. Even though Bill C-311 was accepted as federal law nearly a year and a half ago, there are still many hurdles that need to be conquered. Hopefully, with the dedication of advocacy groups such as FreeMyGrapes, robust supporting data from the Canadian Vintners Association and a strong voice from consumers, provincial borders will soon open up to allow Canadian wine to be enjoyed across the country.

The Grapevine • November - December 2013

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International News • November - December 2013

The Changing Face of the U.K. Wine Industry. How Climate Change is Transforming British Wine and Vineyard Production By Neal Johnston

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he global marketplace for the production of wine and vineyards is in the midst of ongoing transformation. In Sussex, England the average temperature in 2013 is now a degree warmer than it was for most of the latter part of the twentieth century. One degree of temperature change in viticulture can mark the difference between a bad year or a good one. The familiar pattern of difference we are now seeing between the four seasons and climate change is creating a new global climate that has become more and more of a constantly moving and shifting metereological paradigm. The division of a year into seasons is general marked by changes in weather, ecology, and hours of daylight. The U.K. has four seasons much like the U.S. In Britain we can expect to have a spring, summer fall: ‘autumn’, and a winter.

grape vines. The moving and re-locating of grape vineyards to cooler parts of the world has its own problems. A recent report by the U.S. based journal, ‘Proceedings of the National Academy of Sciences (www.motherjones.com/bluemarble/2013/04/chart-how-climate-change-and-your-winehabit-threaten-endangered-pandas) ’, claimed that the transportation of vineyards could have disastrous effects for animals, including pandas, that currently live in places that could become prime viticulture land. Bridging the gap between climate change, the vineyard operator and eventual the consumer creates a new model and a kind of hybrid grape vine culture which has evolved and is already in existence. The vineyard owner, in this case the farmer, or the wine merchant must now revolutionist and completely reconfigure their perception of supply and demand to regain a stronger foothold in a competitive and changing market place. One that is not only as unpredictable as the weather itself, but in facing a market that has been doing its level best and on a global scale to give polarity to an ever increasing and changing local and global situation.

“Even an atheist may be ready to concede that a good wine is the taste of the gods”.

In Scotland- which is situated in the northern western third of the island of Britain and sharing a boarder with England to the south, the winters there are now on average sixty per cent wetter than they were in 1961. And the growing season has increased by thirty three days. With regional variations here in the U.K. we can expect to see a much more confused weather system. With wetter winters, drier summers, and less snow and frost. The altercation between climate change and traditional seasonal patterns i.e. changes in the weather means that we loose out, and loss sight of nature more or less to some degree.

Paul Carvel. Belgian writer and editor b.1964

The kinds of grapes that grow well on British soil in vineyards are now shifting quite rapidly. Until relatively recently the English wine (www.guardian.co.uk/lifeandstyle/wine) industry tended to rely on high-yield, cold climate Germanic

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The change has come about primarily through natural causes. The main cause of the current global warming trend is the human expansion of the greenhouse effect, warming that results when the atmosphere traps heat radiating from Earth toward space. Certain gases in the atmosphere block heat from escaping. Long-lived gases, remaining semi-permanently in the atmosphere, which do not respond physically or chemically to changes in temperature, are described as ‘forcing’ climate change whereas gases, such as water, which respond physically or chemically to changes in temperature are seen as ‘feedback.’ Finding the equilibrium between climate change and viticulture develop-

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International News • November - December 2013 ment will help improve and sustain consumer interest. It is not so much a case of mix and match. It is far less arbitrary than that. It is going to be more a case of mix and then mix again. The producer and the retailer must now act accordingly to compensate for the bad weather patterns of climate change, in order to retain profits and margins. Currently the UK produces between three million and five million bottles of wine a year <http://www.englishwineproducers.co.uk/background/stats/> . The current crisis facing vineyards and the change of direction within the perimeters of vineyard production is forcing farmers to entirely shut down and abandon using previously more reliable crops. Geologist and viticulture expert Professor Richard Selley <http://www3.imperial.ac.uk/earthscienceandengineering/people/emeritusandvisiting/selleyr> worked as a consultant at the UK's biggest vineyard, Denbies in Surrey. He believes that within a generation- of about twnety five years, the next generation after that will have to have to replace the current vines with other varieties better suited to a warmer climate. A speculative wine map he has produced shows Chardonnay growing mostly in northern England, the Welsh mountains and Scotland. Merlot in much of the rest of the country, with the south coast of England being fit only for raisins. As the U.K. is a member state of the European Union, it must follow E.U. laws on wine production, distribution and sale. These rules apply to three key areas: quality and additives in making different types of wine, labelling, and record keeping. The Food Standards Agency enforces these wine laws in the U.K. through its Wine Standards Branch, with which all U.K. vineyards must register. Local authorities issue licences for trading in wine and check that the trading standards legislation is not being broken. H.M. Revenue & Customs regulates import duty, excise and VAT Industry self-regulation by the Wine and Spirit Trade Association which also helps to maintain standards, as well as representing the interests of wine trade businesses. Labelling rules apply to all wine produced and marketed in the E.U. In the absence of specific wine-labelling rules, food regulations apply. Trading standards and trade descriptions may also apply. Some information must be included on the bottle label for the different categories and subcategories of wine. There are also differences in requirements for the U.K. the E.U. and other regions. Julia Trustram Eve is the Marketing Director of the U.K. company- ‘English Wine Producers’, in Leicestershire, England. I asked her about some of the more important concerns facing vineyard producers in the U.K. today as compared to other countries.

What Kinds of Pests and Diseases are you encountering? “Being a northern European wine growing region, our challenges are much as you’d find with any other similar region. We are really no different. Mildews in some conditions, for example, frost at key growing stages – all are combated in the same way as anywhere else, namely sprays and for frost there are a number of methods applied that you’d find in any other

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vineyard across the globe. Birds and wasps can be a problem particularly in the later stages of growth when the grapes are riper. Again, there are various methods of preventing wide scale damage. Prudent vineyard management will prevent a lot, being vigilant is vital, and sharing information between vineyards is also enormously beneficial”.

What new varieties of grapes are there? “In recent years, new hybrid varieties such as Solaris, Orion and Phoenix have been introduced, but they occupy a very small percentage of total plantings. They seem to do well over here and they produce some good resulting wines. Our main area now however is in the growing the traditional varieties for English Sparkling Wine, with some forty five per cent currently planted with Chardonnay, Pinot Noir and Pinot Meunier”.

What are the labour pool and costs of production on your vineyard? “I don’t know of any issues at all. Obviously the producers have to keep to the employment regulations and stick to them which they do. There have been some recent changes to casual labour legislation, which over harvest is of course something that some vineyards are aware of – but they get on with it and there have been no issues, as far as I know”.

What kinds of new technology have you been using lately? “I am not aware of ‘cutting edge’ technology that is new to the wine world and over here. I know one new winery has installed Coquard presses. Not the first I hasten to add – which is the latest in pressing equipment from Champagne, so what you will find in an English sparkling winery would be what you will find in Champagne in this and other areas. In the commercial producers, I’d say that is what you’d find anywhere in the world”.

General Statistics: “We have just started harvest here and are anticipating a good, hopefully big, harvest as we’ve had a successful growing season this year. Trends: sparkling wine – this is the growth sector. Currently I’d say around sixty per cent of all our production is now sparkling and this will continue to increase over the next few years, as the acreage planted recently comes in to production – in the last eight years or so, acreage in the U.K. has nearly doubled and most of that is for the production of sparkling wine. Export is an area that is set to grow. Currently I’d say that less than five per cent of what’s produced is exported, and by a handful of producers. New and existing producers are now actively seeking new export markets. They are currently Scandinavia and the Far East mainly, but other countries are exported to the rest of Europe, Australia and a very small amount to the U.S.”

The Grapevine • November - December 2013

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International News • November - December 2013

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Wine Sales in Russia to Grow to 2017

he Wine industry in Russia is expected to grow up to 2017. According to the latest research by Canadian, the wine market is forecast to improve at a value Compound Annual Growth Rate (CAGR) of 2.8% during 2012–2017 with volume growth being slightly lower, recording a 1.8% CAGR. The star of the Russian wine industry to 2017 is Sparkling Wine. The category is forecast to see positive growth of 4.9% for value and volume, leading up to 2017. Canadian research shows that Sparkling Wine is breaking out from being only consumed for celebratory occasions. In 2012, the category recorded just over 25% share of the overall market, whilst its value share was just below half. Still Wine accounted for 58.8% of the volume of the Russian market and 40.8% of its value, making it the largest category in 2012. The CAGR is projected to be below the sector average, with a value growth of 1.0% and volume of 1.1% to 2017. In contrast, Fortified Wine claimed a 17.9% volume share in 2012, but the category is forecast to see declining demand for both value and volume; a CAGR of -0.4% and -0.3% respectively. Russian consumers appear to be losing interest in Fortified drinks.

Quality and Pricing Drive the Still Wine Industry in Germany to 2017

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erman consumers are price-conscious, so retailers need to put effort into communicating value-for-money with their Wines. According to research by Canadian, Still Wine was the largest category in the German Wine sector in 2012, with a 70.9% value share and a volume share of 83.6% of the entire market. Still Wine’s Compound Annual Growth Rate (CAGR) is above the sector average for both volume and value, at 1.4% and 1.6% respectively.

HASSLE FREE PRINTING & MORE!

In spite of the pressures caused by the Eurozone crisis, the wine sector is showing steady growth to 2017. Wine is projected to grow at an average value CAGR of 1.2% with volume expected increase by 1.3% to 2017. Germans are the world’s largest consumers of Sparkling Wine and in 2012 the category recorded a volume share of 14.6% of the sector. However, the data suggests that category growth may have slowed, with a volume CAGR of just 0.5% to 2017. Fortified Wine is also forecast to have only a small CAGR for the same period, with value increasing 0.2% and volume 0.6%. The category made up a tiny proportion of the German Wine sector in 2012, at below 2% for both value and volume, with consumers opting for still wine, and clear spirits, rather than the heavier and sweeter Fortified Wines.

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