Monday, 9 October 2017

Key Decisions running a wine estate

 So, you have bought a Chateau, Domaine, Quinta, Estate or Farm and you want to produce some exceptional wines.
The writing of the cheque for £$€ X million was painful enough. But you will probably need that money in reserve to upgrade the wine estate and improve the quality. The first investment (and most long term) is the most important......the vineyard. Are you happy with the vines planted on the specific soils? Do you need to replant some old vines? Is the density of planting correct? Are the soils vibrant with the specific level of micro organisms? Or are they compacted and dull? We often say that 80% of winemaking is from the vineyard.

The iconic Chateau Latour in Bordeaux. Francois Pinault bought this Chateau in 1993 for £86 million without visiting the estate. 
The terroir is a crucial aspect of any vineyard, and more particularly in France Appellations, as they are not allowed to irrigate. So the soils, as well as the inclination, altitude, subsoils, drainage, and location are all crucial.

Nature is also an irascible unknown that can effect your success or failure to run a wine estate. In fact nature is the most crucial aspect when you roll the dice.

Having a cellar full of wine is a luxury, but also a significant cost.
Having spoken recently to a well known gentleman in Pomerol, who owns a well respected estate, he mentioned three key decisions that he needs to make during the year that he can not go back on or change. Everything else should fall in to place if nature is kind and if the correct people are employed to do the work.

Harvest machines might be a lot less expensive than manual labour, but where is the romance?

The wine sits in expensive oak barrels (c€900 per barrel) for nearly 2 years before bottling. Cash tied up.
The three key decisions are:
1. The harvest date.........
This obvious decision is based on a large element of scientific analysis and also an element of wisdom and knowledge. It might be distracting if all your neighbours are in full harvest, when you are waiting for three extra important days for maximum maturity for your grapes. Or if there is a threat of rain in the coming days, do you try to pick the grapes as soon as possible or wait for the rain to pass and maybe have the problem of soggy, rotten grapes to pick. A key decision that can not be reversed.

2. The bottling and maturity........
There are many variables for ageing wine and ultimately deciding upon which style of wine you want in the market. A light fruity rose? A soft easy drinking red? A wine for long ageing and tight with tannins? Once the big decision to bottle the wine has been made, then you can not reverse that decision. A wine might taste fabulous in the tank or barrel, but it will change and metamorphosis once in the bottle.

3. Setting the market price..........
If you go too low, you will sell out too quickly. If you go too high, you might not sell at all.
Setting the correct market price for your wine will of course be based on your production costs and also your anticipated ROI. But also in Bordeaux you might need to consider the classification, or what other similar Chateaux are achieving for their wines. For Bordeaux wines, (which are mainly sold as futures) setting the price is a key decision that can not be reversed.

Many people buy wine estates with their heart rather than their head. Many aspects of nature can be a gentle roller coaster and hopefully a positive experience. However these three decisions above are the influence of humans in the wine making and selling process.

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