25.3 C
New York
Monday, April 15, 2024

Wine Is Getting Pricier Thanks to a Logistical Nightmare

A fine wine can be a lot of things: oaky, fruit-forward, maybe even chewy. But wines of recent vintage also have the bouquet of a logistical nightmare, due to a brutal convergence of natural and human-made crises: drought and extreme heat, plus lingering supply chain hang-ups that have made it harder to get glass, cork, the aluminum for screw caps, and the metal capsules that wrap the tops of bottles. 

Winemaking is a delicate agricultural ballet embedded within a delicate logistical ballet, and both ballets are going off script simultaneously. “It's a perfect storm,” says UK-based wine importer Daniel Lambert. “Most people don't think about raw materials that are involved in wine production. Obviously, you've got the grapes—everybody gets that bit. But people forget that you have a bottle, you have a cork, you have a capsule.” Prices for all of those have been rapidly inflating, which translates to higher wine prices

For example, a rosé bottle may seem like a simple vessel for transporting fermented grape juice into a glass. But presentation matters: People want to see that nice pink color through clear glass. Bottle color isn’t much of an issue for red wine—that looks just fine in a dark green container. But clear glass can cost twice as much to produce, Lambert says, because it requires more purification, which requires more energy, which requires more money. It’s extra expensive for European manufacturers now due to the skyrocketing energy prices that have followed Russia’s invasion of Ukraine

Which bottle a winemaker can choose is also subject to legal rules and physics parameters. Sparkling wines like champagne require thicker—and therefore more expensive—glass to contain the pressurized liquid. And some geographic regions mandate that a certain kind of bottle be used for a certain kind of wine, so a producer can’t just switch to a cheaper alternative.

In winemaking, timing is everything. Unlike a beermaker, who can brew year-round, a vineyard completes one harvest a year, so the operators need to plan ahead for a shipment of bottles. And due to glass shortages, now they have to plan way ahead. “The biggest impact that we've seen with supply chain disruption is just a dramatic increase in how far ahead we have to order it,” says Jon Ruel, CEO of Trefethen Family Vineyards in Napa, California. “Something like glass, which used to be six to eight months, is now like 12 to 18 months. We haven't even picked the grapes yet. We don't know how much wine we have. But we have to decide how much we need.” 

The market for corks that go into those bottles has also gotten messy. Cork trees are a kind of oak native to the Mediterranean, and the material is harvested by carefully pulling the extra-thick bark off the tree without killing it. This process is repeated every nine years as the bark grows back. Portugal, which is home to a third of the world’s cork forest area, processes the bark into wine stoppers and ships them abroad. Then a company like Cork Supply USA prints a winery’s branding on them and adds a surface coating. Greg Hirson, that company’s vice president of product, says that while there isn’t a cork shortage now, climate change is making the supply less predictable. In times of drought, the trees get too dry to pull off the bark without damaging the underlying tissues and killing the plant. “So maybe we have to leave the bark for another year until we have a slightly wetter season,” says Hirson, or producers might not be able to extract as much as expected from a given forest. 

Most PopularBusinessThe End of Airbnb in New York

Amanda Hoover

BusinessThis Is the True Scale of New York’s Airbnb Apocalypse

Amanda Hoover

CultureStarfield Will Be the Meme Game for Decades to Come

Will Bedingfield

GearThe 15 Best Electric Bikes for Every Kind of Ride

Adrienne So

Pandemic-related shipping issues have also put a hiccup in the cork supply chain. It used to take around 27 days to get them from Lisbon to the Port of Oakland in California and into the Cork Supply USA warehouse. That regularity allowed the company to plan out how much material it would need to fulfill orders for wineries. But no longer. “At its worst—which I would say was probably April, March 2022—we were at like 130 days, but plus/minus 60,” says Hirson. “Sometimes the stuff would show up four weeks before we were expecting it, and sometimes it would show up three weeks after we were expecting it. So the ability to plan just totally went out the window.” In response, the company had to increase its California inventories to fully supply its customers. That increased costs, which also meant prices went up. 

A cork shipment delay may not sound like a big deal, but it’s critical for smaller wineries that don’t do their own bottling. They must hire a mobile bottler who shows up with a big truck, into which they pump the wine so it can get dispensed into bottles. These wineries have to supply their own bottles and corks—and have them ready on the right day. “You make that date for the mobile bottler six, eight, 10 months ahead of when you're planning to bottle,” says Hirson. “So if your supplies aren't there on your day of bottling, and the bottler is scheduled for the next 10 months, there's no ‘Come back tomorrow when my stuff gets here.’”

There are alternatives to cork stoppers, in the form of tin or aluminum screw caps, which aren’t as sensitive to the whims of nature. But they are sensitive to war: Russia produces much of that aluminum, which also is used to make the protective “foil” capsules you peel off before uncorking. So in addition to disrupting the supply of energy used to produce glass, Russia’s invasion of Ukraine has also held up the supply of wine-bottle tops. “We've had a lot of wineries who haven't been able to sell their product through to their end user because they ran out of capsules,” says Lambert.

And that’s to say nothing of the wine itself. Grapes are highly susceptible to changes in temperature—that’s partially why zinfandels grown in different parts of the world can taste so different. Sustained, extreme heat is terrible for grapes. “The plant will often shut down and have sometimes severe impacts on the ability to photosynthesize and make sugar, and even grow,” says Elisabeth Forrestel, an assistant professor at UC Davis who studies the effect of climate on grapes. “Heat waves also cause the degradation of really important phenolic compounds related to color in the wine and flavor profile.” 

Cherished French wines, then, are at the mercy of an increasingly hot and erratic climate. “As soon as you get to the temperatures that we saw in France for a sustained period in June, July, and August—46, 47, 48 [degrees Celsius]—the vines themselves can't really cope with it,” says Lambert. “Temperatures were dropping down to 32 to 28 overnight, so the vines were able to recover from the daytime temperatures, but it seriously affects the quality.” 

Most PopularBusinessThe End of Airbnb in New York

Amanda Hoover

BusinessThis Is the True Scale of New York’s Airbnb Apocalypse

Amanda Hoover

CultureStarfield Will Be the Meme Game for Decades to Come

Will Bedingfield

GearThe 15 Best Electric Bikes for Every Kind of Ride

Adrienne So

The shock is even worse if the plant is also struggling with a lack of water, since a grapevine releases water vapor to cool itself. While a drought-stricken vine can still produce high-quality berries, less water means less growth, reducing the eventual yield of those berries. In parched Bordeaux, Lambert says, harvests are down 50 percent. “Compound that with glass, compound that with the price of corks and capsules all going up,” says Lambert. “You're seeing inflation in every type of raw material going into the production of a bottle of wine.”

All of this is bad news—for wine producers facing lower yields and higher material prices, and for their customers, who still expect to pay roughly what they did last year. “Wine is a finite production. There might be a lot of it, but it is not Pepsi Cola,” says Lambert. 

How much a winemaker raises prices depends on their particular circumstances. “Generally, the wine traders and industry hate increasing prices,” says Lambert. “If you go from an £8.99 price point to a £10.99 price point, you could drop your sales by 50 percent.” Yet Lambert expects an increase in shelf prices in the UK of between £1.50 and £2.25 per bottle. Brexit also makes importing wine more difficult, helping send prices higher. “Brexit is the cherry on top, which is an unnecessary burden,” says Lambert. “That's where the UK is shooting itself not just in both feet, but in both arms as well.”

Despite this chaos, the industry is adapting. Winemakers like Trefethen Family Vineyards are experimenting with how to better grow grapes as the Napa Valley’s climate transforms. The industry as a whole is investing heavily in research into how it might protect grapevines from increasingly severe droughts and heat waves, says Forrestel, who researches how to prevent water stress in the plants. She thinks it’s a chance for the traditionally rigid winemaking world to express more willingness—or face the outright necessity—of experimenting. “It's an opportunity for being innovative and trying new things. And for, hopefully, consumers and others to be receptive to new things and new styles—to try new varieties, to try blending, to not focus so much on one cultivar,” she says. This could help ease demand for the grapes that are most under climate stress and boost the market for ones that are better adapted.

Meanwhile, companies might collect cork farther north in Portugal, says Hirson. And Ruel says Trefethen is diversifying its delivery methods to avoid some of the glass bottle supply problems. It is sending reusable kegs to restaurants, which bartenders can use to pour wine by the glass, then return to the winery for a refill. (After all, you don’t have to see a nice chardonnay through an increasingly-difficult-to-procure clear bottle to enjoy it.) 

Ruel points out that an industry as old as winemaking has already weathered millennia of constant change and is prepared to keep adapting. “In the history of our craft, I'm reminded that it goes back thousands of years,” says Ruel. “Wine has been through recessions and pandemics before we even had words for recession and pandemic.” 

Related Articles

Latest Articles