San Francisco’s ‘Champagne issues’ — Wine business suffers provide chain woes
Winemaking has never been an easy business, but many in the industry say this year has been one of the toughest in recent times.
California winemakers, still recovering from last year’s scorching forest fires, anticipate another year of historic drought as retailers and restaurants are hit by the shift in consumer behavior sparked by the pandemic.
Now the industry is also confronted with massive bottlenecks in the supply chain. Delays in ports have left shops and importers reliant on foreign shipments with no inventory. This has disrupted local bottling, labeling and wine-growing businesses.
“2021 just won’t work,” said Stuart Smith, founder of Smith-Madrone Winery on Napa’s Spring Mountain. “Everywhere you go, things that were easy are no longer easy.”
Stuart Smith, right, founder of Smith-Madrone Winery, helps press the grapes at the winery in St. Helena, California on Wednesday, September 8, 2021. (Courtesy Smith-Madrone Winery)
As the pandemic progressed, Smith struggled to get the most basic necessities like PVC pipes or galvanized fittings for sprinklers and fire fighting. “It’s not just about winemaking. It’s all, ”he said. “Right after the glass fire, I needed more chainsaws – I couldn’t get one.”
All of this happens while he struggles to find water for his thirsty vines. “This is a colossal, historic drought,” said Stuart. “We’re all scared because we’re running out of water and our reservoirs are empty.”
But not only winemakers feel the pinch. An entire branch of bottlers, label manufacturers and cooperatives is also feeling the strain caused by the overloading of the ports.
“The word disruptive doesn’t describe how dire the situation is,” said Erica Harrop, founder of Global Package, which supplies glass bottles to high-end Napa wineries. “It’s total chaos”.
Harrop said freight costs have skyrocketed as demand for goods has increased. Meanwhile, ports don’t have enough dockers, dockers or truckers to keep the flow of goods going, resulting in a backlog of products waiting to be reloaded. Those additional costs, she said, are passed on to her customers and ultimately to consumers.
“We fill around 20,000 bottles in a container. And if it costs $ 20,000 to ship, that’s a pretty straightforward calculation, ”she said. “With glass, this has an immediate effect on the cost of the product.”
On Wednesday, the Biden administration announced a plan to keep the Port of Los Angeles open “24 hours a day, seven days a week,” reflecting the already extended opening hours in the Port of Long Beach to move more goods faster.
However, companies that buy inventory months in advance remain affected by the delays. Josh Trowbridge, CEO of Tonnellerie Ô, a Benicia-based barrel maker, said he waited a month to receive a shipment of wood from a ship docked outside Half Moon Bay.
“It was just so frustrating,” he said. “What you need is right there, and it’s not even in port.”
Trowbridge watched wood prices skyrocket during the pandemic as people stuck at home focused on home improvement projects. Just this week he was told that the price of French timber would rise by 20-30%. Combined with the increased cost of shipping goods, he fears that his barrels will be unaffordable for many wineries in the years to come.
Wine label makers are also getting into trouble as paper is scarce and demand for such services explodes.
“Demand for wine had gone above the charts in the past year and a half,” said Travis Pollard, vice president of ASL Print FX in Napa Valley, finding that business had grown 57% over the past year.
However, satisfying this demand has been challenging as paper suppliers have moved to making products from corrugated cardboard that are easier for online retailers like Amazon to make, as opposed to fine paper, which is needed for wine labels.
“The availability of the raw components for making this paper is tight,” said Pollard. “What we are seeing is a huge change in the way people shop and the huge impact this is having on our industry.”
The disturbance is already seeping through to local wine shops.
Some of the cheaper wine selections at Decant SF on Thursday, October 14, 2021. (Kevin N. Hume / The Examiner)
“If you look at the shelves at Gemini, you can see it all along the line,” says Dominique Henderson of San Francisco’s Gemini Bottle Co., which focuses on natural wines from small producers. “You see a Riesling bottle and there is something like Pinot in it, or there is Blaufrankisch in it or something, because people have ordered whatever vessels there were.”
As the holidays get closer, wine stores try to figure their way around how to stock the shelves when there is less wine and it takes a lot longer to arrive.
French wines were particularly hard hit this year as frost, bad weather and mold ravaged the vineyards. “Champagne was very difficult to come by,” said Simi Grewal, co-founder of Decant SF. “Our shelves are definitely a lot lighter than usual.”
The champagne department at the Decant SF wine shop on Thursday October 14th, 2021. (Kevin N. Hume / The Examiner)
Yet when Grewal tries to convey this inedible reality to their customers, the warning is often answered with a collective shrug. “They kind of laugh at it like, ‘Oh, champagne problems,’ but it’s like, ‘No, literally,'” she said. “If you know you want to ship 100 bottles or 50 bottles of something, we need to start planning now.”
jwolfrom@sfexaminer.com
