Friday, May 25, 2012

Where the grape surplus may be going


It looks like more wine is being made in British Columbia than we are consuming.

That is a conclusion that can be drawn from the report of the 2011 grape crop compiled by BDO Canada LLP and released by the British Columbia Wine Institute.

The 2011 crop totalled 22,722 short tons and that was 28% higher than the 2010 crop of 17,732 tons. That jump reflects both the production from newly planted vineyards and the somewhat better growing conditions in 2011.

A crop that size should have produced at least 12 million litres of wine and perhaps as much as 14 million litres, depending on one’s assumptions on how many litres can be pressed from a ton of grapes.

According to the Wine Institute’s annual report, sales of VQA wine totalled 8,359,124 litres in the 12 months ended March 31, 2011. While appreciable volumes of wine from British Columbia grapes are sold without the VQA designation, it would hardly be enough to bridge the gap between VQA sales and the likely production from the 2011 crop.

Hence, the inference that some wineries at least might be dealing with a surplus.

There is every reason to expect that the gap between sales and production will be larger this vintage. Additional recently planted vineyards are coming into production. One estimate within the industry is that the 2012 crop could be as high as 29,000 tons with good growing conditions.

A grape surplus should mean lots of moderately priced wines for the foreseeable future. But don’t expect to see a British Columbia version Two Buck Chuck. The wineries can be pretty creative in soaking up the surplus.

Remember that perhaps 10 large producers own the majority of the vineyard acreage in the Okanagan. The major owners of vineyards include Mission Hill, Vincor, the Andrew Peller group and Mount Boucherie Estate Winery. These wineries, and those in the next size tier, all have lots of marketing clout to move their VQA wines. They also have outlets for wines that are surplus to their VQA brands.

The major wineries very likely are blending excess British Columbia wine with the bulk wine imported for the cellar-in-Canada wines. If your favourite CIC wine is tasting a little better, that may be the reason.

There is another sign that the market for British Columbia wine had become more competitive: some producers have sharpened their marketing. Some examples:

* More producers are making private labels for restaurants. Orofino Vineyards in the Similkameen is producing two wines for Vancouver restaurateur David Hawksworth while Okanagan Crush Pad has just launched two wines for the Cactus Club with chef Rob Feeney’s name on the label.

* A growing number of British Columbia wineries are signing up to supply restaurant wines in kegs through Vancouver Urban Winery.

* There is a growing push to release more wines in bag in box, both for the restaurants and for consumers looking for affordable everyday wines at home.

This latter effort has generated controversy because VQA wines can be sold only in glass and not in the boxed format. Summerhill Pyramid Winery was prevented last year from putting VQA on a box even though the wine the box was the same as the wine in the VQA bottle.

More recently, at a Wine Institute tasting, Okanagan Crush Pad was ordered to take down a display of empty three-litre boxes for its Haywire brand of wines. The Wine Institute associates itself only with VQA wine.

Haywire wines are also sold in bottle and have passed VQA, with flying colours. This is exactly the same wine that Haywire puts in boxes or in kegs, in a sensible effort to broaden its market while passing on packaging savings.

Christine Coletta, one of the owners of Haywire, made the argument in a blog – apparently the first one she has written

“Consumers are looking for value, and one way to give them that with 100% BC-grown wine is with affordable and environmentally-friendly alternative packaging, such as kegs (reusable, like beer kegs) and bag-in-box (1/3 the weight of a case of bottled wine),” she wrote. “Both of these alternative packaging options have been gaining lots of traction and many of the Okanagan’s best wineries are getting into the game; however, we can’t label these wines as ‘VQA’, as boxes and kegs are not BC VQA-approved packages.”

The rule that prevents VQA wines from being sold in the box format was put in place at the beginning of VQA two decades ago. At that time, bag in box wines generally contained imported bulk wine and the wine industry did not want to confuse the VQA image.

It is time to update those rules and rely on the British Columbia Wine Authority’s audit powers to make sure no one is cheating. But that probably won’t happen because the rule amending formula demands agreement from too high a percentage of the wineries.

How ironic is that that some good British Columbia wine is likely being blended into some of those cellared-in-Canada box wines!


At May 29, 2012 at 6:57 PM , Blogger Mystery Girl said...

So,large amount of those grapes will be for the wine-making. Well,it is a great investment.

Keg hire


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