Barrels

I received an advertisement a few days ago from Alain Fouquet & Associates offering barrels for sale. Top-of-the-line barrels from Allier and Troncais were going for euro 740, mid-range barrels, a blend from Bertrange, Nevers, Jupille, Argonne and Vosges were going for euro 695, barrels of a blend from France, Northern Italy and Northern Spain were going for euro 620, and from a blend of Eastern European oak euro 550. American oak barrels were going for $390.

I think the euro hit $1.50 today, making a top-of-the-line French oak barrel an expensive proposition at $1110 each.

Barrels can be used two or three times before they no longer produce the desired effect. They may be reconditioned at some expense to provide a longer life, at which point they are good only for storage.

It's no wonder the price of wine is heading dramatically upward.

Well, I guess it is a question is what it is " the desired effect"

So, roughly 250 bottles to a barrel. If one goes for 50% new oak (using top of line French oak), the oak cost is a little over $2 a bottle. Is my math wrong?

If one goes for a more restrained style, Freddy Mugnier does 20% new every year. So about 90 cents a bottle.

Your math is right. I sent a similar response to those two people that right the wine column in the Wall Street Journal a while back when they used barrel cost as an excuse for the $20/bottle difference between two bottles of wine. While $2/btl at the wholesale level is significant once you add in all the markups along the way, it still comes no where near the impact that barrel cost often is credited to end item pricing by those that write about wine.

You are both correct, of course, but I expect that by the time the bottle of wine made it from producers cellar to your dinner table, the cost/bottle would be 3 or 4 times greater than the additional $2 it cost the producer to make. $6 or $8 added to a $30 bottle of wine, the markups suggested by Brian, is a lot of money in my book.

Hi Alan,
In calculating the price per bottle of barrel aged wines, besides the cost of the actual barrel aren’t there other considerations to be made. Such as storage and “rent” space, barrel maintenance, cellar operations related to barrel storage (batonnage or lees stirring, racking, topping up, etc). I assume all this would add to the cost of a bottle stored in an oak barrel.
Salute

"They may be reconditioned at some expense to provide a longer life, at which point they are good only for storage."

I'm curious as to how you recondition a wine barrel. I've seen reconditioning of Tequila barrels in Mexico, but that was more structural repair. You mean they resurface them?

"They may be reconditioned at some expense to provide a longer life, at which point they are good only for storage."
I'm curious as to how you recondition a wine barrel. I've seen reconditioning of Tequila barrels in Mexico, but that was more structural repair. You mean they resurface them?

To misappropriate a phrase, there is more than one way to reskin a barrel. Here's an older article on the topic: Reinventing the Barrel: How ReCoop and Other Companies Are Rejuvenating Barrel Life and Saving Trees in the Process

.

Barrels can be used two or three times before they no longer produce the desired effect.

The "desired effect" envisaged in this statement is the imparting of overt oak flavours, which is a development of the last two to three decades. There are many fine producers in France using barrels much more than three times and, provided they are properly cleaned, they are just fine for the real purpose of oak ageing, which is slow oxygenation to soften and improve the mouth-feel of the wine.

If the rising cost of new barrels reduces the prevalence of assertively parasite oak flavours, that is just fine by me. However, I fear that those who want them as a flavouring additive will just turns to chips, powders and staves.

Hi Alan,
In calculating the price per bottle of barrel aged wines, besides the cost of the actual barrel aren’t there other considerations to be made. Such as storage and “rent” space, barrel maintenance, cellar operations related to barrel storage (batonnage or lees stirring, racking, topping up, etc). I assume all this would add to the cost of a bottle stored in an oak barrel.
Salute

This is correct when comparing against not using barrels at all. However, when not using barrels, there is still bulk storage cost and associated labor, space, etc. that we are not considering in the simple math of this thread. To be completely accurate, one would have to add the cost like you list to the actual barrel cost but then deduct the cost of the alternatives. I believe 1000 gallon stainless steel tanks can be had from a mere $7000 these days so the impact would be small when compared to barrels. Likewise there is labor association with cleaning and maintenance etc of larger tanks but again small compared to barrels.

These cost do not come into play if one is looking at the difference between 100% new oak and say using 33% new oak, 33% one year old and 33% two year old. In this case all the associated cost are the same. This is also the most likely case to be considered for the United States, at least for red wine production.

Thanks Brian!

Tim wrote:
…….for the real purpose of oak ageing, which is slow oxygenation to soften and improve the mouth-feel of the wine.

Oak aging also can “deepen” the colour of the wine, and “concentrates” the wine. (The actual percentage of alcohol by volume could fluctuate at times).

Salute

To misappropriate a phrase, there is more than one way to reskin a barrel. Here's an older article on the topic: [url=http://www.winebusiness.com/ReferenceLibrary/webarticle.cfm?dataId=32265][b]Reinventing the Barrel: How ReCoop and Other Companies Are Rejuvenating Barrel Life and Saving Trees in the Process

Thanks Gary, very intersting piece. Here in Kentucky the Bourbon makers only get to use a barrel once, but I'm quite sure they are able to sell them to others down the line who want a flavorful barrel for another kind of alcohol. I've had some pretty magnificent stout that was flavored in a used whiskey barrel.

Well, I guess it is a question is what it is " the desired effect"

So, roughly 250 bottles to a barrel. If one goes for 50% new oak (using top of line French oak), the oak cost is a little over $2 a bottle. Is my math wrong?

If one goes for a more restrained style, Freddy Mugnier does 20% new every year. So about 90 cents a bottle.

Dale,
Don't we all know that the cost of this wood if just the beginning of the pain the we consumers will experience due to the price increases. Yes, the € is up at the time, and we know that is going to hurt us. but I doubt that that disparity will account for all the increases. IOW, if wood goes up $1.00 per bottle then we will pay at least $2.00 and maybe even $3.00 and of course that doesn't include the other higher costs like shipping fuel going where it is obviously going. I am thinking that the $10 wine is about all gone, and is now $20, I sure am happy that I have some in the cellar that I got for as little as the case and half of 2004 Domaine La Montagnette & Les Galets (Cave d’Estezargues) at $6.99 minus a %5 discount. I won't find that é anytime soon. Another find was the Ch. Lancyre rosé 2006 version at that same price. The 2007 of this delicious pink is out now, and in my local store is marked $16.99 per 750ml. I will be finding another rosé for the upcoming summer. My problem is at my age can I wait long enough to see these prices come back down? I fear not. Sorry if my ramblings seem convuluted.

I received an advertisement a few days ago from Alain Fouquet & Associates offering barrels for sale. Top-of-the-line barrels from Allier and Troncais were going for euro 740, mid-range barrels, a blend from Bertrange, Nevers, Jupille, Argonne and Vosges were going for euro 695, barrels of a blend from France, Northern Italy and Northern Spain were going for euro 620, and from a blend of Eastern European oak euro 550. American oak barrels were going for $390.

I think the euro hit $1.50 today, making a top-of-the-line French oak barrel an expensive proposition at $1110 each.

Barrels can be used two or three times before they no longer produce the desired effect. They may be reconditioned at some expense to provide a longer life, at which point they are good only for storage.

It's no wonder the price of wine is heading dramatically upward.

Alan,
How much of your wine sees French oak? What percentage is new oak of any kind? Of course anyone can easily see why a winemaker would like to use some (at least) French, but one can also see that the $$ would never come back to a small local producer.

Well, I guess it is a question is what it is " the desired effect"

So, roughly 250 bottles to a barrel. If one goes for 50% new oak (using top of line French oak), the oak cost is a little over $2 a bottle. Is my math wrong?

If one goes for a more restrained style, Freddy Mugnier does 20% new every year. So about 90 cents a bottle.

Dale,
Don't we all know that the cost of this wood if just the beginning of the pain the we consumers will experience due to the price increases. Yes, the € is up at the time, and we know that is going to hurt us. but I doubt that that disparity will account for all the increases. IOW, if wood goes up $1.00 per bottle then we will pay at least $2.00 and maybe even $3.00 and of course that doesn't include the other higher costs like shipping fuel going where it is obviously going. I am thinking that the $10 wine is about all gone, and is now $20, I sure am happy that I have some in the cellar that I got for as little as the case and half of 2004 Domaine La Montagnette & Les Galets (Cave d’Estezargues) at $6.99 minus a %5 discount. I won't find that é anytime soon. Another find was the Ch. Lancyre rosé 2006 version at that same price. The 2007 of this delicious pink is out now, and in my local store is marked $16.99 per 750ml. I will be finding another rosé for the upcoming summer. My problem is at my age can I wait long enough to see these prices come back down? I fear not. Sorry if my ramblings seem convuluted.

Maybe I am missing something but I don't think barrel cost plays much of a role in the sub $10 wine category. By the time one accounts for grape cost, labor, infrastructure, profit, etc. I can not envision that many new barrels are used at this level and have those wines still be profitable. You may recall that there have been some vineyards in California that were not harvested in recent years since the cost to harvest exceeded what was believed could be made from the finished wine. Margins in the $10 wine world are just to small to allow for barrels.

The other cost you mention are not production cost so while they impact retail prices, they are essentially different than barrel prices in that those are attributed to the distributor and not the winery.

Bob,
I don't use any French oak. I retail my wine for $12-$15/bottle and those prices will not support expensive barrels. If I made a wine I thought would benefit from French oak, I would use chips. In my market, not overdoing oak is probably more important than where it came from.
Best