Business Engaged with the Production of Wine

Question 1

What is an estate producer?

Answer 1

An estate producer producers wine exclusively vineyard land that they own or lease

Question 2

What is the benefit of being an estate producer?

Answer 2

Estate producers have control over all aspects of grape growing and wine making

Question 3

What is the main drawback of being an Estate Producer?

Answer 3

The cost of managing the vineyards, as well as, equipping and running the winery

Question 4

What is the second large drawback of being an estate producer?

Answer 4

If there is a difficult vintage, either due to poor growing conditions or loss of crop, there may only be a small portion of wine to produce and sell

Question 5

List the two options that growers have for selling their grapes

Answer 5

The first option is to enter into a contract with a partner for one or multiple vintages

The second option is to sell grapes on the spot market. Which means that the grower does not have a contract and will sell the grapes at the time of harvest. (This option has the highest risk/reward)

Question 6

Grower-producers are fairly common in which wine region?

Answer 6

Burgundy

Question 7

Define what a grower-producer is

Answer 7

A grower-producer is a grower who grows grapes, produces wine, but then sells that wine to a merchant to mature and bottle.

Question 8

What are the main advantages and disadvantages of being a grower producer?

Answer 8

The advantage is that grower-producers do not have to incur the cost of maturing, bottling and getting the wines to market

The disadvantage is that grower-producers will make a smaller profit than if they had sold the finished wine

Question 9

What is the french word for merchant?

Answer 9

Negociant

Question 10

What is the traditional role of a merchant?

Answer 10

The traditional role of a Merchant was to buy immature wine, mature it and sell it under the merchants name.

In many cases the merchant would blend the wines of different producers prior to bottling.

Question 11

What is the biggest risk associated with being a merchant?

Answer 11

That they do not have control over the grape growing or winemaking process.

Question 12

How did merchants over come the lack of control over the grape growing and winemaking?

Answer 12

They began to make their own wines and then provide technical support to suppliers so that the wine or grapes were at the required quality.

Question 13

What is one of the key advantages of being a Merchant?

Answer 13

That even if they have to have higher labor cost due to retaining so many viticulturist and winemakers, they do not have the expense of buying and managing vineyards

Question 14

What is a micro-negociant?

Answer 14

Small merchants in Burgundy who specialize in small production wines from individual vineyards that can be sold at super-premium prices

Question 15

What is a grower-merchant?

Answer 15

It is a producer who owns land and produces wines off that land along side wines made from brought-in grapes

Question 16

Describe what a co-operative is

Answer 16

Co-operatives are owned by a group of producers and sell wines made from grapes grown by their members

Question 17

What is the main benefit of having a co-op?

Answer 17

Members can pool their financial resources together, meaning that they can afford expensive winemaking equipment that they may not have been able to buy otherwise.

Question 18

What are some other benefits of being a member of a co-op?

Answer 18

• Co-op members gain access to expert viticulture and winemaking services
• Members can also get advice on how to market, packaging and sales

Question 19

How are co-ops managed?

Answer 19

• The management structure may differ between co-ops, but the majority of co-ops adhere to the practice of democratic control. Meaning most major decisions will put to a vote
• Due to decisions being made by majority rule, the decision-making process can be slow and cumbersome. Which also means that not all decisions will be to everyone’s liking

Question 20

What is the name of the quality based co-operative based in Chablis?

Answer 20

La Chablisienne

Question 21

What are the differences between Custom Crush Facilities and Co-Operatives?

Answer 21

Custom Crush Facilities(CCF) are a variant of Co-Operatives but growers do not own the facility. Plus depending on the size of the CCF, it may just be for small premium wines and/or inexpensive, large-production wines.

Co-ops also pay the growers based on the quality of the fruit brought in. Where as CCF will charge for the grower to use the facility, but then turn the wine back over to the grower and the grower makes all the sales profit.

Question 22

Who are the main customers of Custom Crush Facilities? And what is one of the main benefits these customers see by using this service?

Answer 22

Usually new producers who do not have the capital to invest in winery equipment. These new producers also can benefit form the expertise of the winemakers at the Custom Crust Facilities.

• It is important to note that since these new producers are turning all of the winemaking over to someone else, it is important that the grower and the winemaker have a good working relationship.

Question 23

What is a virtual winemaker/winery?

Answer 23

These are wineries or wine makers who do not actually own any land and/or winemaking facilities. Instead they buy grapes or juice and rent a wine facility to make their wines.

These can range from small premium wines to large-volume brands