It was with a little bit of sadness that I watched the liquidation of assets at the struggling Crushpad in California in recent weeks. The do-it-yourself by-the-barrel winery was a great way to get people hands-on with winemaking. As a former client (I made my own barrel of Syrah there from the 2007 vintage a few years ago) and as a pro-consumer wine advocate, it was tough to hear how clients were being forced to pay additional fees to get the wines they had already made and paid for.
So, I was interested to hear how Crushpad Bordeaux was doing. The operation is based in the town of Bages behind Château Lynch-Bages, in Pauillac, Bordeaux. It was started in 2009 by Stephen Bolger as a partnership with the California-based Crushpad, but in April of 2012 the Cazes family of Lynch-Bages bought out the California partners and today the operation is completely separate from its U.S. namesake. And apparently thriving, growing at a 50 percent rate in its first three vintages, according to Bolger, Crushpad Bordeaux's CEO.
Since the 2009 harvest, 300 clients have made their own wines at Crushpad Bordeaux and production increased to 70 barrels in the 2011 vintage. Eric Boissenot is on staff as consulting enologist for the clientele, which is 50 percent European (covering 14 countries) and then equal parts Asian and American clients.
Bolger, 48, had no wine background before starting Crushpad Bordeaux, having spent 13 years working with industrial minerals, then moving to the technology sector.
"But eventually I wanted to do something that aligned with my passions," said Bolger when I interviewed him by phone today. "I saw Crushpad in California and thought it could work in Bordeaux. But it turns out high-quality fruit isn't sold openly on the market as it is in Champagne for example. We had to deal with a vineyard directly instead. Plus there were AOC regulations that made the model tricky to get started. I talked with Jean-Charles [Cazes] and at first he thought there were too many hurdles. But we worked through things, changed the model slightly and eventually he got behind the project."
Today, the Cazes family and Bolger are the only owners of the company, currently called CCW-Formerly Crushpad Bordeaux. The company is in the process of changing its name, to distance itself from the troubled Crushpad brand in the U.S.
"We were caught between a rock and a hard place," said Bolger. "We wanted to disassociate ourselves from Crushpad U.S. One way is to make a lot of noise and let people know. The other is to do nothing and hope people figure it out. With recent events, we've decided we need to scale up and let people know that we are different."
Bolger went on to discuss how the model for Crushpad Bordeaux (pending its name change) is different from its former U.S. partner and why the future looks bright.
"The growth in Crushpad U.S during 2004 to 2009 was fueled by commercial clients and it became a majority of Crushpad's business—about 60 percent. And they put a lot of assets toward that end of the business," said Bolger. "But in the economic downturn in 2008, that took a real hit. And suddenly many clients that were here today were gone tomorrow. In Bordeaux, our model is primarily based on the individuals who are doing it for fun, whereas commercial clients are only 25 percent of the business here."
"Plus, the U.S. operation built its winery without taking into account economies of scale. All of the clients there had individual t-bins [small fermenting vats] in the winery for the primary fermentations, and that took a lot of logistics and cash to manage. Here, we only see about 5 percent of the clients actually coming at harvest to do their own work. And with the Bordeaux concept of a larger vineyard and blending varieties, the primary fermentations are done on a larger scale. The client's process here really begins when the wine moves to barrel and then the client starts to individualize their wine. So logistically it's a different model."
"[Crushpad California] also invested a lot of money into the technology side first—following your wine online and so on. They were in many ways a tech company trying to be a winery. We've focused on the winery side first and will slowly add the website and electronic client interaction parts going forward."
"But I am also the first to recognize our heritage, and it's important to note that the idea came from Crushpad in America," said Bolger. "And I think it's very important for people to be able to experience making their wine regardless of the problems of the U.S. company."
So to that end, Bolger announced that any Crushpad U.S. clients who have paid their initial one-third deposits for the upcoming 2012 harvest, can switch over to Crushpad Bordeaux at no additional cost (clients need only pay the remaining installments of their contracts to Crushpad Bordeaux). Crushpad Bordeaux is offering a guarantee from the Cazes family that all wines will be made to completion and delivered to clients who switch over.
"This gives clients a chance to avoid the restructuring problems that are likely to occur over the next year at the U.S operation. Then if they decide to stay with us, great. But I don't feel we're competing with the U.S. operation. Rather, it's a complementary offer," said Bolger.
In a perfect world, the U.S. operation will restructure effectively and clients will receive the products they made and paid for. In the meantime, Bordeaux is a region looking for ways to draw in interest from American consumers who have become jaded with the region's high-priced offerings. With Crushpad Bordeaux seemingly on good footing and backed by the well-respected Cazes family, it just may have found one way to do that.
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