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When Cutting Volume Makes Financial Sense

Photo by: Greg Gorman

Posted: Jan 19, 2007 1:50pm ET

Given the choice, most wineries would prefer to keep their production figures top secret.

But we always reveal how many cases were made of each wine that we review, because we know you're interested in these numbers, and we are too.

Why is case production important? If a winery only produces 100 cases of a great wine, it’s going to be hard to find. If a winery can make 20,000 cases of an outstanding wine, that’s an accomplishment worth knowing about.

One way to analyze how a winery is performing is to keep an eye on volume, because an increase in production typically means a decrease in quality. That said, lower volume doesn't guarantee high quality wine.

A winery that makes 1,000 cases of great Cabernet, for example, will be hard-pressed to find the vineyards to double or triple production. It’s possible, but not easy. It’s also rare for a winery to publicize that it’s cutting volume, because that’s a tacit admission that it needs to regain its focus on quality, and that increasing volume has created more problems than it has solved.

An exception is Chalk Hill winery, in Sonoma County. The other day, the winery sent out a press release stating that it was cutting back on volume to enhance the quality of its wines. That should be good news, because in the past few vintages, I’ve noticed a precipitous decline in quality.

According to the release, the winery is eliminating marginal vineyards and focusing on the best grapes. Chardonnay production is being slashed by 50 percent, Sauvignon Blanc by 27 percent, Merlot by 78 percent and Pinot Gris by 45 percent.

These cutbacks may come at a steep price, since reducing volume also slashes revenue, but the winery apparently realizes that it has lost sight of its original mission—to make great wine.

John B Vlahos
Cupertino Ca. —  January 19, 2007 6:46pm ET
High volume good wine at reasonable prices is acceptable; its the average wine at high prices that's not acceptable, regardless of the volume!
Matthew Segura
Pleasant Hill, Ca —  January 19, 2007 8:24pm ET
How is it that Bordeaux chateaus can have both large quantities and consistently high quality wine production?
Kirk R Grant
Ellsworth, ME —  January 19, 2007 8:46pm ET
I have to agree with John. I guess the real question is this. When the fame and ratings come to a small winery and they try to become a LARGE winery to meet the demands. Are they still on the same path they used to be? Or do they stay true to their base of operations and stick with the people that have been with them since the beginning?
Trevor Witt
Waterloo, Ontario, Canada —  January 22, 2007 10:11pm ET
JamesI agree that production quantities are great info...thanks for providing these figures. Interesting to note that wineries here are reducing quatities to improve quality. Very much like some of the Bordeaux chateaus during difficult years. I don't recall many wines like Insignia, Dominus, Caymus Select releasing reduced quantity info?

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