|Wednesday February 7, 2001
Many thoughts have gone through my mind in the last two weeks. I have been trying to decide how to present them.
I must start with Brendan's great impending article that will appear in WINE X. We have been fortunate (with my great persistence) to have a pre-release. You will find it on our site. I must make a few comments regarding Brendan's thorough research. Since it has taken a year for this article to appear (not to mention that I wrote a prior letter to "Wine Business Monthly" awhile back), there has been a few developments that could change some of his conclusions. He was not nearly extreme enough. The price of barrels have come down and even the price of grapes has started to subside, but that has not stopped wineries such as Opus One ($140 per bottle) from continuing to raise prices. I must admit I like young cabs, but there is so much competition out there that I can find good quality at less prices. The problem we have is that all vineyards are different. A winemaker can influence the wine from these different vineyards in his own way. So, what makes wines so fascinating is that they can never be duplicated. Even Gallo has trouble duplicating there jug wines from year to year. Also all vintages are vastly different. That makes wine unique. If someone wants to buy a unique wine and pay high prices so be it. But as I have said before I am not going to be the owner who rip's off the public.
Brad has prompted me to display along side Brendan's figures, what I though were my costs to make a bottle of our wine. I thought hard to come up with these figures and had to fudge the last figure to come up with $10 a bottle. I must admit that these costs of producing a bottle of our wine does not include any of our living expenses. Two teenage daughters do require a good deal of money, but our debt service of $50,000 a year must be considered also. Our new building is also costing us a good deal of money. None of these calculations appear in my figures. But except for my interest in Audio and video I don't spend a great deal of money on such things as "wine, women and cars". I got all three of those things out of my system in my 20's.
I know you all want to know if I am making any money since we sell wine through our Futures program at such low prices. The answer is, not really. With all the improvements and new equipment we have to buy every year, I am breaking even. Some of the reason we are breaking even is that the IRS requires us to pay taxes on our income, but makes us deduct the prices of our improvements over as much as 40 years (at least I hope Kate and Susie can take advantage of some of these deductions after I am gone-I'll have to look into that). The great thing about my business is, even though I may not be saving any money yet, I am spending all the money I want.
I also have to mention that there are a couple of recent messages posted to our public forum. As you know I don't like to talk about my wine so it is great when some of you put yourself on the line. I also have to let you know that my friends Lou and Susan Preston have decided to lower their production to 5000 cases so that they can smell the roses again. Their winery did produce up to 20,000 cases that required Lou to travel a lot. Now Lou will have bread available on a regular basis. I am happy for him for I know he would rather be small than occupy United's seat 31C, as he mentions in his note to us.
| Read | Diary |
Forum | Tell
Us What You Think of Our Diary! | Last Week
| Next Week