|Wednesday April 3, 2002
I am sure most of you know we started offering our 2002 pre-harvest futures on Monday. I am pleased that we have sold about 300 cases already. This year, I reluctantly agreed with Brad (web designer) and Pat to JUST send out e-mails with a link to the offer on the web-site. We sent hard copies to those without e-mails. Last year we sent out a hard copy through the postal service to everyone. My thought is that if you have a hard copy it is harder to forget the offer, but if you get an e-mail you may not look at it OR will forget it easier. Time will tell, but now we are already seeing a fall off in orders. At $13.25 a bottle for Dry Creek Zin, I am not too worried since most zins are going for well over $20.
The very first indication of potential crop out in our vineyard appears to indicate that the crop level could be above average. Remember, what I have seen over the years is that when the crop is high the quality is also. I will have a better indication by next week.
There was a nice posting to our public forum today regarding my pricing of wine. I liked the letter, but I felt like I was back in college again taking accounting 101, economics 101 and especially marketing 101. Remember, I have a great dislike for the basics of marketing. I feel there is too much in it regarding sales promotion and advertising. I do not like to push my wines to consumers. Not everyone is into FUTURES. All I know is what I said last week: I am making money even at $13.25 a bottle. I have done some preliminary calculations on my income taxes for 2001 and I made a lot of money according to the IRS. By selling over 4400 cases of wine we grossed over $600,000. Our expenses were only $10 a bottle after all deductions, including mortgage interest, depreciation and all other costs connected to our vineyard and winery. That gives me a profit of over $200,000. Do some of you still think I should raise prices?
I think I am going to get off my soap box regarding my pricing. I will try not to mention this subject again. I get the sense that I am wasting my time. Some of you are thinking I am crazy for not taking advantage of my situation which is that: Dry Creek Zinfandel is selling for $30 a bottle on average. If I sold my Zinfandel for $30, I would have a profit of $20 a bottle or I would have to pay in taxes an additional $300,000 to the IRS, let alone what I would have to pay to the State of California. I am tired of talking about this subject. I give up.
There has been a lack of communication between me and Sally. Sally and Brian are two of my closest friends who are going to sell me some Bennett Valley Pinot Noir and Syrah. I understood that I was to get all their first crop this year. Sally just called and said that actually she had contracted the Syrah to someone else. You know how it is with friends: sometimes business deals are arranged too casually. We have sold over 30 cases of the 2002 Syrah already since Monday so I have had to remove it from our web-site. I did inform Sally that I will need at least a ton of Syrah (65 cases) to make sure we honor the wine sold. Sally also informed me that I will receive all the Pinot Noir which should include over two tons. I know I get myself in trouble by selling wine before the grapes are harvested. I must learn to use only my Estate grapes and stop buying fruit. Of course that way I will have control.
10:00 PM I know there probably is some confusion regarding my calculations last night. I said our costs are $10 a bottle and we sold wine at $14 a bottle, but the bottom line does not work out. Remember my life is an open book, so to set the record straight I will be more accurate for those of you who care. Last year we sold approximately 45,196 bottles (3766 cases) AND $623,153 gross OR $13.79 a bottle. We also sold grapes from our vineyard for about $26,000. Our costs are actually less than $10 a bottle yielding the amount of over $200,000 profit I mentioned yesterday. If any of you would like to e-mail me with more specific questions to detail, do not hesitate.
I know I have not commented on the taste of our wines for months, but I must comment tonight. As I have mentioned before, I taste mostly our younger wines. I rarely like to say what I think of my wines even though I taste them more than anyone else. I know that everyone perceives a wine differently and I should not influence you according to my tastes. BUT I feel I must mention that the 2000 Block 4 is showing much differently than two months ago. It seems to have more complexity than any of our wines at this time. I am not sure I will be greatly fond of it in the future, but now it has a unique character that I can't describe. I still like the 1999 Block 4 as much if not more, but it definitely does not show that complexity. If you have some 2000 let me know what you think. And if you need a bottle or two of it let me know. I aim to please.
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