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56 WINES&VINES August 2015 BARRELS Assessing the variables Let's take a closer look at the 12 variables (see "Barrel Cost Calculator for Oak") before plug- ging them into our final spreadsheet. Chateau Bigteaux's owners, who are carefully consider- ing producing a reserve version of their current Chardonnay, would like to know the per-bottle cost differential if they use French oak instead of less expensive American oak. This knowl- edge will aid them in determining the viability of their "Reserve" wine proposal. Of course, your costs at "Chateau Your Winery" will differ according to local econom- ics and a host of management and winemak- ing decisions. The author is an eastern winemaker, and the numbers used in generat- ing this article are pulled from actual practices that are not universal, but widely practiced in his region. 1 Cost of barrels Bigteaux's owners sifted through some re- cent invoices to arrive at a reasonable dollar figure for both French and American oak bar- rels. After adding in the cost of trucking the barrels to their winery, the delivered cost per barrel was: 60-gallon American oak $395 Shipping per barrel $45 TOTAL $440 60-gallon French oak $900 Shipping per barrel $50 TOTAL $950 2 Barrel size The size of the barrel is important not only because it dictates how many finished bottles of wine the barrel's cost is amortized over, but also the amount of evaporative loss to expect. Bigteaux's winemaker prefers the standard 60-gallon (228-liter) size. This size yields 304 standard-size (750ml) bottles. 3 Number of fills Obviously a winery that uses 100% new oak every vintage is going to have greater per- bottle barrel costs than a winery using the same barrels for eight fills. Bigteaux's winemaker plans to use his barrels for seven fills before turning them out to pasture. In this case, one barrel will contain 420 gallons (2,120 bottles) of wine during its life span. 4 Duration of each fill The duration of each fill impacts a number of important cost factors—namely, the amount of evaporative loss, the labor costs associated with barrel topping and the cost associated with the depreciation of space within your facility. Bigteaux uses an 11-month barrel- aging regimen. 5 Interval between emptying and filling The interval between fills as a cost factor may not be immediately obvious. Barrel space within a winery, like any other building space, costs money. The content of the barrels, whether air or wine, doesn't matter, as the barrel still needs shelter, and that contributes to cost. Filled time and empty time together make up one full cycle of the barrel. At Chateau Bigteaux, the barrels are idle for 1 month be- tween emptying and filling. 6 Annual evaporative loss The amount of loss due to evaporation should be accounted for as a contributor to the cost of barrel aging. If the same wine was aged in stainless steel tanks rather than wooden barrels, at least in Chateau Bigteaux's experi- ence, the volume drawn out is pretty close to what was put in. The same cannot be said of barrels. The amount of topping wine a barrel requires during aging depends on the size of the barrel, humidity of the barrel room and the length of aging. Because Chateau Bigteaux is blessed with very cold winters, the air in their barrel room is extremely dry for a significant portion of the year. This creates a fairly evaporative environ- ment. Humidification would cut their topping wine volumes, but Bigteaux's winemaker be- lieves that the concentration effect they experi- ence is important to the development of their wines. At Bigteaux, they experience a loss of about 10%, (6 gallons per barrel) per year. More moderate climates or humidified bar- rel rooms should reduce evaporative losses to perhaps 2%-5%. 7 Labor per fill cycle There is significant labor involved with maintaining wine in barrels. Maintenance tasks include filling, topping, sulfuring, emptying and cleaning. Chateau Bigteaux estimates the time spent maintaining each barrel at about one hour per year. Combined with hourly labor costs, wineries can calculate manpower costs of their barrel program and enter that as a part of their analysis. 8 Labor costs per hour Chateau Bigteaux's cellar labor costs, in- cluding benefits, are about $25 per hour. Combined with "labor fill cycle" above, they have a reasonable idea what maintaining each barrel costs. BARREL COST CALCULATOR FOR OAK Category American Oak French Oak Cost of barrel (incl. shipping) $440 $950 Barrel size (gallons) 60 60 Number of fills over life of barrel 7 7 Duration of fill (months) 11 11 Interval between emptying and filling (months) 1 1 Annual evaporative loss rate 10% 10% Labor hours per fill cycle 1 1 Labor costs per hour $25 $25 Space cost Depreciation per year $4,200 $4,200 Heating/cooling per year $800 $800 Number barrels in space 200 200 Finished bulk wine cost per gallon $18 $18 Barrel resale price at end of life $50 $50 Barrel depreciation cost/bottle $0.18 27.18% $0.43 46.30% Barrel labor cost/bottle $0.08 12.26% $0.08 9.04% Barrel space cost/bottle $0.08 12.26% $0.08 9.04% Topping wine cost/bottle $0.33 48.30% $0.33 35.62% Total barrel cost per 750ml bottle $0.68 100% $0.92 100% Go to winessandvines.com/barrelcalculator for a working version of this spreadsheet.