Home Featured Your Wine is Getting More Expensive — The Supply Chain Has Something to Do with That.

Your Wine is Getting More Expensive — The Supply Chain Has Something to Do with That.

Your Wine is Getting More Expensive — The Supply Chain Has Something to Do with That.

“Supply chain” is a newly adopted buzzword in our vocabulary these days. From manufacturing to food services, several industries have been disrupted by supply chain issues from the pandemic, including the wine industry.

According to a Silicon Valley Bank (SVB) Annual Winery Conditions Survey, 93% of those, from the wine industry,  who were surveyed had difficulty sourcing supplies–with glass being an issue for 76% of survey respondents in 2021.

“I think what happened is the supply chain issues that were hitting every other industry in 2020 took an extra year to catch up to the wine industry,” said Megan Bell, owner and winemaker of Margins Wine. “We really felt it in 2021 and that’s because everything we do takes at least a year. We make the wine one year and between 6-18 months later, we’re trying to bottle that wine,” she added.

Bell is based in Santa Cruz County and started her company, Margins Wine, in 2016. Bell says she typically bottles her wine twice a year – in February and July. This year, she wasn’t able to get the glass bottles she needed in time, leading to an extra bottling day in April and a third wine release. The price for those glass bottles also went up–by a lot.

“What I did differently is, the glass I’m getting is coming from Quebec instead of China. That really cut down on the tariff cost. The shipping is still crazy, it’s like 5-thousand dollars or something. The shipping I used to pay was like $400, no exaggeration. So that’s gone up a ton,” said Bell.

In addition to shipping, her glass bottle supplier of the last six years doubled the cost of her glass bottles to $50,000. Bell emailed 10 other glass suppliers and found her aforementioned supplier in Quebec. This year, she’ll pay between $35,000-$40,000 for glass bottles, compared to her normal price of $25,000.

Hundreds of miles south of Margins Wine, in Tecate, Noel Tellez also experienced a less-than-normal year as owner and winemaker of Bichi Winery. Tellez found that many of his products coming from Europe and China were arriving late and he noticed a price hike in bottles and containers. Luckily, Tellez didn’t have an issue with glass bottles.

“Everything is a cycle. You produce the wine, wine goes to tanks, from tanks it goes to bottles, then it ships. If one of the stations is broken, you have to keep the wines in tanks but then you can’t receive more grapes because you have no space,” said Tellez.

With these supply chain issues, what options do winemakers have to get their products on time and at an affordable rate? One solution: reusing glass bottles.

Good Goods is working with 50 wine shops in New York to collect and wash empty wine bottles and return them back to the winemakers. Customers get a credit when they return the bottle to the store toward their next wine purchase.

“At Good Goods, we’re creating a consumer experience to help to track that packaging through the end of life. We can bring it back and then we can create the highest and best use for those resources, either the packaging and its current format, the materials that it’s made up of into the next best use,” said Zachary Lawless, Founder and CEO of Good Goods.

Good Goods started in the middle of the pandemic in August 2020 and the company is already expanding to Northern California (Sacramento, San Francisco, Napa area) early this year. Lawless says while big wine producers are still getting glass products, small producers aren’t. He hopes companies like his can level the playing field.

“When bottles are getting reused, it’s actually becoming more equitable towards the smaller producers because not only are they able to get access to reuse packaging, but also the more and more that those small producers can work together to come into standardized packaging, the more it reduces the cost for all those producers in which they can start to actually work with some of the volumes and opportunities these large producers are able to take care of,” said Lawless.

Megan Bell from Margins thinks reusing glass bottles, similar to a Good Goods approach, will happen in the future. But, at the moment, she says there is no infrastructure for other options. And, in the meantime, the extra costs that winemakers are facing is a cost that wine drinkers will face, too.

Bichi Wines already raised prices by 10% for their 2020 harvest. Bell is also anticipating an increase in prices for consumers but hopes customers can buy local when it comes to their next wine purchase.

“The more you can stay supporting those small wineries, even if it means a couple more dollars per bottle, that could be the difference between someone’s business failing or surviving,” Bell said.