Ramblings of the French Wine Business

I am in the car now, on a long journey to Southern France. I will use the time to ramble on about a number of things. Also, being a work trip, I thought I should talk a little bit about wine business here, the systems in place for grape growing and wine making, and how those factor into my visit here.

The winery I am working for is large. They own their own estate (you’ve seen the chateau) and have a small vineyard there in which they grown and make their “chateau” wine from.

As you’ve noticed, I’m sure, I haven’t said the name of the winery (negotiant) or the chateau for which I am working. I won’t. The company I work for is not simple-minded when it comes discussions of proprietary matters in the public domain. Besides, all of you reading this know where I am, who I am working for, and the “mother company” I’m speaking of.

They also produce a massive amount of wines from all over France. These wines range from 3 euros to 25 euros in price. By far, the 3-6 euro segment is the largest. These wines are purchased, as wine, and then blended to produce the bottles needed for these price points. This makes the winery I work for a “negociant,” not a winery, in fact.

The French Cave Cooperative:

The French wine business is much different than its American counterpart. Few people buy grapes, as the economic structure here doesn’t make that choice pencil out. Instead, wineries purchase wine to make their blends, instead of purchasing and making wines themselves – unless of course we’re talking of the French “chateau,” in which all the grapes are grown, made and sold by the chateau. When you hear chateau, think “estate.” They are roughly the same idea.

During the 1930’s winegrowers throughout France realized that making wine independently was far too expensive. If they could find a way to pool their money, build a winery and share the expenses associated with wine production they could make a lot more money off their crop. Ha! The co-op was born. A cooperative is a winery owned, at least in part these days, by the winegrowers making their wine there. Think of it as a credit union, but for wine production. Quite literally every small village in France has one. Some are old and antiquated, and staffed with old-school winemakers with little regard for current techniques or research (see below), and others are full of peak technology and studious winemakers. Not kidding: the bad ones feel like you are in the dark, stinky bowels of an old steam ship mid-way across the Atlantic. I have been sure, more than once, that I would turn a corner to see soot covered men shoveling pomace into a fruit-fly covered pit in much the same way they must have shoveled coal into the furnace to make the engines turn. The bad is very, very bad. Likewise, I have also seen co-ops with serious money to invest, who have exceptionally clean cellars and fantastically current equipment.

The co-ops are, as I said, run by growers. In fact, each one has a president and governing staff elected by the winegrowers of the area. Among other things, this insures that the co-op continually acts in the best interest of the local grape farmers. These elected officials hire whatever staff necessary to make the wines – be that winemakers, cellar staff, record keeping staff, etc. The winegrowers of the local areas farm their grapes and have the wines made at the co-op. When the wines are made, the co-op sells them (via a broker – a whole ‘nother topic) to the negociants that need to purchase them. Obviously, the less the production costs and the more the purchase price, the happier the wine grower. The president is in the position to feel out the market each year, and offer wines based on current demand.

The other strange thing here is that the negociants and the co-ops do not have any contractual obligations to one another. The co-ops will make their wines and, simply by a hand-shake, agree to sell them to the negociants when the time comes. Likewise, the negociants agree to take them when the time is right. At this point, there is no discussion of price NOTE: This is the time of year we’re in right now. We’ve traveled around, checked on quality, but have no idea how much these growers will ask for their wines when it comes time to exchange money for wine. Obviously, a problem occurs when this hand-shake deal doesn’t materialize. Often the negociant (usually not the co-op) will decide that quality is not what was expected, and will walk away from the deal. Obviously, this leaves the co-op in a bad position as they are now forced to find a means to dispose of thousands of hectoliters of wine. Yes, hectoliters – we’re not in the US, remember?

So -- From a winemaker’s perspective, I must say this system sounds TERRIBLE for wine quality. With no face-to-face relationship with the growers it must be extremely difficult to discuss and certainly demand increased quality. The joke is that the grape growers really don’t care about ripeness and harvest timing because they all want to be picked out before hunting season starts. This “joke,” like most, is funny because it’s true. Also, like growers in the US, they would rather pick when the grapes are plump – less ripe -- (and therefore heavier) than when they are desiccated – more ripe. In what has been a good move, the co-ops have started ranking wines each year, and, based on both their tastings and demands of the negociants, giving bonuses to the wine growers who produce the highest quality fruit. This move has, according to the negotiants, increased quality tremendously.

I must say, that I had this very romantic vision of what the wine industy in france would be like. Certainly, the chateau’s, fifth-growths up, and even some below are something to see, and the quality is like I’ve never experienced in the US, even in Napa. In fact, I have had 5th growths here that rival the best that Northern California has to offer. But, make no mistake about it, wine is big-business here. With big-business comes the duty to make a product at a cheap price, and there is certainly plenty of that here too. It’s been a bit of a reality check, for sure.

There are pictures to follow, but I can’t get to them now.

Stay well.
JB