Business booms for custom crush wineries in Sonoma County
Wearing his Bermuda shorts and a T-shirt,with a San Francisco Giants cap tucked snugly around his head, Brian Kobler freely admits that he doesn’t represent the glamour of the wine industry.
Kobler’s work within the last month has been hectic and decidedly more blue-collar as he braved the mid 90-degree heat bearing down in the back of a nondescript Healdsburg industrial park: driving a forklift, hooking up hoses and installing machines that will crush grapes and ferment their juice into wine.
But the eventual payoff could be significant as his Healdsburg Custom Crush plant will begin crushing grapes this week, the first of a projected 250 tons that it will process in its first year. He already has 233 tons reserved. The company’s first crush is remarkable, given Kobler hatched his business plan in April and took keys to the plant on July 1.
With an average-sized crop at a minimum predicted this year, Kobler said he believes he and his three investors are on track to be in the black within three to five years. That would fulfill an inspiration to go into business for himself after watching a program on the History Channel a few years ago about the gold rush.
“It wasn’t the gold miners who got rich, it was Levi Strauss and the people who provided the service; the people who didn’t mind taking a back seat to the more glamorous job,” Kobler said.
That sentiment has spread throughout the North Coast this harvest season as the custom-crush industry has greatly expanded in the past year. The plants vary, but essentially provide one-stop service for vintners to crush grapes, make wine and transfer it into barrels and then into bottles — everything except marketing and sales.
For example, Rack & Riddle Custom Wine Services earlier this month opened its new 67,000-square-foot facility in Healdsburg, complementing its other location in Geyersville. Red Custom Crush is expected to begin operations this week in Healdsburg. And The Wine Foundry in Sonoma last month purchased Juice Box in Napa and moved its operations to the new location.
“Certainly in the last couple of years there has been a lot more activity,” said Justin Lattanzio, who opened up Vinify Wine Services in Santa Rosa in 2007, catering to boutique wineries.
The activity mirrors the growth in the overall wine industry, especially after two large Sonoma and Napa crops in 2012 and 2013 that produced surpluses. In addition, a rebounding economy has attracted more business, from first-timers looking to break into the highly competitive industry to established wineries that are stretched to capacity.
The economics of the custom-crush market makes sense for the clients who want to spend their money on sales — where they can get a greater return — rather than tie up their capital in production equipment and buildings. “It’s very expensive to run a winery,” said Rob McMillan, executive vice president of Silicon Valley Bank’s wine division.
It also applies no matter the scale. For example, a small investor could get 300 cases of wine with about a $20,000 initial investment, using a custom-crush facility and working with a vineyard management company for sourcing.
Contrast that figure to the estimated $5 million to $25 million that it would take to buy or ramp up a full-scale winery. The math has led many people to try to get into the wine business, especially those in lucrative industries such as technology and financial services.