Thorns and Roses – A Look Back at 2021
If I am a little late in writing my annual ‘look back’ at the previous year, it’s because it was often difficult to distinguish between what was a thorn and what was a rose in 2021. Take the lockdown – is the fact that Sidewinder was closed for half of the year a thorn (465 days of lockdown ended on June 17) or the fact that we were able survive to reopen a rose? I like to think of it as a rose.
The same confusion also can be found in the supply chain disruptions. Disruptions in the supply chain impacted labels, bottles, capsules, corks, barrels – a myriad of items we expect quick delivery on. Orders for bottles placed in late summer for December and January bottling arrived in February of this year. Spirit bottles ordered in November of 2020 only arrived in late summer last year. And capsules used to finish our bottles had to be airlifted from Europe to avoid month long delays in the ports – a 400% increase in the costs!
All of these would be considered thorns in most years, but they are also roses. The supply chain crisis helped forge stronger bonds with our suppliers as we worked together to develop packaging alternatives that will make us stronger and less prone to disruption going forward.
Fruit shortages continued into 2021. After a disastrous fire year in 2020, this past year saw the vineyards come back with exceptional fruit – but with lower yields. In our case, we saw fruit prices increase as much as 40% over 2020 – and you were lucky to get fruit at all! An scare occurred when we went to pick our Sauvignon Blanc and ended up with no fruit – the vineyard yields were too low to support a big out of town buyer. Quick action by our neighbor, Rosa Fierro Cellars, put us in contact with an Alexander Valley grower. We were able to harvest three tons of the finest Sauvignon Blanc we have ever seen.
So, a thorn in not finding local Sauvignon Blanc led us to an exceptional vineyard in Alexander Valley – and also reminded us of how the winegrowing community in Livermore Valley shows solidarity in times of crisis. Definitely roses.
Price increases across all segments of our business impacted our margins this year. Costs of goods like fruit, bottles, labels, and capsules increased by 10 – 30% this year. Expenses like rent, utilities, insurance, and government fees and regulations also showed sharp rises from the year previous. Clearly, wine prices will have to reflect these price increases in future releases (thorn). However – there will not be any increases in the price of our previous vintages (rose).
All of the disruptions have provided the incentive to rethink our business practices going forward. We are getting more innovative from a business perspective and, more importantly, from a winemaking perspective. In retrospect, I think that the roses won in 2021.
Look forward to some fun new wines in our future.
