The custom winemaking facility Crushpad Bordeaux is reassuring its clients that they will not be affected by the financial turmoil surrounding California’s Crushpad Inc., which launched its French division in 2009.
Crushpad's Sonoma facility is today selling its assets in a single lot to the highest bidder in San Francisco. On the eve of the auction, Stephen Bolger, president of Crushpad Bordeaux, was keen to point out the gulf between his French operation and the ailing Californian business.
Although the two businesses, which allow customers to make their own barrels of wine, currently share a website and a name, that is about to change. It was in April 2012 that the Cazes family, owners of Château Lynch-Bages and Ormes de Pez, purchased Crushpad Bordeaux in “an all-out acquisition.” Its name will be switched to an alternative “as soon as possible – within the next month or so,” said Bolger. The new name has yet to be decided. The French business is already operating an alternate website, makebordeauxwine.com, for its clients.
Media reports suggest that those who made wine at Crushpad's Sonoma facility may never see their wines again. Bolger, however, has assured clients in two emails sighted by Wine-Searcher that the independent French business guarantees delivery of their wines.
Bolger told Wine-Searcher: “The 2009 [Bordeaux] wines were shipped to the United States under a license belonging to Crushpad Inc., but the owners of the wines are the individuals who actually produced the wines. They went into a warehouse in Sonoma and they are under the names of the individuals. So, those wines are unimpacted by the litigation and anything that might come out of liquidation. Our clients are protected."
In 2007, Bolger joined Crushpad Inc. to set up the Bordeaux operation for the Californians. Two years later clients had their first vintage. “From my perspective, I knew that Crushpad in the United States was not in a position to support our growth from a financial perspective, because they had too many difficulties in terms of their own business model and financing,” said Bolger. This “accelerated discussions” between Crushpad Inc. and the Cazes family.
Bolger believes that under Cazes ownership, the Bordeaux operation will succeed where the Sonoma business failed. Cutting unnecessary costs and excess inventory are priorities for Crushpad Bordeaux, but its clientele is also key to its success.
While 80 percent of the clients of the Bordeaux facility are private individuals, Sonoma clients tended to be small winemakers, aiming to sell their wines at high prices, Bolger claimed.
“Crushpad was doing very well from 2004 to 2008 when it was growing at an average of 110 percent a year. Then what happened in 2008? Huge economic meltdown. So, all these people that had the intent to sell a high-end wine easily in a market that was willing to sustain $100 to $120 bottles of wine – all that disappeared."
In Bolger's opinion, “From 2008 to 2011 all these clients stopped producing a wine, when Crushpad had invested a lot of money in what they had anticipated to be continued growth."
Additionally, the American operation was way too complex in Bolger’s view. “Every single client wine is made in a 300- to 700-liter bin, so at any time during harvest you’ll find three, four or 500 different bins each with a different wine plan, which is challenging from an operational and a cost perspective.”
In contrast, the Bordeaux operation is less fragmented, not personalizing wines until the maturation stage. “Our wines are produced on a vineyard basis not a client basis, and the wines only become the client wines once they are pressed and go into the individual barrels,” Bolger said.
There are other differences. In America, many growers sell fruit to wineries and do not make wine. “If you decide to contract for a parcel, you have to take the entire parcel regardless of whether you sell it or not,” said Bolger. The French operation, on the other hand, buys the fruit it needs and no more, as it works with estates that grow grapes and make their own wine.
“If we only need half or quarter of the parcel, we can take that as long as we give the growers – who are also producers – two weeks’ notice before harvest," explained Bolger. "They’ll take the rest of the fruit and continue to make their own wine as they always have, so we are not left holding huge amounts of inventory [as] the United States would have.”
Back in San Francisco, Tuesday's job-lot sale includes wines and winemaking equipment as well as the company’s trademarks and patents, the Press Democrat reported. It is estimated that around 500 clients with more than 900 barrels of wine will be impacted by the sale. As of today Crushpad's website makes no mention of either the fire sale or its financial predicament.