Operating your own winery is expensive. The custom crush business model enables small wineries to solve this. Robert Morris, the founder of Grand Cru Custom Crush in Sonoma County, explains the benefits of the custom crush model, how it works, and how Grand Cru has changed the custom crush game.  

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Detailed Show Notes: 

Robert’s background

• A Mechanical engineer by training worked at HP
• Became partner at Copain Custom Crush (renamed Punchdown Cellars)
• 2016 - founded Grand Cru Custom Crush (“GCCC”)

Custom crush (“cc”) definition(s):

• Grower w/ extra grapes that are crushed into a finished product
• People who source grapes and have a private label
• Operate in a custom crush facility b/c operations are too small to have its own facility (where GCCC operates)

Custom crush vs. own winery

• High startup costs (location, permits, winery equipment)
• Winery equipment utilization is low - own facility ~10 days/year; cc - ~2.5 months
• High utilization requires a diverse client base (e.g., sparkling wines to big Napa Cabernets = spread out crush times)
• CC has expertise in maintaining winery equipment
• CC can do aggregated sourcing for winery supplies (e.g., argon, acid) but does not do sourcing for packaging (a more personal choice)
• CC has more knowledge sharing

GGCC

• Combines custom crush and hospitality space (differentiator)
• Has a strict set of procedures and protocols for operations

CC business models

• 1) A la carte - separate pricing for each operation (e.g., pressing, punchdowns, racking, etc.,)
• 2) Per ton fee, all-inclusive - covers everything from grape reception until bottling
• Crush fees - Sonoma - ~$2,700-3,300/ton (~$38-45/case); Napa costs 2x Sonoma
• GCCC fee ~$3,300/ton, including use of hospitality area
• Overvintaging - ~$300-400/ton extra
• Other fees/costs - winemaking (if using GCCC’s), filtration, bottling (believes hard to justify bottling line investment until ~100,000 cases)

Visitation

• Consistently busy Thursday-Monday
• Uses Tock to manage reservations - integrated into clients and GCCC websites
• Clients can hold events at the facility

CC trends

• CC market is still growing (e.g., Red Custom Crush keeps expanding), growth mainly on the larger production side
• Has seen overvintaging (where wines are aged in barrel over 1 year) increase from ~25-30% 10-15 years ago to ~70% now = takes up more floor space
• Sees wine conversion ~51-53 cases/ton for premium production vs. 60+ for lower quality (e.g., pressing harder)

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