Are Small Wineries Better? It’s Really about the Culture

A story with a certain narrative arc has captured the fancy of wine lovers. It is a tale of small, artisanal wineries grappling with their limited resources to harness the forces of nature and giving loving attention to each batch of wine in order the squeeze as much flavor as possible from their vineyards. It is, of course, a compelling theme and when the wines are good we get the frisson of moral virtue wedded to pleasure.

The story is true enough in particular cases but can we make a generalization that wines made by small-batch wineries are generally more interesting or of higher quality than wines made by larger firms?

A few weeks ago, Felicity Carter addressed this question with regard to environmental sustainability.

The hard truth about state-of-the-art sustainability systems is that they’re expensive, and it’s generally wealthier wineries that can afford them.
On the other side, there are still small, family-owned vineyards and wineries that are a long way from the bucolic ideal; struggling vignerons, whose lands are blighted from excess chemical use, because they need the yields. Or whose lack of manpower means that family members are exploited. Small can be beautiful — but it can be dysfunctional and ugly, too.

She mentions especially some co-ops in Europe that “kept people on the land” during hard times and use in-house viticulturalists to solve sustainability problems. She also mentions the wealthy refugees from the corporate world who invest heavily in sustainable farming and the research needed to improve practices.  As she points out, there is a world of difference between a business model that depends on shareholder profits and a business model that allows committed individuals to invest their wealth in a sustainable future.

Something similar can be said about wine quality.

Small batch winemaking has a variety of advantages over industrial winemaking. Small-batch winemaking can use only the best grapes without succumbing to the pressure to meet production goals by using inferior vineyard sites. Small-batch winemaking also enables the winemaker and her team to pay close attention to every vine and every barrel providing the kind of attention that can identify problems early and head them off. But it’s expensive to farm for that kind of quality. It’s expensive to hire the help to provide that attention to detail. And it’s expensive and time consuming to manage the logistics in the winery to maximize quality. Small wineries struggle to find a market for their wines and have trouble setting prices high enough to cover their costs. Many, many small wineries simply do not have the resources to make the wines they want to make.

By contrast, large profitable wineries do have those resources. And there is nothing  to prevent large wineries from pursuing higher quality projects if they have the commitment from management and ownership. The problem is they have few incentives to do so. Their small batch projects don’t contribute much to the bottom line and the incentives are aligned to cut corners on the winemaking and let the marketing department sell the wine.

Great winemaking is a labor of love. I suspect it’s easier to sustain love when you get mud on your boots and wine stains on your shirt. It’s more difficult, but not impossible, if you spend your days in meetings or on the phone. And each department in a bureaucracy has an incentive to seek measurable, quantifiable outcomes rather than nebulous goals like quality. It’s a gargantuan task to direct the culture of large firms toward higher quality and distinctiveness. Few manage to do it well.

Small isn’t always better, but in the wine business it tends to be because of the cultural imperatives of large organizations.