Bulk Wine, Bulk Savings

Situation

  • A global wine company had a safety net inventory of bulk wine from previous seasons.
  • The client needed to decide whether they should sell off their inventory or continue to store it to make sure that they would not be short on supply for the 2018 vintage.
  • If the 2018 vintage would end up being a low yielding season, like 2017, the client would be happy to have the extra supply, but if the 2018 season would be high yielding, the client would be over supplied, causing both logistic and inventory value issues.

Solution

  • The client used Trellis to integrate their extensive and diverse vineyard data spanning the state of California.
  • Leveraging Trellis’ AI-powered early season forecasts, by February the client was already able to observe that many of their block and appellation-level yields were predicted to be about 20% larger than their 5-year average.
  • Based on the Trellis prediction, the client decided to boldly sell 50,000 gallons of bulk wine from 3 different varieties, 4 months before the 2018 harvest began.

Result

  • The 2018 vintage turned out to be one of the largest yielding seasons in the past 10 years, causing bulk wine prices to drop nearly 50% as the season progressed.
  • Had the client not sold their stocked bulk wine when they did, the winery would have run into storage capacity issues, forcing the winery to sell their bulk wine at an avg. of $8 less a gallon.
  • They winery was able to run a more logistically efficient harvest and saved more than $300,000 by selling their bulk wine inventory early in the season.

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