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Is “Wine on Tap” a More Sustainable, Drinkable Alternative?

Presidio Economics | Tuesday May 22nd, 2012 | 11 Comments

Presidio Graduate School’s Macroeconomics course for Spring 2012, is authoring a series of articles. The articles on this “micro-blog” reflect reactions and thoughts on news items, economic theory, and other issues as they pertain to the concept of sustainability.  Follow along here.

By Marlena John

An innovation in wine drinking is emerging in California restaurants:  wine on tap.  Wine served from a keg is not a new concept; it has a long-standing history in Europe.  But here in the United States, wine on tap has been brought to the market and failed – more than once; first in the 1970s, then twice again in the 1980s.  This time, however, the concept is sticking; wine kegs are opening up a new market for wineries and rejuvenating the wine industry.  Kegged wine has multiple advantages for both the restaurant and the winery.  These advantages are environmental, quality related, and economic.

Environmentally, the benefits of kegging wine are clear.  The bottling process is extremely resource intensive and includes bottles, corks, foils, labels, boxes and pallets.  Kegs eliminate tons of packaging, and are reusable for 20+ years.  Each standard sized, 19.5L keg, holds 26 bottles worth of wine.  Also, wines sold by the glass account for up to 80% of wine sold in restaurants, which equates to approximately 600 million bottles per year.  If 10% of that was served from a keg, that would save 60 million bottles yearly.  Since only about 27% of glass is recovered for recycling, this would divert millions of bottles from landfills.  Furthermore, kegs lessen transported wine’s weight, which accounts for one-third to one-half of the industry’s transportation carbon emissions.

Kegs keep wine tasting like it should.  When a keg is tapped, the contents become pressurized by an inert gas, which prevents oxygen from ever touching the wine, and therefore eliminates the waste that comes with serving wines by the glass.  And since the wine is served at a consistent level of ideal quality, wine on tap safeguards the promise of restaurants and wineries having more faithful, repeat customers.

Economically, kegging wine makes sense, too.  Bottling is extremely costly, as all the resources required in the process must be purchased and are used only once.  Kegs result in savings of about 25–30% for wineries when compared to the equivalent amount of wine in bottles.  Restaurants that serve wine on tap can enjoy 25% higher profit margins than selling wine by the glass from bottles.  Due to wastes being eliminated with kegged wine, restaurants can capitalize on even higher profit margins by offering more respectable, higher-end wines by the glass.  

There have been many hurdles to the success of wine on tap, but many have now been overcome.  One such hurdle is the negative perception consumers once had of wine from a keg.  But as better-known wineries adopt the practice of kegging their wines, such as Au Bon Climat and Qupé, two highly respected wineries in the industry, the wine drinking public is realizing wine in a keg does not mean low quality.  And certainly, not all wines are candidates for being kegged, such as those that benefit from aging in a bottle, so bottles will not be replaced anytime soon.  But wines that are packaged when ready to drink are perfect candidates, and these represent about 90% of all wines produced.  So the next time you go out to eat, and you see wine on tap being served, don’t shy away.  Take advantage of the quality, economical, and environmental benefits wine on tap provides.  Cheers!

 


▼▼▼      11 Comments     ▼▼▼

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  • http://www.facebook.com/people/Jennifer-Kaplan/890715122 Jennifer Kaplan

    Great post!  Keg wine in restaurants is typically high quality and a tasty, sustainable alternative.  Thanks for sharing the data.

  • Peter Rosback

    We kegged wine for a while for all the good reasons Marlena details.  What stopped us was the long delay in having the kegs returned once emptied.  If an efficient system could be developed to deal with that problem, we’d love to do it again.

    Peter Rosback
    ———————
    Sineann

    • Daniel Krichevsky

      An empty keg can be shipped back by fedex or ups ground with out any special requirements. One option we have used is sending our kegs with a return shipping label so it comes straight to the winery.

      • http://www.grapegroupinc.com/ Michael

        New on the Eastcoast NY tri-state area wine in kegs from Grape Group Inc.  Great wines and regular distribusion system.  Any interest in the tri-state area please call Michael Williams 631-793-1091

    • Marlena John

      Thanks for the insightful comment, Peter.  I would be interested to hear more about the experience you had kegging wine.  I’m writing another article this summer about the subject, and would like to interview several people (at wineries, restaurants, and consumers) who are both for and against it.  If you’re up for a short conversation, shoot me an email and we can set something up. 
      Cheers!
      Marlena
      marlena.john@gmail.com

    • Jack crowley

       Peter, We have a system that is a fine alternative for people that want to be involved with wine on tap. 

      Jack Crowley
      978-921-4661
      CrowleyDJ@comcast.net

  • http://www.micromatic.com/ Caitlin

    Wine on tap is poised to change the wine industry as we know it! It’s great for:
    – wineries: cost effective and environmental
    – restaurants/bars: easier serving, higher profit margins
    – consumers: fresher taste, more variety by the glass, cheaper prices

  • Jim Silver

    My last Macro Economics class was in the mid 1980s so what
    do I know?  But I do know something about
    the wine business, but like a lot of these articles on this subject the dissent is hardly ever heard from.

    Why did kegged wine fail in the 70s and twice in the
    80s?  I’d like to know.  What’s your guess?  Where you there?  I was.  The wine was disgusting.  Absolutely disgusting.  Do you realize the sorbate and sulfite issues that must be addressed by kegging wines?  Where is the discussion of chemical stability of kegged wines?

    While it’s true that kegs eliminate tons of packaging and
    can last for 20 years, the point not discussed is how the keg gets moved,
    cleaned, returned, and refilled.  The
    water and fuel consumed by this process is not recognized.  It is important to realize that if a
    restaurant in NY consumes a keg of CA wine, that keg must be shipped 3000 miles
    east full, and 3000 miles west empty to be refilled.  This does not ignore local wine kegged, and
    consumed locally, which must also travel and use water and chemical to be
    prepared to be reused.

    “Kegs keep wine tasting
    like it should.  When a keg is tapped, the contents become pressurized by
    an inert gas, which prevents oxygen from ever touching the wine, and therefore
    eliminates the waste that comes with serving wines by the glass.”  Ms. John, I hope, isn’t simply regurgitating
    the same claptrap we get from keg wine companies, but I have my fears.  Inert gas comes from somewhere and also must
    travel and be delivered.  Waste from
    serving wines by the glass?  This simply doesn’t exist to the level she would have you believe – only poorly run
    beverage programs suffer excessive waste. 
    Can you imagine a wine only sold once or twice every few days?  Does anybody think this is ridiculous?  If you don’t, what kind of restaurants are
    you frequenting anyway?

    Then to bring a baseless
    conclusion like “faithful, repeat customers” are swarming to restaurants that
    use kegged wines is simply bizarre. 

    “Bottling is extremely
    costly,” says Ms. John.  Compared to what
    exactly?  Can you fathom the idea of
    wines that never get a chance to age long term – never get a chance to be aerated – never develop secondary aromas?  Oh what a
    beautiful future the wine world can look forward to!  A better title for this piece would be “I
    Love Generic, Souless Wine, and Here’s How You Make Them.”

    If 90% of wines are “ready
    to drink” and thus “perfect candidates” for kegging, then these are exactly the
    wines that will NOT advance the wine industry; will NOT advance the marketing
    efforts of good wineries; and will NEVER produce good will for that winery. The very notion that ABC
    and Qupe, both of whom I adore, would reap benefits of repeat sales, or new
    customers from selling “ready to drink” wines on tap is nonsense.  Utter nonsense – this is not their audience…  A massive problem is marketing:  Do not assume the customer will pay attention
    to what is on tap when s/he orders a Chardonnay by the glass.  We cannot assume the label is available to be
    shown, or the bottle available to be viewed, or the wine to be repurchased in
    the wine shop nearby.  We cannot assume the restaurant is offering what is advertised, nor can we assume the server (all of whom are beyond reproach) is telling you exactly what you are drinking with any accuracy.  Would the average consumer remember anyway?  Could they find that wine if they did?

    Economically, the kegged
    wine is a hit of crack to a winery suffering a withdrawal.  It is over very quickly, and leads to more
    and more kegs – leaving the soul of the winery (terroir, low yields, single vineyards, style, etc.)
    behind.  It is a poor substitute for
    quality marketing, period.  And frankly, lazy.

    I wish my collegues in the
    wine production end of the business would realize that for the sake of a few
    ecologically responsible seconds they are leaving their longevity on the
    table.  This is very seriously poorly thought out and very seriously irresponsible in the grand scheme of things.

    Before you condemn me as a
    naysayer, just THINK for a second.  Think
    what the success of kegged wine does for the wine business…does every glass of
    wine consumed in a restaurant in 2025 have to suck?  It will…I promise you it will.    Do you think every restaurant is just dying to give you the benefit of the “cost-savings” on kegged wine?  Really?

    • Steve Sutton

      Have you had the ABC Pinot or Qupe Granache or Syrah in the keg and tasted it against the bottle at a restaurant or wine bar that has the proper wine keg set up using a system designed for wine? I have alongside Qupe’s winemaker. I can assure you 2025 will be just fine.

      Micro Matics website on their wine product will do a lot to answer your questions on what is different from 10 years ago. Mainly they used beer lines in the past that oxidized.

      Jim Niel of N2 wines has written many pieces on the proper cleaning and filling of kegs. Not to mention he does an amazing Chard only available in keg.

      As a wine shop operator who has both keg and bottle wine I can assure you that it does expand a wineries market share. People want to buy and take home what they like. And consumers do ask and remember what is on tap just like they have for years with craft beers.

      While your concerns are valid its you ignore that quality is priority for the success of kegged wine and anyone who invest ttime and effort in it out that at the forefront. Right now the biggest barrier is simple the infrastructure required in supplying kegs. However with growth that too will fall away as it did in the beer industry.

    • Joshua Camp

      Breathable lines tainted the wines in the 70’s and 80’s. Today’s systems allow no air to enter the wine that sits in the lines over night or for days. This has not been largely discussed, but it is true.

      Kegs are also more sustainable – refilling and cleaning? Are you serious? Think about the waste of a truck full of bottles that were manufactured, shipped, filled, shipped, recycled, thrown away, etc. and then think about what you said about fuel costs. Your logic is severely flawed. If you think a keg is heavier than the number of bottles it replaces, you may have already drank one too many glasses of the cheap stuff.

      The shipment distance is the same, the weight lower, and cleaning kegs is far more sustainable than recycling glass bottles.

  • http://www.facebook.com/profile.php?id=645246795 Kathleen Mccarthy

    i bought these containers at walmart,that have spouts on them,and when i made my wine in 3 gallon buckets i later transfered the wine to these plastic containers with spouts(tap) ,and keep cool in my fridge,its so easy to just open fridge,put my wine glass to one of the 2 containers taps,of diffrent wine ive made!!