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!