Tapping into the market
As California-based company Free Flow Wines has found, stainless steel kegs not only maintain superior wine quality, they also help to minimise the cost of packaging and transportation, delivering cost and carbon footprint reductions for the whole industry
First introduced in the 17th century, the glass bottle and cork stopper has been synonymous with wine ever since. With glass being non-porous and impermeable, its ability to also provide purity of taste to the product contained within has made it the most universally recognised method for transporting and carrying wine. Nevertheless, for anyone familiar with the process of bottling wine will be able to attest, there are also drawbacks to glass, not least of all its weight, its fragility, and the risks of spoilage that arise from its opening, closing and storage.
Jordan Kivelstadt is one of many winemakers to have encountered such issues. In fact, it was a bad bottling experience that provided him with the inspiration for the creation of California-based Free Flow Wines. “I remember it was after one particularly bad bottling day that I turned to one of the topping kegs sitting nearby and thought to myself out loud, ‘why can’t I just sell wine in one of these?’,” explains the company’s Founder and CEO. “It was then that I started to think about all Jordan Kivelstadt the impracticalities that come with the market and that is why we glass bottling process, especially the act of serving wine by the glass from a are now working to double bottle. After all, for winemakers, there is nothing worse for us than seeing the first interaction between our end product and the consumer being ruined due to issues such as the wine being opened or stored incorrectly.”
It was also the timely rise in appreciation for craft beer on draught that made Jordan turn his focus to recreating this model with wine, devising in-house kegging line processes and procedures to ensure that wine gets from the barrel to the tap, tasting as the winemaker intended. The result of these early efforts was Silvertap Wines, the first nationally distributed wine on tap.
The real turnaround for the company, however, came when it pivoted its business model to become a packaging and logistics operation, leveraging its experience with wine on tap to allow other winemakers to enter into this space and expand the category. Today, Free Flow Wines’ fully automated kegging line cleans and fills around 225,000 kegs per year, creating numerous benefits for the entire wine supply chain, from wineries to operators, including restauranteurs, hoteliers and others in the hospitality sector.
“The biggest beneficiary, economically, of serving wine by the glass from the tap are undoubtedly the operators. They get to serve better quality wine, experience zero spoilage and thus make more money. Similarly, a good number of winemakers, particularly those in the premium category are experiencing cost savings by putting wine into kegs rather than bottles,” Jordan continues. There are also considerable environmental benefits to what Free Flow Wines is doing. Up to 70 per cent of the wine sector’s carbon footprint originates from packaging, and stainless steel kegs help to reduce this by as much as 96 per cent, which creates massive positive implications when it comes to the sustainability of the industry.
“In a relatively short span of time we have gone from filling a small volume of kegs for Silvertap to offering a full suite of keg filling, leasing and logistics services for wineries throughout the world, including offsite keg leasing, launching a bulk storage programme, and acquiring a draught installation and services company in northern California. We also successfully opened up our East Coast Filling Station in Bayonne, New Jersey, in 2017, which will help us to not only improve our logistical footprint and reduce costs for our customers, but also increase the number of imported wines from Europe and other non-domestic sources available in keg format,” states Vice President of Marketing & Customer Success, Heather Clauss, who has been with the company since it was only four employees strong.
“From the very beginning, we have led with service and quality at the core of everything we do,” Heather adds, when asked about the importance of keeping its customers intertwined in every decision it makes. “We always look to put our customers first, doing all we can to find solutions to the challenges they may encounter in order to make their lives easier. This has also helped define Free Flow Wines as an innovator within its field.”
This ability to innovate will play a crucial role in the company’s development during 2018, which Jordan believes can be the year that Free Flow Wines takes a further step towards getting to where it wants to be. “One of the big things we need to do in order to take this leap forward over the next 12 months is really hone in on helping our distributors to solve the challenges they face in adjusting to the change in demands on them when handling wine from kegs,” he describes. “In order to address this, we will be making a number of unique logistics plays to relieve some of the burden, and therefore incentivise our distribution partners to scale up alongside us.”
At the same time, from a production perspective, Jordan is very excited about the unique opportunity that the canning of wine presents. Though it represents a small segment of the overall wine category, it is one that is growing rapidly and the economics for wine in cans are compelling for wineries, what with cans being inexpensive as a form of packaging. “This is an area of the industry that is appealing more and more to a new generation of wine drinkers as it changes the dynamics of when and where people can enjoy wine,” he enthuses. “We believe that cans can fill a significant void in the market and that is why we are now working to double the capacity of our canning line at our Napa facility, ahead of a planned installation of high speed, fully automated line in the near future which will hopefully take us from a production capacity of 500,000 case per year to between five million and seven million cases per year.”
Such a significant increase in capacity forms one part of Free Flow Wines’ plan to restructure its infrastructure to better reflect the company that it is today, and will be in the future. Nevertheless, as Heather concludes, this expansion will be partnered with a desire to stay true to its core values; “We will ensure that we lead in the areas of quality, service and innovation, while also focusing on growing the category of wine on tap alongside our partners, which we strongly believe as being the future when it comes to wines served by the glass.”