WW F&B Mtg_NA Wine Making

8/8/2019 WW F&B Mtg_NA Wine Making

1/22

Learnings from a Key North American

Winery

Millipore Food & Beverage Annual Meeting, July 2006, Molsheim


2/22

Corporate Overview

Worlds largest Winery* by both volume of wine produced and wine sales Estimated 20%WW market share

Worlds largest Brandy producer

Supplier: Concentrate

Crowns, Closures, Cases, Bottles, Labels

Neutraceutical & Vitamins

Crops (sweet potatoes, watermelons, grains, corn, etc)

Purchases a significant quantity of grapes from CA, AZ farmers based on 10-15year contracts

Owns and operates its own sales, warehousing and distribution networks acrossthe world. Self-owned distributors in 49 of 50 US states (NOT MASS!).

Real financials difficult to estimate


3/22

Brands

Gallo of Sonoma

Turning Leaf

Turning LeafCoastal Reserve

Carlo Rossi

Peter Vella

Boones Farm (Malt)

Bartles and Jaymes (Malt)

Burlwood

Ecco Domani

DaVinci

Marcelina Vineyards

Napa Valley Vineyards

Patriarch (Brandy)

E&J Brandy Lines (Brandy)

VSOP

VS

XO

Cognac

White Brandy Ballatore (Champagne)

McWilliams

Hanwood

Bridlewood

Louis M. Martini

Frei Brothers Reserve

Mirassou

Redwood Creek

Gallo Family Lines

Twin Valley

Single Vintage

Sonoma Reserve

Estate Series Anapamu

Gossamer Bay

E&J Cask & Cream (Spirit)

Caramel Temptation (Spirit)

Chocolate Temptation (Spirit) Indigo Hills Blanc de Blancs

(Champagne)

Winking Owl

Hornsby Draft & Ciders (Malt)

Rancho Zabaco

MacMurray Ranch

Indigo Hills

Black Swan

Whitehaven

Red Bicyclette

Cooperage by E&J Gallo

Night Train (Spirit)

Totts (Champagne)

Livingston Cellars Liberty Creek Wild Vines Bella Sera WilliamWycliff Barefoot Cellars Thunderbird (Spirit)

Andre (Champagne)


4/22

Operations Overview

Modesto

Central Coast, Northern CA

Central Valley

International Operations


5/22

Modesto Operations

Bottling Department 17 Bottling Production Lines

16 Filtration Skids

6 12-Round 30 Housings per Filtration Skid (3,456 10 elements)

Two Identical Sets of one 0.5-0.65 um Prefilterhousing followed by two 0.45 um finalfilter housings in series (redundant final filtration)

Flow rates range from 25 to 160 gpm Millipore filters (Bevigard M, Vitipore II Plus) used on high volume, high flow lines

Pall Ultipor used on lower flow, not as utilized lines

All production lines currently involved in 7 yr $100M Modesto renovation. Filtrationskids will be upgraded with more automation and proper sizing tied to flow rate andhistorical performance

Production Water Systems Filtered Hot and Cold CIP / RinseWater

8 12-Round 30 Housings

24-hour recirculating 180 F (82 C) hot water line uses Vitipore II, much longer servicelife than competitors, first Gallo process filters to switch over to Millipore.


6/22

Modesto Operations

Brandy Dept.

Three Brandy production lines, no membrane filtration

Wine Making / Process Technology Dept.

R&D /Winemaking specialty line, no membrane filtration Cellar Dept.

RO Units

8 Pall OenoFlow cross flow systems being installed to replace

existing pressure leaf (Est. $10+M project) No filtration at other Modesto facilities; Closures, Cases

& Labels, Glass


7/22

Central and Northern Coast Operations

Sonoma

One production line w/ microfiltration

Demo-ing Pall Crossflow in 2005 as replacement to plate and

frame

Martini

One current production line w/ microfiltration

Installation of second show production line underway

Bridlewood and Other Boutique

Mobile bottling Many mobile bottlers use Millipore


8/22

Central Valley Operations

Crush Facilities

Livingston Winery

Crushes 450,000 tons annually (~83.25 MG)

FresnoWinery Crushes 650,000 tons annually (~120.25 MG)

About to begin trialing Pall Crossflow as replacement to

12-16 pressure leaf filters


9/22


Other Facilities

GVI Vineyards, farming, waste treatment

PilotWinery Full sized winery for specialty winemaking/R&D

McCall Brandy High end brandy facility

Barefoot Cellars New purchase, production being moved toModesto

GrapeCo New acquisition, supplement concentrate

SJVC Primary concentrate facility


10/22


Neutraceutical & Extraction Facilities

Activin, antioxidant recovery from seeds/skins

Wine production of lesser quality, high demand products with

insufficient vineyard planting (i.e. Pinot Noir, White Zinfandel)

through extraction techniques (also to supplement low quality highvolume common white wines)

Tartaric Acid plant located at Livingston


11/22

International Operations

Partnerships with InternationalWineries

Some R&D, Engineering,Winemaking Support

Products are Marketed, Sold, Distributed as Gallo Products

Some are bottled in Modesto, some bottled at home winery

Italy Ecco Domani

DaVinci Bella Sera

France Red Bicyclette

Australia Black Swan

McWilliams / Hanwood

New Zealand Whitehaven

Chile Joint wine-making with one, future plans not announced


12/22

Process Flow

Fermentation Centrifuge

Final Blending &Stabilization

(or aging if high end)

Initial Blending

&

Stabilization

Rough DEFiltration

(Skip if high end)

Polish DE Filtration(Plate & Frame

Pad if high end)

Microfiltration

& Bottling


13/22

Process Flow


14/22

Detailed Modesto Operations

Filtration Skid Sanitation

Every product change requires changing to second filtration set. Old units are blown dry with N2, cold rinsed, hot water back-flushed, cold water

rinsed, integrity tested and sealed (a filter set could see 7-12 per week)

Certain product changes involve hot or cold water rinses of filler --

water sent through new filter set Full hot water sanitation (forward direction) performed on start-up, shut

down of line, periodic intervals for sensitive varietals

Monthly 1% NaOH caustic treating of fillers and piping Housings are bypassed

Tri-monthly caustic treating of lines, fillers, housings Filters are removed

All water is 0.45 um filtered, with ClO2 added at 50 ppm ClO2 tested as compatible with Durapore

Housings are sometimes filled with Divosan (used to use Oxonia) forweekend shut down


15/22


Plugged Housings

Units plug and second set is immediately put in-line

Less than 5 minutes back in production

Plugged units are N2 blown dry, cold water rinsed, hot water back-

flushed, cold water rinsed, integrity tested and sealed Filters are regenerated and re-used until (1) housing fails IT or (2)

pluggage occurs after < 2 hrs of production on a set w/o being

obviously faulty wine (typically the latter)

Product Issues

Difficult to filter products run through both sets of units in parallel toreduce per filter flowrate, throughput (ex. Hornsby, Sangria)

Most commonly plugged product is Champagne

Flavored wine (i.e.Wild Vines not wine coolers), difficult to filter


16/22


Filtration Considerations

All points in process have reclaim; manage which areas are

re-combined, refiltered at microfiltration skid, sent back to

tank farm

ClO2 has some flavor concerns with wine coolers

Citric Acid rinse used to mitigate

Pumps, filler feed valve radio controlled to filler operation to

control flow rates and water hammer

End of tanks closely monitored; no N2 blanketing leads toincreased dissolved O2, plugging due to microbial growth &

surface films


17/22


Filtration Considerations Cont

Perform DE filtration (clarification) at coldest possible temperature -

- cooling during final filtration can cause precipitates

Monitor filler overflow -- refiltration can lead to significantly lower

final throughputs

Frequently vent housings, particularly on carbonated products

Avoid product topping off or mixing after DE or rough filtration. Even

mixing same wine types & vintage can lead to interactions and

create precipitates

Wine makers have 0.65 um membrane available for high end

products. No rule for selection, wine maker decision. Estimate 1%

of bottling runs use 0.65 um.


18/22


In-Line Blending

Move away from large scale (600K) tank blending of malt-

based wine coolers

Combine feed streams just prior to filtration skid andcarbonate

Dry flavors added to RO water then mixed with malt alcohol, liquid

flavors, carbonated, SO2 added, filtered and cloud added

Preliminary tests showed no effect on filterability


19/22

Future Operational Plans

Family has Expressed Desire to Build Winery of the

Future

Combine Central Valley facilities

Current interest centered around R&D, high technologywinemaking not economically feasible given location and

existing capital constraints (have list of technologies)


20/22

Future Operational Plans

Many Renovation & Expansion Projects Underway

Ultra Low Cost Component Wine-making Initiatives

Use technology to beat out 2 buck chuck competitors

Water + recovered grape alcohol + pomace extractedflavor & aroma compounds = wine targeted at 30-50%

production costs of current bulk jug products


21/22

Future ofProducts

Ultra-low cost wines

Mid/High end range less common varietals

Increased US focus on marketed foreign wines

Malt wine cooler & wine based beverage sales have flat-lined in US; still

strong in South America, Asia Dessert wine (port, sherry) sales continue long time decreasing trend

Fight off pressures from China

25 % increase in Chinese wine production & winery capacity eachyear for past 4 years

Current products not considered acceptable to US tastes Low cost grape alcohol products

US regulations state alcohol used in wine, wine based spirits, brandy mustoriginate from grape fermentation; leads to Gallo dominance in these markets


22/22

Questions?

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