The New York Cork Report: Wine on Tap

A Different Perspective on “Wine on Tap”: It’s Working. And is Growing.

By Mark Grimaldi, Director, Marketing and Events

The subject of wine on tap (WOT) has always been one for debate, especially here on the New York Cork Report. Having been involved with kegged wines since they first started to become commercial a few years ago, I am now even more a proponent, seeing just how successful it is becoming. 

Some still see it as a downfall for our industry, “cheapening” the way their product is portrayed to the consumer, like a “bag-in-a-box” would, but I believe that thinking is has dated itself, and the proof is right here in front of us.

I recently had the chance to talk with Charles Bieler of Gotham Project for a few hours as we got his custom kegged-wine dispenser all geared up for an event here on Long Island. He poured two wines that day: a North Fork red blend and North Fork chardonnay.

We talked for a while about the business and how things were going for him. What he said was astounding: Gotham Project cannot keep up with demand, not just locally, but nationally.

The industry is not catching up as fast on the production end as it is on the consumer end

Right now, Gotham is moving about 250 kegs a month in New York alone, mostly in Manhattan, Brooklyn and here on the East End of Long Island. And to put to bed the notion of these wines being “cheap,” many top restaurants and wine bars are going ahead with this format including Paul Greico’s Terroir wine bar, Colicchio & Sons, The High Line, Luce & Hawkins and Southfork Kitchen. Gotham Project also cannot keep up with the demand coming from distributors and restaurants in other states either.

Gotham Project is not the only company kegging local wine these days, either.

In New York alone, there are a number of wineries taking advantage of the market, including, Paumanok Vineyards, Shinn Estate Vineyards, Martha Clara Vineyards, Jamesport Vineyards, Raphael, Channing Daughters Winery, Hermann J. Wiemer, and even the tiny producer Heart & Hands Wine Company has done a custom blend for a local Finger Lakes restaurant in keg.

In my opinion, this is huge for New York wine. If these local wineries were not paying attention to this growing market’s demand, there would be a lot less New York wine in consumers’ glasses at top restaurants.

Look at it this way, the competition for a traditional out-of-bottle glass pour at a restaurant is extremely fierce. I know it is because I live with that competition daily in my line of work. If poured out of a bottle, would a Long Island chardonnay be poured by the glass on the High Line in NYC? Would a Finger Lakes riesling be poured by the glass in northern Westchester County? 

Maybe. You may say sure, a local wine most surely would be poured in New York, especially here on the East End.

But, now pretend you are a winemaker competing with the many other Long Island chardonnays, or Finger Lakes rieslings, or North Fork merlots out of a bottle, and your chances of having your wine by the glass at a restaurant is extremely limited.

This is where the wine-in-keg niche and differentiation comes into play. I think I can count on one hand the number of Long Island chardonnays being offered in keg. As a matter of fact, I think I can count on one hand which wineries offer each variety in keg around the state. There is a lot of opportunity here.

Kareem Massoud, winemaker for Paumanok vineyards and huge proponent of wine on tap (as well as screw caps and large-format bottles) has had great success with kegging his wines. He said, “In the last year alone we sold over 100 kegs of our wine to two local restaurants. One of which has taken about 70.”

That is the equivalent of 225 cases of wine in addition to their normal on- and off- premise sales. If you are a winemaker or running a winery, you have to be thinking to yourself that moving that much more wine out of your door is extremely attractive, no matter what it’s packaged in. Imagine the dollars being left on the table if you aren’t? Kareem has figured that on average as long as prices do not change and cost savings continues to be passed on to the customer, each keg will pay for itself when filled four times.

Some small wineries may not have enough wine to sacrifice their bottle sales for keg sales, but many who produce more wine do. Especially if you are a winery that produces so much wine that you have multiple vintages of the same wine for sale at any given time or hold back releasing current vintages until you sell through older ones.

Kareem added, “As a winemaker, I have a responsibility to make sure that our wines make it to the consumer in the same condition they were in when they left our winery. Wine in keg ensures that for me. I don’t worry about corked bottles, waste or freshness if it’s being poured by the glass. Factor in the financial and environmental benefits and it is the ultimate vessel for wine. When Southfork kitchen closed for a month because of their kitchen fire, I went back before their reopening to check on the wines, (they were pouring the chenin blanc at that time) and it was just as fresh after sitting for a month as it was when it left the winery. It was amazing.”

Luce & Hawkins restaurant in Jamesport has been pouring six different wines on tap since it’s inception in early 2010 including Gotham, Shinn, Wiemer Martha Clara, Paumanok and Jamesport. While they also offer an extensive glass pour list from bottle, the wine poured from keg has proved to be more popular than the wine poured from bottle. “We’ve found that the keg system not only allows us to cut way down on packaging waste, but also gives guests an opportunity to taste a greater variety of wines at a greater value while not worrying about cork taint or freshness issues”, says owner and chef Keith Luce.

And what about the future? Is this a fad? I don’t think so. Besides factoring it’s environmental, financial and spoilage benefits, we have not even “tapped” into a whole other beneficial market for wine on tap. Retail and “Wine to go”.

Just around the corner is the day that the SLA will loosen their grip on some of the ancient prohibition laws that prohibit kegged wine being sold both retail and in growlers or other “to-go” containers. We already see many “filling stations” for beer throughout the state, including supermarkets like Whole Foods and many retail beer distributors. Very soon we will be able to fill growlers of local wine or pick up a keg for our home kegerators. There is already a “picnic” tap with mini nitrogen canisters being produced by Leland for this very purpose.

With only two major markets really working with wine on tap, New York City and San Francisco, and others emerging quickly, Gotham plans on taking what they have done here to other states that have a growing demand for their local and non-local wine on tap. With connections around the globe, they will bring the wines of New York, Chile, Washington, California, France, Germany, Italy and Spain in addition to other city’s local AVA’s wines like they have done in New York.

Even though New York Wine sales are better than ever due to the rise in quality and the “local” movement, it is still the “the new guy on the block” when compared to other historic grape growing regions around the world. The fact that this young region has this unique vehicle and marketing right now to help get the wines into consumer’s hands that may or may not not get there otherwise is huge and can only help to open eyes to NYS wines.

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