The first budget focuses on the additional expenses incurred by vineyards when practicing cluster thinning and gathering the resulting grapes for making verjus. In the context of this study, it was observed that only a limited number of vineyards in Texas currently implement cluster thinning as part of their production practices. Conversely, it is more prevalent to find vineyards that do not engage in cluster thinning. Consequently, to develop an accurate and valuable budget reflecting the costs associated with harvesting underripe grapes for verjus production, it is crucial to incorporate the expenses related to cluster thinning into the overall budget. By employing the Delphi method to gather insights from industry experts on cluster thinning practices, a hypothetical model budget was created to estimate the cost of harvesting underripe grapes. The costs are calculated using the U.S. dollar.
3.1. Cluster Thinning Estimated Costs
Determining the number of grapes to be removed per acre is the initial activity involved in cluster thinning, which also includes the labor and man hours required for grape removal and their subsequent collection in bins for transportation to the winery. To facilitate estimation, we assumed a grape variety with a high yield, such as Sangiovese or Tannat, as the target for this budget analysis. The estimated tonnage of unripe grapes harvested prior to cluster thinning is derived from the assumption that the vineyard produces 17.3 tons per ha (7 tons per acre). The calculation method involved considering that the average cluster weight per vine after fruit set, during the lag phase, is roughly half the final cluster weight. By doubling the weight of the post-fruit set cluster, the grower can determine the desired percentage to be removed from the final weight. Typically, this falls between 40 and 50%, resulting in a final harvest of approximately 8.6–9.9 tons per ha (3.5–4 tons per acre). Removing 50% of the current cluster weight, at a current yield of 3–4 tons per acre, would yield a harvest of 3.7–4.9 tons of unripe grapes per ha (1.5–2 tons per acre).
The price per ton of grapes for the final grape harvest was determined from the industry panel participants as an average of their normal prices resulting in approximately USD 2600 per ton before cluster thinning was implemented. With cluster thinning implemented, most wineries would increase their price per ton to compensate for the yield losses and possible increase in quality. A post-cluster thinning price increase of 40% was used based on the economic model calculations from Preszler et al. [
40], resulting in a price of USD 3640. The net returns for the vineyard that cluster thins, sells the unripe grapes, and sells their final grape harvest for an increased price will still result in a negative return of USD 1520 per acre and USD 3756 per ha.
The labor costs were estimated at USD 14.41 per hour, based on the average wage rate for Texas farmworkers and laborers in the crop, nursery, and greenhouse industry, as reported by the U.S. Bureau of Labor Statistics in 2022 (occupation code 45-2092). Through industry interviews, it was determined that it takes an average of 17.25 h for one person to cluster thin one acre of a vineyard (42.6 h per ha). Typically, these 17.25 man-hours are divided among 5–6 individuals, resulting in approximately 3.5 h dedicated to cluster thinning per acre (8.65 per ha). During this time, a tractor is used to collect the harvested grapes from the bins, with the tractor driver earning an average hourly wage of USD 15.09 in the state of Texas. Additionally, there is a runner who assists the driver by gathering the bins of grapes from the harvesters and delivering them to the tractor.
The tractor’s estimated costs were for an 85 Hp tractor and referenced from the Department of Agricultural and Consumer Economics University of Illinois 2021 report on “Machine Equipment Costs: Tractors” where the equipment cost considers fuel, labor, and overhead costs [
69].
3.4. Winery’s Estimated Costs for Producing Verjus as an Acidifying Agent
The partial budget analysis for using verjus as an acidifying agent in Texas in place of tartaric acid can be seen in
Table 5. The tartaric acid costs of USD 75.70 are per 3785 L of wine to acidify it 0.25 units. The increase in final wine volume due to the addition of 10% verjus (378 L) results in added revenue. The revenue was calculated as additional bottles of wine (504 bottles, 750 mL each) multiplied by
$13/bottle. The results indicate that even with verjus costing USD 0.30 per liter of wine compared to the USD 0.02 for tartaric acid per liter of wine, there is still a positive net revenue change of USD 5639.40 from the 10% increase in volume of wine available for sale following the verjus addition.
The second budget (
Table 6) focuses on the expenses incurred by the winery in relation to the purchasing of unripe grapes, their pressing, and the utilization of the resulting juice as an acidifying agent in lieu of tartaric acid. The budget table presented in
Table 3 provides a comprehensive breakdown of the various costs associated with the winemaking process, including transportation, labor, and materials. The total costs incurred throughout the process amount to USD 1134.30, which represents the financial investment required to produce a quantity of verjus equivalent to 378.5 L. Two initial tests were conducted over the course of two consecutive harvests (2022 and 2023) using different grape varieties (Muscat Canelli and Blanc Du Bois).
Through these trials, it was determined that an average of 20 mL of verjus per liter of wine was needed to achieve a 0.1 pH unit decrease and that on average 100 mL of verjus per liter of wine were necessary to achieve a 0.25 pH unit decrease. This reduction of 0.25 pH units was identified as the minimum acidification level typically required by most wineries in Texas, as indicated by industry experts. For the purpose of the partial budget analysis, a ratio of 1:10 was adopted, reflecting the amount of verjus needed to acidify the wine by 0.25 units. Additionally, it was observed from previous experiments that approximately 1 ton of unripe grapes yields 378.5 L (approximately 100 gallons) of verjus. Hence, the winery’s budget was based on the processing costs associated with 1 ton of unripe grapes, which would produce the 378.5 L of verjus necessary for achieving the minimum desired acidification.
Transportation logistics for grapes from the vineyard to the winery were assessed using the flat rate shipping price model employed by the primary grape distributor in the Texas High Plains area. This model features an even linehaul rate of USD 1000 for transporting grapes from the High Plains AVA to the Texas Hill Country AVA. Given the prevalence of wineries in the Hill Country AVA and the concentration of vineyards in the High Plains AVA, this transportation distance represents a common and applicable scenario for the majority of Texas wineries. To calculate the transportation costs, the fuel rate for the reefer truck was estimated at USD 264.50, resulting in a total freight bill of USD 1264.50. Each reefer truck has the capacity to hold up to 20 tons (40 bins) of grapes. However, it is common for trucks to operate at only half of their maximum capacity during transportation. Therefore, for the baseline estimate, 10 tons of grapes were considered. Based on this estimation, the cost of transporting 1 ton of grapes from the High Plains AVA to the Hill Country AVA amounts to USD 126.45.
Texas wineries, on average, expressed their willingness to pay USD 800 per ton of unripe grapes, while vineyard managers indicated a preference to sell 1 ton of unripe grapes for a price range of USD 500 to USD 1000. To align with the price range desired by wineries and taking into account the average markup of 40% for a ton of ripe grapes [
70],
$800 can be considered a fair estimate, considering the preferences stated by both parties.
Winery hourly wages were determined using the average weekly wages in wineries, being USD 981 in 2020 from the US Bureau of Labor Statistics and working an average 40-h week, resulting in an average rate of USD 24.52 an hour. The labor involved in running a forklift and transferring the grapes into the winery accounted for 0.66 h and incurred a total cost of USD 16.53. Similarly, the labor required for cleaning the equipment before processing the grapes amounted to 1.5 h and USD 36.78. These tasks are essential for maintaining hygiene and ensuring the quality of the final product. Cleaning materials, such as KMBS (80 g) and citric acid powder (198 g), were utilized during the cleaning process. The costs associated with these materials were USD 1.76 and USD 1.12, respectively. Processing steps, such as running the grapes through a destemmer/crusher and pressing them in a bladder press, required 1 h and 2 h, respectively. Additionally, the analysis of verjus and trialing the verjus addition required 0.5 h of labor, resulting in a cost of USD 12.26. The labor spent cleaning the equipment and storage containers for the verjus is an estimated 2 h, with materials for cleaning totaling USD 2.88. An additional 30 min is needed to complete the acidification process for the wines.
The analysis revealed that the average price for a 50 kg bag of tartaric acid amounted to USD 234. Based on this information, winemakers estimate that it would take approximately 1 g of tartaric acid to acidify 1 L of wine by 0.1 units. Consequently, to achieve an acidification level of 0.25 units, the winemaker would require 2.5 g of tartaric acid. The total cost incurred to acidify 1 L of wine using tartaric acid amounted to
$0.02. In contrast, the cost to acidify 1 L of wine using verjus was calculated to be USD 0.30 cents per liter. However, it is important to note that the budget also accounted for the potential impact on sales, considering the possibility of a 10% increase in wine sales due to the larger volume resulting from the addition of the 1:10 ratio of verjus to acidify the wine by 0.25 units. The average price for a bottle of wine was determined to be USD 13.29 in the state of Texas [
71]. The verjus additions to the wine would equal an additional 504 (750 mL bottles) of wine to be sold.
The following budget analysis focused on determining the breakeven price required to produce a 750 mL bottle of verjus for commercial sale in Texas, excluding its use as an acidifying agent (see
Table 7). A comparison with the budget for creating an acidifying agent replacement shows that the main variations lie in the additional labor, materials, and equipment necessary for bottling the wine, while subtracting the labor requirements for acidifying the wine. Distribution costs were taken into consideration since it is likely that the winery will need to distribute the bottles for commercial purposes.
The mobile bottling line costs were estimated to be USD 0.25 per bottle and did not account for the set-up fee which typically costs USD 1500 because the verjus is likely being bottled at the same time as the winery’s other wine products. The materials for the bottling were averaged from the typical bottling materials Texas wineries purchase for their main products. A Bordeaux style bottle that is 750 mL averaged USD 0.82 per bottle, agglomerate corks averaged USD 0.41 per cork, and the labels averaged USD 0.51 per label.
Distribution costs were determined from the average linehaul rate from DAT Freight and Analytics for reefers at USD 2.50 per mile in the Texas region. The fuel surcharge was determined using the Pacific Union surcharge estimator with USD 0.29 per mile added onto the linehaul rate. This was used to estimate a 500-mile trip.
The mobile bottling line costs were estimated to be USD 0.25 per bottle and did not account for the set-up fee which typically costs USD 1500 because the verjus is likely being bottled at the same time as the winery’s other wine products. The materials for the bottling were averaged from the typical bottling materials Texas wineries purchase for their main products. A Bordeaux style bottle that is 750 mL averaged USD 0.82 per bottle, agglomerate corks averaged USD 0.41 per cork, and the labels averaged USD 0.51 per label.
The breakeven price for a bottle of verjus produced using a mobile bottling line and distributing a distance up to 500 miles was $6.98 and based on the price per bottle of verjus that has previously been sold in Texas equaling $12 per bottle, the potential profit from bottled verjus was significant.
Distribution costs were highly variable depending on truck type, distance, and demand in the area (see
Table 8). Van freight rates were the lowest at USD 2.08 per mile, while reefer freight rates averaged USD 2.50 per mile. Since demand for trucking fluctuates so much, it can be hard to quantify just how much more the linehaul rate would increase in an area with low availability of trucks, but for each reefer truck total, a 30% increase in price was used to determine the cost of distribution with low availability. The fuel surcharge rate according to Union Pacific was USD 0.29 per mile for the average price of diesel fuel of USD 3.50 in Texas.
The manual bottling line partial budget estimated that it would take seven people 3 h to produce 42 cases of verjus (504 bottles). With the baseline winery wage rate of USD 24.52, it costs USD 514.92 in labor to produce 504 bottles of verjus.
Table 9 and
Table 10 show the sensitivity analysis of using a mobile bottling line and a manual bottling line with various wage rates and a range of prices for one ton of unripe grapes. The results indicate that the mobile bottling line is less sensitive to an increase in the wage rate.
The variance among the total costs the winery incurred from using a manual versus a mobile bottling line are displayed in
Table 11. Without taking into consideration the mobile bottling line set up fee, the manual bottling line was more sensitive to wage rate increases.
Lastly, if a winery is an estate winery where they do not have to pay transportation costs, the profit margins for producing verjus are much larger costing only USD 0.17 to acidify 1 L of wine by 0.25 pH units (see
Table 12).