Mitigation of the uncertainty associated with the smell of smoke in wine grapes

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The smell of smoke has dominated the concerns of the California wine industry in recent years. With unstable weather conditions and persistent droughts, there is no reason to believe that the smell of smoke will not continue to be a major concern for the foreseeable future.

In 2017 and 2020, California producers and wineries both had to scramble to adapt as they found that science, customs and existing contractual arrangements left them ill-prepared to face the scent challenge. of smoke. Avoiding a similar situation once the smoke smell inevitably returns means understanding the problem and putting a strategy in place to deal with it.

What is the smell of smoke?

Drinking smoked wine has been compared to tasting a campfire or an ashtray: most would agree that these are not desirable attributes of wine. These unpleasant flavors are caused by the volatile phenols that are released by plant matter when it burns.

Volatile phenols bind to the sugars in grapes, producing glycosides. Unlike volatile phenols, glycosides are not volatile, so the smoked quality cannot be smelled or tasted.

The problem of uncertainty

During a typical crushing, the grapes are harvested in the field, delivered to the crushing area of ​​the winery, inspected, accepted if there are no obvious signs of defects, and the fermentation process begins. If the winery buys the grapes from a winemaker, acceptance generally obliges the winery to pay the winemaker, with payment due shortly after harvest, or in installments, the first shortly after harvest and the second a few months later.

However, one of the biggest challenges with smelling smoke is its latency. This is because volatile phenols hibernate: glycosides become volatile as the wine is fermented and aged and the smoke can then be smelled and tasted. It is difficult to predict when this will happen, making it difficult to detect, plan and mitigate the risk of smoke during the usual wine making process.

To compound the uncertainty, there is no universally accepted definition of smoke odor in the industry. Different labs and wineries rely on different levels of different chemical markers. Relying on taste and smell is inherently subjective, painfully obvious in some cases, subtle and difficult for some palates to discern in others.

Contractual approaches

Ultimately, uncertainty breeds trust and relationship issues best resolved in the grape purchase contract. Parties negotiating grape contracts should consider:

  • Identify the smell of smoke using specific chemical markers (perhaps periodically revisited in good faith during the contract as industry knowledge evolves) or using truly neutral subjective assessors
  • Use of tiered pricing based on levels of chemical markers found
  • Incorporate processes that recognize smoke odor latency by delaying acceptance of suspect grapes
  • Allow the treatment of suspicious grapes on behalf of the winegrower
  • Including withholding of part of the purchase price
  • A combination of the above

Don’t neglect insurance

Wine growers and winegrowers should review their insurance policies in detail before and after smoke attacks and consider working closely with a broker or lawyer to determine if, when and how to make a claim.

Understanding how insurance now works with the smell of smoke can help you prepare after you smell smoke. One of the trickiest questions is determining which insurance policy will cover a potential loss. Typically, crop insurance will cover damage to grapes while they are on the vine while other forms of property insurance will cover “damage” to grapes after they are harvested. Growers with healthy growing policies should encourage pre-harvest field inspections to allow for timely claims.

However, because it may not be clear when the grapes were “damaged”, actions taken under one type of policy could affect a claim under a different type of policy. If it is not clear when the grapes were damaged, potential claimants should carefully review their policies and work closely with their consultants, lawyers, and brokers to determine the best approach to take in the event of a potential loss.

Taking the time now to understand your policies before the smell of smoke appears can help make the claims process less stressful and ensure that no important steps are missed. Wine growers and winemakers should review their insurance policies to determine the supporting documents required to file a claim. Some policies, for example, may require information on when grapes were affected, where they were affected and for how long.

Many policies will also require lab tests from pre-approved labs that indicate the presence of smoke odor. At present, pre-harvest testing generally focuses on the presence of guaiacol and 4-methylgaiacol and is performed either on whole berry clusters or after micro-fermentation of samples. While post-fermentation testing can help confirm the presence of smoke odor, many policies will still require the results of pre-harvest testing.

Potential applicants should also research other requirements that could affect the viability of their application. Is there a policy forcing wine growers to separate juice from different lots, and should this be part of the grape contract negotiations?

Careful review of insurance policies and working closely with your consultants, insurance broker, and lawyer can also uncover unexpected sources of payback. For example, if crop insurance is not available or does not fully cover the loss, it might still be possible to obtain coverage for lost profits and additional expenses due to the inability of the producer to harvest. grapes due to lack of access or other reasons, or a winery’s inability to source the grapes needed for wine production.

As always, to maximize insurance recoveries it is necessary to quickly and completely gather all the relevant facts, supporting documents and relevant insurance policies, and understand (with professional help, if necessary) ) how insurance policies might respond to particular losses before deciding how one or more insurance claims should be pursued.

Next steps

Potentially spoiled grapes are bad enough: the inherent uncertainty about the presence, cause, and extent of the smoke smell exacerbates the associated contract and insurance issues.

To reduce this uncertainty: review insurance policies and grape contracts to understand their terms, consider negotiating grape contracts to incorporate practical procedures, and contact your consultants, insurance broker or lawyer with any questions regarding contracts, policies or general treatment strategy. potential smoke damage. Anything you do now can reduce the pressures of the next fire season.

This article was originally published on Farella Braun + Martel’s website.


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