DIY Wine Economics

I’ve just returned from a research trip to Canada to investigate the wine industry in British Columbia (watch for my upcoming report). The wines were very good and the scenery spectacular, but for some reason my attention kept being diverted to small storefront do-it-yourself wine making facilities.  So herewith a report on a Canadian phenomenon:  Wine Kitz stores.

The Old Pandosy Street Connection

Somehow we found ourselves on Pandosy Street in Kelowna, B.C.; I checked out the Wine Kitz store while Sue investigated a yarn shop on the next block. It was a very interesting visit. I have seen many stores that sell wine-making kits and supplies, including grape juice concentrate, yeasts, jugs, hoses, bottles and so forth, but this Wine Kitz was something else — it really got my attention.

Kim McLean and her husband James operate this shop, which has been in Kim’s family since 1976, first an an independent DIY wine operation, now as part of  Wine Kitz.  Wine Kitz is a franchise chain, started in 1959 as “Wine Art” with 70 stores across Canada. There were three stores in Kelowna, a wine, tourism and agriculture town of about 120,000 population, with another store just across the bridge in West Kelowna. There must be a lot of DIY wine on tap here to support four stores!

Wine in a Box

Wine may be made in the vineyard, as they say, but it comes in a box at Wine Kitz and similar stores. Each box makes 23 liters of wine, or about 30 bottles from whichever sort of wine grape juice you choose. There are three quality tiers of juice available, starting with the Wine-Art line (CND 120 per kit) and moving up to Tradition (CND 138) and Ultimate (CND 185). (One USD equals about 1.03 CND at today’s exchange rate — that’s roughly par when you take FX fees into consideration.) The cheaper products have a higher percentage of juice concentrate while the more expensive tiers have more natural juice (and less manipulation). You can dial up the quality level depending upon your preferences and bank account balance.

The juice comes mainly from California, Australia and Italy. The juice selection is really quite broad. Merlot, Chardonnay and Shiraz, of course, but also Barolo, Chianti and Valpolicella. You can even make sherry and port-style products as well as various dessert wines.

The Secret of DIY Success

Why are kit wines so popular in Canada? One reason is the high retail price of bottled wine. Wine that you can make in a Wine Kitz shop for about CND 6 per bottle would sell for perhaps CND 20 or more in one of the province’s government liquor shops, Kim told me.

Checking around I found that Chateau Ste Michelle Columbia Valley Riesling sells for CND 14 in BC and CND 17 in Alberta. You can buy it for less than USD 6 at Costco in the U.S.  That’s a pretty strong incentive to make your own wine if the quality is anywhere close. You can, of course, set up your own home winery using the packaged juice as raw material to bring the cost even lower.

The ongoing recession is a second factor, Kim said. People are a bit more interested in saving money when the economy is uncertain. You can think of this as a trading down (to lower prices) effect, but I’d argue that it is more like “trading over” (to different wine experiences) since the product is both cheaper but also a bit more personal and fun.

A final reason is that it is easy to make this wine — much easier that you might think. A loophole in liquor laws allows Wine Kitz to streamline the winemaking process.

Amateur Antinoris  need invest only about 45 minutes per batch of wine — 20 minutes to initiate fermentation and another 25 minutes filtering and filling bottles when the wine is ready to go in a few weeks. All the work in between can be done by Wine Kitz staff on their premises using their equipment. You can be as involved as you want to be as long as you put in that minimum 45 minutes but you can also leave it to Wine Kitz. Honestly, you can’t get much easier than that.

One important rule: once you bottle your wine you must remove it from the store immediately. I asked Kim if her operation was highly regulated and she said it was — and that the easiest thing to do was simply to follow all the rules to the letter and avoid legal problems. Sounds like a good plan to me.

Back Room Confidential

The back room of the Kelowna store I visited was filled with glass carboys in various stages of fermentation and a satisfied young couple (from Switzerland if my ear is any guide) were happily bottling their latest vintage. Perhaps Canada’s longstanding policy of welcoming immigrants is another factor in DIY wine’s popularity — maybe they bring an interest in home wine making with them. But that’s obviously not the whole story. When I asked Kim about her customers she said they are just thirsty — they don’t come from a particular socioeconomic class or walk of life. They just want to make wine.  Interesting — wine-making as a popular home craft like scrap-booking.

I didn’t ask to sample any of the wine — this isn’t a wine rating blog and my opinion wouldn’t matter anyway. What does matter is what the people who come to stores like Wine Kitz think and there are apparently many happy wine drinkers among them (enough to keep four stores busy in a medium-sized town).

DIY wine is an interesting reaction to both the expense of commercial wines (especially in Canada) and the desire of many to be more a part of the products they consume (even if boxed juice is involved) — to be participants as well as consumers.

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Thanks to Kim McLean for taking time to show me around her Kelowna store and explain her DIY operation. The photos shown here are for typical Wine Kitz locations — not the Kelowna store I visited. Watch for additional reports form my BC fieldwork expedition.

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